We are well positioned to create value added solutions for our clients: Sreekanth Nadella, KFin

So your margins as well have been rising second straight quarter on the trot, is that because of your value added services and where do you see margins headed?
Most certainly, our margins in terms of PAT stands at about 25 plus percent for the nine months ending 31st December. The margin expansion is largely contributed both by EBITDA growth as well as retirement of debt in the previous financial year, both of which obviously will continue to contribute to expanded margin profile into the coming quarters.

Your overall market share in terms of your AUMs has increased by 100 basis points, but the equity AUM has been flat at 35%. What is the market share growth guidance for the coming quarters?
Equity AUM overall market share of KFin Tech is about 35%. Getting to 40% will definitely take some time. KFin’s contribution of equity AUM to the total share of AUM continues to be an impressive 56% of the total book that we manage at this point in time. In terms of the growth, KFin Tech has a 42% plus market share which I would like to believe that over a period of time will contribute to the expanded market share which will get us close to 40%.

Your company also enjoys a 40% market share when it comes to SIPs, and they are clearly at record high levels right now. How well positioned are you when it comes to the mutual fund industry and what synergies is the company expecting to reap in in the coming three to five years from mutual funds?
See, SIP is definitely going to be the bellwether for the growth of this industry, that is the sticky book, that is a retail participation, that is something that has caught the fascination of the Indian investors. We are extremely bullish in terms of the SIP growth that will continue to happen, even as the market is expanding beyond T30 and even B30 for that matter. So, we are very well positioned in terms of both creating value added solutions for our clients, crunching the time that is required to register a mandate as well as providing exemplary services both to the investors and to the distributors.

So, the continued expansion of both folios as well as the ticket size in SIP augurs very well for the industry. We continue to be extremely bullish about the Indian asset management company as a business portfolio, even as the penetration levels both at a number of investors as well as as a percentage of the GDP to the country continues a lot left for desired in terms of growth.

What are your expansion plans in the non-Indian markets and what kind of revenue potential can we see, particularly for the Southeast Asian markets?
Our plan to diversify has started almost six years back when our share of revenue for non-domestic mutual funds was in single digit. Today, it has touched over 35-36% and that is contributed by a series of solutions including international business. We have won our first client in Canada. We have expanded the number of clients from 22 to 33 for the quarter ending December 2023. There continues to be a significant total addressable market in Southeast Asia, a little over a trillion dollars worth of assets.

The conversion could take a little longer than what it would be in Indian markets. But over a three- to five-year period, we are extremely optimistic in terms of the market share gains that we have. We continue to be the single largest third-party fund administrator in that part of the world.