KFin Technolog. (KFINTECH)

FairStock Score: 50/100 — MIXED

Score breakdown: P/E: 0/3 · ROCE: 2/2 · Growth: 1/2 · Dividend: 0/1

Key Financials

Strengths

• Return on equity of 24.69% and ROCE of 32.75% show exceptional capital efficiency.
• Near-zero debt at D/E of 0.03, with Piotroski F-score 8/9 and Altman Z-score 8.14 indicating strong financial health.
• Consistent revenue growth: 5-year CAGR of 17.80% and latest sales growth of 18.25%.
• Latest quarter sales of ₹371 Cr and net profit of ₹92 Cr demonstrate profitable scale.

Concerns

• Valuation is very expensive: P/E 46.70 and P/B 12.02 versus Graham Number ₹193.79 and DCF value ₹74.33; no margin of safety at ₹981.30.
• Profit growth of 6.94% trails sales growth of 18.25%, showing weaker conversion of revenue into profits.
• Free cash flow of ₹77 Cr is low relative to market cap of ₹16,503 Cr; dividend yield is only 0.78%.
• Promoter holding of 22.87% is low-ish for an Indian financial intermediary and needs monitoring.

AI Analysis

KFin Technologies is the kind of company that makes a value investor stop and admire the business before running from the price. The operating record is strong: return on equity is 24.69%, return on capital employed is 32.75%, and debt-to-equity is just 0.03. A Piotroski F-score of 8/9 and Altman Z-score of 8.14 point to a financially sound institution. Revenue has compounded at a five-year CAGR of 17.80%, and latest sales growth is 18.25%. That persistence, with high returns on capital, tells me KFin has a real franchise and likely a moat in a niche intermediary business. But Benjamin Graham taught me that a great business at the wrong price can be a poor investment. At ₹981.30, the market cap is ₹16,503 Cr. I am paying 46.70 times earnings, 12.02 times book, while book value is only ₹81.61. Graham Number is ₹193.79, and the DCF value shown is ₹74.33. That is no margin of safety; in fact, the margin is deeply negative. Profit growth is also lagging revenue at 6.94%, and free cash flow of ₹77 Cr is tiny compared to the valuation. Dividend yield of 0.78% does not compensate. This is a steady, high-quality compounder — FairStock's 57/100 'Steady' label is apt. But at this price, I would be investing in hope, not arithmetic. I would wait for a much lower price or a long period of growth to catch up. Patience is the better trade.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer