KFin Technologies reported strong results for Q3 FY’26, marked by the successful integration of Ascent. Revenue grew to INR323 crores (standalone) and INR954 crores (including Ascent) for the 9 months ending December 31, 2025. EBITDA margins remained healthy, and the company is focused on diversification, with domestic mutual funds revenue dropping to 59.8% of the total. Management emphasized leveraging technology, including AI, for future growth and efficiency.
Q3 FY’26 Financial Overview and Ascent Impact
KFin Technologies held its Earnings Conference Call on February 16, 2026, discussing standalone and consolidated results for the quarter and nine months ended December 31, 2025. CFO Vivek Mathur highlighted the successful integration of Ascent, which provided a significant boost to top-line growth.
- Quarterly Revenue from operations reached INR323 crores, marking 11.4% YoY growth (standalone) and 4.5% sequential growth.
- Including Ascent, the quarterly top line saw robust growth of 27.9% YoY and 19.9% sequentially.
- For the 9 months ending December 2025, revenue was INR906 crores (without Ascent) and INR954 crores (including Ascent), representing 18% YoY growth including Ascent.
- EBITDA, including Ascent, stood at INR151.6 crores for the quarter, with 9-month EBITDA at INR401 crores.
- EBITDA margin, including Ascent, was 40.9% for the quarter, slightly dipping by 300 bps due to integration costs (including INR2.8 crores in amortization).
- Core PAT showed YoY growth of 11.8% without Ascent for the 9 months.
Business Mix Diversification and Market Share
Management emphasized the strategic shift towards reducing overreliance on a single asset class and geography, a vision to move asset classes under 50% dependency within the next couple of years.
- Domestic mutual fund revenue now contributes 59.8% of total revenue, down from about 71% in Q3 FY’25.
- International Investor Solutions now accounts for 16.7%, up from around 4% previously, primarily due to Ascent.
- Issuer Solutions remains steady at 13% of revenue.
- KFintech’s overall market share of AAUM rose from 30% in 2020 to 32.7%.
- The company now services about 10,000 corporates in the issuer solutions business, having touched 100 corporates organically in its GFS (Global Fund Services) business.
- Overall clientele across KFintech and Ascent stands at about 428, managing AUM of about $41 billion, up from $10 billion last quarter.
Performance in Specialized Verticals
MD & CEO Sreekanth Nadella provided updates on key growth areas outside core mutual funds:
- National Pension System (NPS): The business has broken even and achieved a healthy 30% EBITDA margin, growing at 35% during the quarter, three times the industry pace.
- Alternate Investment Funds (AIF) and Wealth: Market share increased to 39%, with AUM nearing INR2 trillion.
- International Expansion (Ascent): Ascent is present in 18 countries. Management is consolidating international operations into a new subsidiary in GIFT City, leveraging tax benefits and creating a large GCC.
Technology and Future Strategy (AI Focus)
The management team stressed a proactive approach to technology, focusing on self-disruption through AI implementation.
Sreekanth Nadella noted the completion of two AI-native platforms in the issuer solutions space (bond market and Investor Relations) expected to launch soon, reducing delivery cycle times by 45% to 50%. The ongoing replatforming of the core MF business is proceeding at a sharp pace, enabling response times in milliseconds.
Regarding competition, management expressed confidence that AI alone will not erode their moat, as success depends heavily on the combination of technology and deep domain expertise.
Q&A Insights on Margins and Yields
In response to analyst queries, management addressed margin sustainability and yield trends:
- Employee Expenses: Payroll costs are stabilizing as the organization shifts from manual, bottom-of-pyramid roles to senior, technical staff driving automation. Non-payroll costs are expected to expand to offset potential payroll cost reductions.
- Yield Contraction: The reported yield contraction was described as marginal this quarter, mainly due to an asset mix shift towards Gold and Silver ETFs. Management expects yields to stabilize or improve as the base effect from initial contract discounts ends by Q4.
- Ascent Margin Trajectory: It is a 3-year plan for Ascent to achieve KFintech’s margin profile. The primary driver for margin expansion will be scale, absorbing fixed overheads, followed by non-payroll cost optimization synergies identified over the past 6 weeks.
Closing Remarks
Vivek Mathur concluded the call, reiterating confidence that year-on-year revenue growth, including Ascent, will remain within the guided range of 15% to 20%, with EBITDA margins maintained between 40% to 45%.
Source: BSE
