Shares of this small-cap stock jumped 11 percent on Friday after a well-known Investment Bank initiated coverage of the company.
With a market capitalization of Rs 7,267.77 crores, the stocks of KFin Technologies Limited closed at Rs 427.65 on Friday gaining 11 percent compared to the previous closing levels of Rs 384.80 apiece. Moreover, the stock hit its 52-week high mark today at a price of Rs 439.90.
Such movements in the stock prices were observed after ‘Jefferies’, an Investment Bank based in America, initiated coverage of the company’s stock.
The entity, having a positive outlook for the company, gave a ‘Buy’ call with a target price of Rs 500. As compared to the current prices prevailing in the market, the given price indicates a potential upside of approximately 17 percent.
The rationale behind providing such a recommendation pertains to the aggressive international expansion, net growth avenues, 30 percent CAGR in relation to revenues, etc.
During the recent quarter period, the company has seen a marginal dip in financial numbers such as operating revenues and after-tax profits. The operating revenues took a shift down from Rs 183 crores during Q4FY22-23 to Rs 181 crores during Q1FY23-24, and, the latter moved down from Rs 57 crores to Rs 43 crores keeping the timeframe the same.
In addition to the above, the company reported healthy profitability metrics with the return on equity (RoE) reported at 22.49 percent and the return on capital employed (RoCE) reported at 26.39 percent. The debt-to-equity ratio of the company stands way below the desired levels reported at 0.15 times.
As per the shareholding pattern data available for the quarter ended June 2023, the company’s Promoters hold a 49.22 percent stake, and the Foreign Institutional Investors (FIIs) hold a 8.08 percent stake in the company.
KFin Technologies Limited is a financial services platform providing a wide range of services to corporate issuers and asset managers in India. The company also provides investor solutions that include transaction origination and processing for Mutual Funds and private retirement schemes in Hong Kong, Malaysia, and the Philippines.
Written by Amit Madnani
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