Kfin Technologies Limited (NSE: KFINTECH) Q3 2026 Earnings Call dated Feb. 16, 2026
Corporate Participants:
Vivek Narayan Mathur — Chief Financial Officer
Venkata Satya Naga Sreekanth Nadella — Managing Director and Chief Executive Officer
Analysts:
Unidentified Participant
Devesh Agarwal — Analyst
Karthik Chellappa — Analyst
Mohit Mangal — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to KFIN Technology 3Q FY26 Earnings Call hosted by IASL Capital Services Ltd. As a reminder, all participant lines will be in the listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touch tone. Please note that this conference is being recorded. I now hand the conference over. Tamisha Devesh Agarwal from IIFL Capital Services Ltd. Thank you. And over to you sir.
Devesh Agarwal — Analyst
Thank you. Good morning everyone and welcome to the 3QFY26 earnings call of Kpint Technologies Limited. Today from the company we have with us Shikant Nadella, M.D. cEO Vivek Mathur, CFO and Amit Murarka, CFO, international business and head investor relation in MNA. I would now hand over the call to Vivek for his opening remarks. Thereafter Srikanth will share the key developments in the quarter and after that we’ll open the floor for Q and A session. Thank you. And over to you, Vivek.
Vivek Narayan Mathur — Chief Financial Officer
Thank you, Devesh. Good morning everyone. This is Vivek Maxar, CFO for KFIN Technologies Limited. This time I’m starting with the good news of successful integration of Ascent with K Fintech. And you would have seen the results. And I’ll give you some color on the financials. And then after that I’ll hand over to Srikanth for the business commentary. The overall performance for the quarter has, you know, the revenue from operations which have grown to 323 crores which is 11.4% growth for the same quarter versus last year same quarter and a sequential growth of 4.5% quarter on quarter for the nine months.
This is without Ascent. If you look at including Ascent, our top line growth has been very robust for the quarter. It’s 27.9% year on year for the same quarter and 19.9% sequentially quarter on quarter. So you can see the impact of Ascent stop line coming in where the growth has been, you know, sequentially without Ascend 4.5% and with Ascend 19.9% for the nine months ended 12-31-2025 the revenue was 906 crores which is a 12.2% growth. Year on year without Ascent and 954 crores including Ascent, which is an 18% growth year on year. The EBITDA has also gone up 14.6% year on year and stands at 149.5 crores without ascent and 151.6 crores with ascent.
And you know, the growth year on year including Ascend was 16.1% and sequentially 11.7% for the quarter. If you look at nine months including Ascent, we are at, you know, 12 and a half percent growth for the nine months in terms of the EBITDA at 401 crores. So EBITDA margins have also been, you know, well within our guidance in terms of including ascent, it is 40.9% for the quarter, which is a, you know, a dip from the last quarter. For the nine months at 300bps because of the, you know, the integration that we have done.
There are charges related to purchase price allocation in terms of client contracts, amortization and brand amortization of about 2.8 crores for this quarter, which is the impact and quarter on quarter you will see an impact of 3.3 crores in terms of amortization in case in Singapore because of the Ascent acquisition. So but we’ll continue to remain range bound. The EBITDA margin for the quarter without ascent was 46.3% and for the nine months ended FY26 at 44% without ascent and 42% with ascent. You know, it is, you know, overall resulting in COPAT going up sequentially by 8% and year on year by 11.8% without ascent.
And with Ascent, the growth in codepat court pat means without the impact of the one time hitoff labor code, which is about 8.6 crores. And therefore the code pack means without the one time impact of labor code. So for the nine months ended December 25th, the year on year growth, including Ascent for the core pack for the quarter was 9.1% sequentially 5.4% growth and for the year 268.9 crores. It’s an 8.6% growth year on year. Our pat margins at the end of Q3, including Essence are at 28.2% for the quarter, including Ascent at 26.5%. Ascent for the quarter is 31.2% and for the nine months it’s 29.9% which is well within the range that we have been giving the guidance for.
We are having cash and cash equivalents of 487 crores without ascent and with ascent 507 crores and the diluted EPS is at 5.30 with ascent and 5.44 without ascent for the quarter and annualized nine months is 15.13 which is a growth of 5.5% including ascent. It will be interesting to note the mix of the revenue change that has happened. The domestic mutual fund revenue for the quarter now contributes 59.8% of total revenue. International investor solutions is now 16.7%. So domestic mutual fund used to be in Q3FY25 about 71% which has come down to about 60% now because of the acquisition of Ascent.
And the International Investor Solutions which used to be around 4% is now in the range of about 16.7%. In Q3 FY26 issuer solutions continues to be in the range of 13%, alternates about 5 and a half percent, NPS and other services around 1% each and GBS which is a business which we are winding up is becoming negligible over a period of time. So our objective has been to move towards diversification and it’s a true reflection of how the future quarters are going to look like this time. We integrated ascent effective 13 October 2025. So you will see the impact of Ascent on a going forward basis on similar lines as a result of the change in the ETF from Metals you would have seen that the domestic mutual fund yield has slightly come down by about 2.6% and that is something which we believe is a phenomena where there is lot of participation from the investor community in terms of metals, ETF metals and there is almost a 200 basis point shift in terms of our AUM mix towards passives and that has come down a little bit on equity and debt respectively.
That’s more to do with the market commentary that Shrikant will cover. But this is what I wanted to talk about in terms of financial performance including Ascent and without Ascent to start with. Over to you Srikanth for the business performance and the developments.
Venkata Satya Naga Sreekanth Nadella — Managing Director and Chief Executive Officer
Thank you so much Vivek. Very good morning and a warm welcome to one and all. We felt it was a good way to segue into the business performance unlike typically with the business commentary then falling into accounting given there are, you know, there is an acquisition, there is a consolidation and then everyone’s came to hear in terms of wither and without in terms of the progress and fraction of the organization. I wanted to make sure that we level set and baseline the numbers. Now that you know we are reasonably familiar with the numbers and of course we’d be happy to take more questions around that.
By and large, you know satisfied with the the quarter performance. There are controllables and there are non controllables. I think as a management and as a board of the organization over the past X number of years we’ve been championing the cause of driving more and more attention to the controllable items beyond the vagaries of the market in order to de risk the organization from over concentration in order to de risk our investors in terms of predictability or lack of it. Given the uncertainties both on macros as well as micro crores in terms of the financials, I guess the headline statement is the fact that the mutual funds domestically for us today contribute to about 60%.
Now that includes 6% of revenue which is non related to market which is basically the value added solutions and technology driven outcomes we deliver to various clientele. If we take that aside, pure market driven revenue now is down well below 55%. And it is our intent and the stated commitment that we want as we grow other businesses much faster would be able to reduce reliance on one asset class and one geography under 50% into the next couple of years. That said, our continued focus to win mandates in mutual funds and deliver exceedingly strong values for our clients to grow faster continues to be steadfast.
If I were to draw some metrics to your attention, we won two out of the two new launches that have happened in the mutual funds in terms of mandates. We won prestigious mandate of Nuama and Monarch and of course as we move forward the entities will become operational and I’m sure we’ll be able to continue to add a lot of value to our clients. The overall market share of AIUM for K FinTech continues to rise from about 30% in 2020 to now 32.7%. So there’s market share gains even if there is a marginal dip in the equity side of sure, everyone’s respectful of the fact that that is the predisposition of the clients rather than fintech in terms of where they see more focus, more traction and more growth to come.
There were times when we had a lot more equity exposure. Now over the past couple of months also there’s been strong traction on ETFs especially driven by the gold and silver and that has given a marginal decline in the yield and correspondingly the share of equity into the overall aaum. Outside of that, in terms of the overall win rate, it’s about 60%. We won 23 out of the last 38 mutual fund houses that have launched in our country. The market share in SIP continues to be strong, a little over 37% which I always believe will be the critical determinant factor in terms of where I expect the overall market share to move towards.
As this is the sticky retail book and it tends to propel the overall AUM into that direction over a period of time. Moving away from mutual funds issuer solutions. Once and also ran business, we’ve been calling out the importance of adding significant value in this direction to transformation as well as significantly elevated sales performance including orchestrating several transitions into the industry. Happy to inform you that our current market share in terms of and of course this is as measured by the market cap of the companies we manage on the nifty 500 now is about 50%. It’s about 51.4% to be precise. We at this point in time, you know, while at the state, while at the time of release of the numbers, you know, we’re about 9,877 corporates.
Happy to inform you that we just touched 10,000 corporates on the issue of solutions. Of course about 9,000 plus are unlisted and we hope they become listed at some point in time. But the balance in the IPO market in the previous three quarters definitely has helped. Despite the fact that the retail participation in the market had been tepid, many retail investors did move out of the secondary market which obviously will have a bearing on our financials. But in spite and despite of that, we clocked a very strong 22% plus year on year growth in the issue of solutions.
The overall folios that we manage today puts us head and shoulder above biggest of the RTA’s in the world. We manage roughly over 35 crore folios at this moment in time. This is just India. And as the acquisition of Ascent and as we drive forward international expansion, I’m very confident that we will be in the top three into the next five years in terms of the total quantum of investors, volume of transactions as we handle and I’m pretty sure the revenues would follow soon after that. Now, these two being our traditional businesses, it had been truly our intent to orchestrate several new lines of businesses.
One, to de risk the overall business from concentration. Two, to capitalize on the momentum of various different asset classes, various different business services and various different geographies. All three of them, all three vectors if I may. With an intent to drive faster growth and continue to create modes. All with the singular intent to become the first large global fund administrator based out of India. What has that done? The acquisition that Vivek had spoken about adds about 328 additional clients in the form of Ascent. And also very happy to inform you that this seems to be a milestone quarter for US.
Have touched 100 corporates in our own GFS business which is KFIN’s organic international expansion. We’ve added seven new logos into the last quarter which gets the number to about 100, 328 being SN clients, getting the overall client into about 428. Managing an overall AUM of now about $41 billion up from $10 billion till about a quarter back largely on account of the acquisition. We continue to look at the Asian markets and the mark to market gains have been less than tipit. And one area where India had performed exceedingly well over the past three four years in the form of mark to market gains probably is also seeing sideways movement in the last 18 months.
But I’m pretty hopeful into the coming quarters the Southeast Asian countries mark to market gains would be high thereby contributing to faster growth of our international business in the form of AUM driven revenue. Otherwise much of the revenue growth had been on account of winning several new mandates literally every single month. What had been probably the standout business performance for us albeit on a very small scale use national pension system. Very happy to inform you that not only have we broken even onto this business we have clogged a very healthy close to 30% EBITDA margin.
We have also continued to grow three times the pace of the industry. The industry grew at about roughly 12%. We grew about 35% in the quarter that has just concluded having hit yet another milestone of 2 million subscribers. Thereby adding a revenue expansion and a margin expansion which we believe will continue to be accretive as the scale of NPS will see an organic and an extremely resilient growth given an extremely low churn in this portfolio. Alternate investment funds and the wealth the other lines of business and continues to expand rather fast. We were at about 36% plus market share into the previous quarter.
We have enhanced that to about 39% totally in terms of the alternate investment funds clocking an Overall AUM about 1.8 trillion as we speak today we are inching close to 2 trillion AUM being managed by us. Mindful of the fact that unlike in the case of mutual funds here a decent part of this AUM covers both transfer agency and fund accounting. So it’s a full stack. So we are much like global fund administrators how they provide for the rest of the world. And we believe that it is extremely important for us to cover nearly all business services that are required for a fund manager so as to deliver to our coveted goal of being an XAAS provider, which is everything as a service, which we created with a very simple notion that a fund manager should do what he or she does best, which is deliver returns to their investors.
If that being the North Star of any fund manager, then we believe that it is the duty of administrators such as us to be able to take the headache away in terms of technology, in terms of compliance, in terms of operations, sales, marketing, what have you, allowing them to deliver superior returns to their clients in terms of the overall performance. I want to just take probably a minute or two in terms of the Ascent demographics itself. As we all know, it’s an entity that is present in about 18 different countries. About nine of them have been reasonably newly orchestrated, which effectively means that they are yet to and will be firing in a relatively short period of time in terms of their own growth vector.
Otherwise. Currently much of the revenue comes from five different geographies, Singapore being the largest, followed by Cayman, Middle East, Hong Kong and that part of the region. And as we have now opened offshore locations in the us, in UK and many countries into the Asian side of it, including Taiwan and Japan, etc. We expect through SGN Day and Piton street will be able to unlock value into each of these geographies, even as we have rather key focus in continuing to consolidate our current positioning in our growth geographies and grow at a much faster clip. And of course the entity had grown about 30% year on year with the potential to grow much faster.
It had been pretty busy couple of months for us in terms of integration with Ascent, both at finance and accounting level. It’s been a phenomenal job by our F and A and M and A teams to be able to integrate an entity whose calendar year does not align with U.S. currencies Do not align with U.S. accounting policies do not necessarily align with that of India’s. Now that that’s done, we have simultaneously worked on levers one to drive a higher clip of revenue in the form of up, upsell, cross sell. There are close to 60 different products that we have identified in Kfin Technologies that we’ve created which have global relevance, which is something that I would expect Ascent to be able to leverage in terms of their faster growth elsewhere.
Similarly, many of these geographies are very large. Mutual fund markets as we all know us, for example, is spectacularly large in terms of mutual funds, we are identifying how to push the head start in terms of initiating our services in much of the other parts of the world beyond where we currently are present. And as we all know, today Mutual K Fintech offers similar solutions in Malaysia, Philippines, Hong Kong, Singapore and Thailand. And clearly there are 13 more geographies that we believe we can take things forward to. It had also been a very interesting quarter in the form of us opening a very large account in pensions in Southeast Asia, which also has a great relevance in Australia and into the Middle east, having won a large contract in the previous quarter about which we have announced already.
But then we are into the midst of delivering and we believe that there is a strong potential for driving pensions. In addition to the core asset management solutions for mutual funds and alternatives per se. In terms of cost management, we have laser sharp focus to be able to drive productivity, but in extremely scientific manner. We never take a knee jerk reaction in the form of looking at the market correction, so on and so forth. It had always been our focus that even, and especially during the tough times, you know, investing, you know, front loading investments to drive value, to capitalize when the market’s on up had been our mantra and we’ll continue to do so.
None of these conversations in today’s world can be concluded without the strategy around artificial intelligence. Much like any other sector, we believe that our industry too is ripe for disruption for AI, and as we always believed, it is not for somebody else to come and disrupt us, it is for us to disrupt our own selves. And hence our comprehensive strategy on AI. It cuts across both the generative side of AI as well as on the agentic side of AI, has started to yield, you know, a certain level of comfort in terms of deploying IT organization scale at enterprise scale.
It should be very important for all of us to note that a lot of it is still to be tested at enterprise scale, even if it has a lot of relevance in B2C space. We have however, gone ahead and already created two platforms, platforms which are AI native and both of them are interested in the space of issuer solutions, One in the space of bond market and one in the space of invest relations. Both of them are about to be launched into the coming weeks. Very, very excited in terms of how we could do it.
But the cement substances, we managed to deliver them by reducing the cycle time of the delivery by about 45 to 50% thereabout. And typically some of these platforms would have taken anywhere between five to six months. We managed to deliver them in about Three, the Gen AI part of it is already live in some of our hyperscale analytics platforms that we have given to the industry as well as to many of our clients. And we believe that we continue to deliver many such solutions for our corporates. The big thing of course is the replatforming of our core MF itself, as we all know, which has been built over the past three, three and a half decades, is going into sharp pace.
We have gone live with some of the biggest business processes modules into the previous quarter, which gives us a great deal of comfort as we start driving the migration of existing clientele and delivering value at scale and at speeds that the industry had not seen today. Much of our technological infrastructure, resilience and speed. Now we no longer speak in seconds, we speak in milliseconds. In terms of responses to our digital ecosystem, there is still many a mile to walk in this direction, of course, but that said, I think it’s been a very good quarter in terms of not just tech adoption, but pioneering some of even the untested technologies, if I may.
Some of which we can’t just speak yet about, but we will in due course of time. So broadly that’s been a quarter for us. Very excited to look into the last quarter of this year. We continue to see a mix of headwinds and tailwinds, headwinds largely in the form of of course, market, market performance and continued outperformance of passives over active, so on and so forth. But you know, the controllable parts of it, which is effectively new growth geographies, new growth, business processes, new growth, you know, asset mixes, you know, we believe will continue to provide a huge hedge, including hopefully some amount of currency hedge as well.
So that’s broadly, you know, the update at my end. So we continue to drive growth forward, keeping a very sharp focus on risk management and cost management at it. Thank you, we’re happy to take questions now.
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Kartik Chalappa from Indus Capital Advisors. Please go ahead.
Karthik Chellappa — Analyst
Yeah, thank you very much for the opportunity. Hope I’m audible. I have two questions. The first question is in this quarter, if I were to look at our Issuer solutions we have seen a sharp margin expansion and if I just look at the incremental EBIT on incremental revenue, that also looks pretty high. So just curious to see whether there were any non recurring items in this and what drove the strength in this particular segment this quarter. That’s my first question.
Venkata Satya Naga Sreekanth Nadella — Managing Director and Chief Executive Officer
Thank you Karthik and as always a pleasure to be talking to you. So there is no one time item and extraordinary item in fact, we are ruined the opportunity of not having such events. Some of those were to have rectified in terms of mergers, demergers and rights issues, et cetera. It had been a reasonably quiet nine months in corporate India, so hopefully we’ll have better quarters ahead of us where we get one time. But this particular quarter’s growth on issuer solutions, Karthik, is just purely organic growth which is one a compounding of several. IPOs that we have done into the. Past year as well as into this year which drove our annuity revenue. And Q3 traditionally, as you know, is always bigger quarter into the issue of solutions in the form of corporate actions Q2 and Q3 Q3 more pronouncedly, you. Know, into the December quarter. So in fact we can already see, you know, reduction of corporate activity into this quarter in the issue of solutions. So that’s broadly it. I think even in terms of the portfolio fee is a combination of two factors. I guess winning several such deals and transitioning some large accounts into us at higher rates helped us to improve the throughput. Though I would attribute much of the portfolio increment largely towards a reduced number of folios, which is because retail participation had come down in the last quarter. But the corporate actions revenue when distributed over a reduced number of folios obviously will semantically show to be a higher price folio. So I wouldn’t read too much into that. I think the math would automatically adjust.
Itself into the coming quarters in terms. Of the perfolio pricing. But yes, I think this is just literally a combination of fabulous number of growth, amount of growth in terms of net new number of companies added into this business and the corporate actions that I’ve taken on a smaller retail on a retail investor base.
Karthik Chellappa — Analyst
Okay, excellent. My next question is if I were to look at our standalone on the employee expenses side, at least for the last two to three quarters, that has actually been rising in single digits. While that has given us a very good operating leverage at a standalone margin level. I’m just curious to see how sustainable this is and to relate that to your point on how you’re looking for AI, an opportunity to disrupt yourself rather than somebody else disrupting you. And investing a lot more in productivity enhancing measures. Whether the employee expenses rising in single digits for the standard on business alone is something we can sustain on or do you think that should normalize as we actually gain in scale?
Vivek Narayan Mathur — Chief Financial Officer
Thanks, Karthik.
Venkata Satya Naga Sreekanth Nadella — Managing Director and Chief Executive Officer
No. So we continue to look at the payroll cost. What we have done over a period of time is drove what used to be a significantly bottom of the pyramid, you know, kind of made it into more like a rectangle and then possibly it will go further up. It is counterintuitive. You know, everybody expects services industry to be like a traditional pyramid with a lot of individuals in terms of, you know, carrying out activities at an operations level. But a shift to a high tech business almost always calls for, you know, senior and you know, technically well equipped individuals who will drive a lot of automation to reduce laborious manual activity.
Part of this is, you know, it is actually not a reduction of cost as much as, you know, improvement of services, you know, which we accomplish through, you know, removing the manual error elements. As we process crores and crores of transactions today we process little over, you know, one and a half crore transactions a day. Almost $300 billion worth of money gets settled on our accounts. You know, the margin for error is negligible. So basically what we’re doing is, you know, the count, you know, the pyramid is transitioning. The count probably will not grow much further.
And as this entire senior, you know, technically strong team tries to drive more and more automation straight through AI, I expect the payroll cost to probably come down, but that will have a compensatory cost escalation in the form of technology. Now some of it may be one time, some of it may last more than a couple of years, but that is very much required as we an organization trying to be a global entity. And Indian mutual funds itself today touching almost a trillion dollars, poised to cross 2, $3 trillion into the next five to six years.
The volume of transactions will expand in a phenomenal manner. And with every transaction increase, the data exposure to us increases tenfold. So it is in that direction. So I think I draw comfort in. The fact that we could keep the payroll cost around that number. It may remain to be so, but what you will see is probably the non payroll cost expanding. But all we will endeavor to keep our margin ranges around 40 to 45% despite the cycles.
Karthik Chellappa — Analyst
Excellent. Thank you very much for the detailed response. That’s all from my side wish the management team all the very best for the coming quarters.
operator
Thank you. The next question is from the line of Srinik Mehta from Indo Elves Wealth. Please go ahead.
Unidentified Participant
I. I wanted to ask you some question about the Ascend acquisition and how you’re seeing this to become EPS accretive over a period of time. Currently we obviously see that the EBITDA is slightly lower compared to the Indian operations. How do you see this evolving? When do you see this becoming EPA Security?
Venkata Satya Naga Sreekanth Nadella — Managing Director and Chief Executive Officer
Thank you, I’ll take that question. So on a cash basis, SMT is already EPS accretive, notwithstanding certain accounting, you know, adjustments that were required in the form of deferred tax liabilities, etc. But by and large it is however a fair observation that the margin of SN T is well below that of K Fintech’s business and rightfully so. K Fintech’s been in existence for nearly 40 years and ascent is five, six years into it. And much like extremely fast growing businesses, you would see the initial spring of growth largely coming in the form of negative margin.
In fact, the fact that they have already turned around the corner both at EBITDA and at PAT level is a true mark of phenomenal leadership of the founders at Ascent in terms of not just expanding globally into 18 different countries, supporting some of the most complex fund structures, into private equity, into hedge funds, into digital funds, so on and so forth. They have also managed to keep the cost very, very firmly in the synosia to ensure that the margins do improve. And of course it is only through the continued expansion of margins, through one scale expansion and two cost optimization, will there be a significant fortification in terms of the monetization of the overall asset for both the entities as well.
So, so I expect every quarter there may be quarters which may be adversarial in terms of the market movements, but by and large, as you may have seen in every other business we have done so far, whether it is alternate investment funds, whether it is international, whether it is national pension system, K Fintech too had seen the first two to three to four years steadily improving its margins, including acquisitions that we have made which were negative at the time of acquisitions acquisition, but slowly gravitating towards our organizational EBITDA margins and now contributing pretty much to strong growth.
So whilst you do not see SN numbers kind of meeting Cafe Fintechs into immediate future, but it is definitely a three year plan that we believe we can get that far and in fact at that point in time we expect essence margins to be even higher than the TopCafe index margin. In the context of faster global growth, higher yield that we derive and higher productivity given a fairly standardized fund administration that exists globally as compared to that of India. India continues to be extremely bespoke and that’s the reason why the AIF growth in India comes with probably slightly lower margins as against similar growth in the international markets.
I hope I answered it question.
Unidentified Participant
Great. Just another question in the same same line. Are there any thoughts about establishing some kind of a GCC kind of an operation given that you know you will have far more expansion globally at a faster pace in. In the. In the medium to long term.
Venkata Satya Naga Sreekanth Nadella — Managing Director and Chief Executive Officer
We we will be. In fact work is already on. Is a great question. We have secured license Gibbs City, you know and created a subsidiary in the direction. Our intention is to consolidate over time the delivery of all international business into that entity in Gujarat. And in addition to you know, talent expansion that’s happening and the phenomenal number of opportunities that are coming up in Git City. As we all know, we are probably the only entity in Git City who basically is able to administer fund solutions for mutual funds, retail funds, international funds, India domestic aifs and also issuer solutions.
We have taken the first two companies that have gone public in Gibbsity as the register and transfer agent. Being located in Gibbs City has imminent advantages over and about the opportunity there some opportunities around tax credits. There is a 20 year tax credit that we will get. But it’s still early days. But short answer to your question is yes. We are thinking we are invested in creating a large GCC especially for the international operations. In the operations. I guess our strategy had been different as we have explained several times over which is to move away from tier one city into the tier two Tier three cities.
Part of that is cost, part of that is retention of talent. But above all we are seeing fabulous amount of talent available in tier 2 tier 3 cities. And we believe that it is also our social responsibilities to move to as many of those cities as possible within India to be able to provide employment and do our own little bit. For example, today our presence in Bhuneshwar is expanding towards 500 odd individual. Vijayawada has about 300 people. Gujarat is expanding and we are looking at more tier 2 tier 3 cities to be able to drive some of the risk away, concentration risk that exists in large tier one cities like Hyderabad, Mumbai, Bangalore, so on and so forth.
So yeah, GCC is for international India. Domestic strategy is largely hyperscale, hyperlocal, moving to a lot of cities rather than being present in one large city city.
Unidentified Participant
All right, thank you so much.
operator
Thank you. The next question is from the line of Lalit Mohandeo from Equity Securities. Please go ahead.
Unidentified Participant
Yeah, hi, good morning. I have two questions. So firstly on the international business of excluding ashes. So there we have seen that like the AEM, growth on a sequential basis seems to be around 10, 9 to 10%. Whereas if we just look at the revenue, so that seems to be broadly flat on a sequential basis. So just wanted to understand how the revenues in the international business will pick up in that segment excluding the asset business. Second question was on the ascent business itself. Now when, when we are looking at improving the margin. So in this segment, in this business.
So just wanted to understand like the margin improvement, will it be on both accounts, both on the employee expenses side as well as on the other expenses side or. And where do we intend to take this in each of these segments by in the next two years?
Venkata Satya Naga Sreekanth Nadella — Managing Director and Chief Executive Officer
Sure. Thank you. I’ll do the second question first. I think part of it I’ve already answered. Every acquisition that we have, every new line of business we have, we usually. Have a three year strategy. The intent is that we challenge ourselves constantly to push each of those businesses to arrive at similar margin profile as the rest of the organization within 36 months. Thus far we had been vastly successful with the exception of business lines for various different reasons. But by and large we see a. Very good line of visibility in terms of ascent getting that far within that. Time frame into the 36 month time frame.
Unidentified Participant
What will contribute to that?
Venkata Satya Naga Sreekanth Nadella — Managing Director and Chief Executive Officer
I think every lever that is possible, part of that is just simple scale. That means as you keep expanding your revenue profile, a lot of your fixed overheads get absorbed and hence your margin expands which is typically a symptom that you would have seen even national pension system for example. For us it’s been a loss making business for the last four years. Not just have we turned around, we’re kind of looking at a very, very healthy double digit margin. Just a matter of few quarters which is the same thing that will happen.
So there is scale that drive it. Payroll cost, you know, to an extent I won’t put my top bet in payroll cost optimization. In essence a business that is designed, built to grow geographically with a strategic ambition to become a global fund administrator. We should not be, you know, cutting corners in the form of feet on street into the geographies. Having started, you know, so many countries operations. In fact I’d expect probably some amount. Of expansion in that even though productivity. Will continue to significantly expand. So for the same quantum of work. We may need fewer people, but in general we’ll need a lot more people as we grow our business into this 30, 35% kind of a clip year on year. It is probably the non payroll expenditure. Where we may see immediate amount of traction in terms of optimization of costs. So for example real estate costs. Much of SMT is also present in India and in Malaysia. In terms of headcount, 200 out of 300 people are based in these two locations, which is where K Fintech also has very strong presence. So we will be consolidating real estate costs, infrastructure costs. As we all know, we are one of the largest data fiduciary in the country with over 89 petabytes of data. The amount of support we can afford, I mean we can afford in terms of consolidating whether it is data centers, whether it is licenses, whether it is tech manpower, digital ui, ux, so on and so forth is quite substantive.
The last six weeks had been in that direction. Our focus to be able to identify the non payroll cost synergies that we can drive them down and hence reasonably quick margin uptick. Obviously many of these are contractual in. Nature so we’ll have to wait for. The life cycle of that particular contract to end. Or if I have a multi year contractual lifecycle, we might probably look at a premature termination but then be able to identify how we can optimize the. Cost based on the cave in zone structures. So yeah, so basically every lever that is there we are constantly working on including the upsell cross sell component of it. I think on the first question was about domestic funds. If I’m not wrong in terms of the AUM growth being there, but the revenue not necessarily translating into as much we’ve known this beginning of this year itself, I think you probably would have seen a trend kind of through the. Year which is a combination of of. Extraordinary discounts that were given at the beginning of the year in the very month of April obviously meant that the AUM growth need not necessarily have translated. Into the revenue growth into this year. But the base effect will end by end of Q4. As the base effect ends, what you would start seeing is growth of revenue nearly dovetailing that of the AUM growth. Into the coming year. So to that extent it is expected, anticipated and has already been modeled into our books. On the international investment solutions excluding the aspect.
Vivek Narayan Mathur — Chief Financial Officer
Srikanth, I’ll take over this question on the international business. While we have seen that you know the revenue has gone up without ascent for the GFs is about 5.7% sequentially quarter on quarter and a little more than 11% year on year. The AUM has come down slightly and the BIPS AUM has gone up but the BIPS has come down slightly from 4.73 to 4.13 YTD Dec 25. That is largely because many of the funds are still on the minimum fee and as they cross the minimum fee, the yield will the, you know, the yield will come in in terms of BIPS based pricing and we do expect with, you know, the newer contracts coming in, platform revenue coming in from international business that Srikanth talked about earlier, the overall BIPs will improve as we go forward and start winning larger contracts which Srikanth alluded to earlier in his commentary.
Unidentified Participant
Does it helping? Could you just give us a split of the solution business between folios, corporate actions and ip?
Vivek Narayan Mathur — Chief Financial Officer
I’m sorry, didn’t get you.
Venkata Satya Naga Sreekanth Nadella — Managing Director and Chief Executive Officer
Sorry. The, the voice is a little muffled, not able to hear very well.
Unidentified Participant
So I referring to that split between a split of issue solution business between folks corporate actions and IPO shipping income.
Vivek Narayan Mathur — Chief Financial Officer
You want a breakup into in terms of how much is the percentage of revenue mix in corporate registry. Correct?
Unidentified Participant
Yes. Yes.
Vivek Narayan Mathur — Chief Financial Officer
Yeah. So corporate, corporate registry, 47.6% of the revenue comes from folio maintenance. About 40.2% comes from corporate action and 12.2% comes from value Added Services.
operator
Thank you. The next question is from the line of Mohit Mangal from Centrum Capital Limited. Please go ahead.
Mohit Mangal — Analyst
Yeah, yeah. Thanks for the opportunity and congratulations on a strong set of numbers. My first question is towards the yield. So you said that, you know, the yield contracted a lot in this quarter owing to a shift in the mix towards the ETFs. So going forward, if this trend kind of continues. Right. Maybe for the next three to four quarters, then how do you think we should look at the yield contraction versus the EM group? That’s my first question. Second question is towards the issue of solutions. So I wanted to know, I mean say considering a medium term of say two to three years now that we already have about 168 odd million folios, how do you think the growth would kind of span out in this segment? Yeah, that’s it.
Venkata Satya Naga Sreekanth Nadella — Managing Director and Chief Executive Officer
I want to just clarify the point about the yield correction. It is marginal, it is not substantive. I commented about the yield correction at. The beginning of the year, right. When seven, eight of large contracts, you know, went into renegotiation phase. This quarter reduction is extremely marginal and that is on account of assets mix shift more towards gold, silver, ETFs. And hence I’d expect the yield to stabilize to where it is now and probably even go up. Should this frenzy of the metals ETFs. Like everything else, there is seasonality and cyclicality. I expect good sense would prevail. And over a period of time the equities would come back to favor. So there is no significant yield correction. I just wanted to correct that particular map on that.
Mohit Mangal — Analyst
My apologies. The second question was on what again issue a solution. So basically we have about 168 million folios. So just wanted to for the next two to three years. How do you see this padding out here?
Venkata Satya Naga Sreekanth Nadella — Managing Director and Chief Executive Officer
No, it should see if you see the folio expansion is a component of, you know, number of demat holders now, which we all know is continuing to expand over 25% data. And a vast majority of Indians still do not have a demat account. And I expect that will continue to grow as the overall financialization as the team expands in India and movement from savings into investments as a philosophical trend changes. That is one which is more demat accounts hopefully will translate into more participation in the secondary markets and hence more folios. Second is of that how many of the clients are the clients that cafe in services today? And that is where I was stating that our market share has now gone to 51.4% in terms of the market cap of the Nifty 500 companies.
And as we win more and more companies and we transition more and more companies, consequently the portfolios will continue to expand. Third item is the market performance itself. Retail investors, as we all know, at least preaching to the choir is generally, you know, a fairly risk off approach when the markets do not give conducive returns over a period of time. And which is what we are seeing, I think, you know, Indian markets have barely moved into the last 18 months. And the first 12 months the folio participation or the retail participation was still good. That was the previous year.
This year we have started to see a reasonable amount of movement away by the folios or by the retail investors. From the secondary market markets. We still continue to grow because of the net new number of clients we have added and hence the retail participation in those. So what I expect to see, you know, should the market turn around is actually a double whammy, which is a lot many more companies to go public and retail folio expanding and thereby the revenue expansion to be even faster clip. Than what it is at this point in time. Not to mention, you know, should the results Be very good. So will the corporate actions be. So it’s hard to predict. There is a lot of macros associated with that. But we believe that we have unlocked, you know, this, what used to be a 10, 11, 12 person kind of a growth momentum business into anywhere between, you know, 15, 16 to 20%, you know, kind of a good business year on year. And that if that were to factify, that means the number of folios will have to expand at a faster clip, which is what I think will happen.
Mohit Mangal — Analyst
Understood. This is helpful. Thanks and wish you all the best.
Vivek Narayan Mathur — Chief Financial Officer
Thank you.
operator
Thank you. Before we take the next question, a reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Devesh Agarwal from I Capital Services Ltd. Please go ahead.
Unidentified Participant
Yeah, my first question would be on the AI emergence. Although you did touch upon it, but you mentioned that it’s more of a basically a opportunity rather than a risk. But what I wanted to understand what I always thought that one of the anti barrier for any third RTA to come in is the vast amount of data that you need to process and obviously the initial cost which would lead to a losses. But with AI coming in, does it becomes commercial sense for a third RTA to emerge even if they have to do this activity for a new mutual fund or a digital only mutual funds?
Venkata Satya Naga Sreekanth Nadella — Managing Director and Chief Executive Officer
Hi Devesh, great question and something that I’m often asked about and something that we ask ourselves often enough as well in terms of, you know, as a part of our risk management we have to consider the potential impact of a third interest. I mean we should never be arrogant to think that, you know, there won’t be a third or a fourth or a fifth entrant. I do believe possibility always exists, but world over, if you see the phenomenon, inevitably, you know, it’ll end up with, you know, two or three consolidation, for example, in our industry.
While today it may appear like there are only two RTAs. If we kind of, you know, take a step back and look at what was the situation prior to 2020, just five years back there were several more RTA’s. There were actually eight RTA’s when I joined this industry myself and even more prior to that. What happened is basically consolidation. Consolidation happened because until and unless there. Is significant scale in this business, it. Is, you know, it’s near impossible to get both ends meet. Right. Even if you have very deep pockets, you know, want to burn cash for a decade, it would still be a very tough thing to accomplish in this business and also considering the fact that our own yields what used to be 6, 7 basis points are now about 3. But a third entrant to come in. Obviously there has to be a business case for anyone to take the risk and cut over. And if that does not give a 40, 50, 30% kind of optimization, it makes no sense for anyone because.
Because there’s a cost of transition itself is way too high, not to mention about the risk of transitioning, which can be quite catastrophic in the scale that we operate at. So I would find it hard business wise for anyone to enter into it. AI probably may reduce certain amount of cycle time on the tech development, but where we exist is in the crossroads of tech and domain and it is truly the domain knowledge that we bring to the table. You know, that makes the most significant difference otherwise today, if you see or not just today, even over the past number of decades, you want to start a bank or insurance company, you want to start an oil company, you want to start a B2C.
Many large enterprise players like SAP, Oracle, Microsoft, they always have enterprise solutions and that’s what you take. But for this very nuanced business, nobody has been able to create platforms like this. And that truly is our mode. So I don’t think AI is going to take that domain competency away. And even if it were to at some point in time, the business dynamics in terms of unless there is a massive consolidation and somebody wins 15, 20 clients together, it makes no sense. Winning new clients is not nearly going to cut ice in terms of even breaking even to the next 10 years for a new RT.
Unidentified Participant
Makes sense, very clear. And my second question was on the international business or the asynt. Historically we have seen although we had a very strong client wins, but typically I think these were smaller clients. So just wanted to understand the progress in terms of winning newer mandates from a middle medium to last size clients.
Venkata Satya Naga Sreekanth Nadella — Managing Director and Chief Executive Officer
That had truly been our focus. You’re right. I mean many of these are, these are very large logos in terms of names. But I think we need to respect the fact that these are relatively smaller geographies. I mean we’re not exactly in the US and Europe and Japan. We’re in countries where the capital markets are buoyant enough are fragment enough to embrace outsourcing and even offshoring. If I may. But let truth be told, the total corpus of AUM is not that significantly large. And yes, of what is there. It is also true that we have managed to scoop out probably nearly all new AMCs and many of the small tiered AMCs.
But what we have seen in the last 18 months is that we started winning larger mandates. Larger in the context of those geographies, we should not equate them too large like our mutual fund houses which are probably on an order of 20 to 30 times larger. But for example, we won one of the largest trustees based deal last year. Aman Raj, Investment managers, you might be aware we have already explained we have won a large pensions platform solution provided in one of the East Asian countries which is also a material contract in the context of international business.
And these businesses typically, as I always call there is a maturity cycle when you go into a new country where you are not known and it is a B2B in a highly regulated space. The acceptance of a third party from the standpoint of not just commercials, commercials is an easy win. We can easily demonstrate that we are able to show significant amount of money. But despite that, the conversion tricks are a little tricky because of the risk in terms of transitions. The same risk that I’m calling out as to how complex it will be to migrate from one to the other.
The same risk exists when we have to win a mandate as well. And the first three, four, five years is largely about delivering exceedingly strong value to the limited number of clients who would have won. Most of them could be small ones, but it truly takes that amount of time for the large fund managers to stand up, take notice as yes, there is a lot of value that we can unlock. We have already seen not once or twice or thrice, but 100 different clients and now is the time to move. And that is a conversation we are having with the medium and large tiered AMCs.
And of course the conversion, the sales lifecycle is slightly longer. But this is a business that is not meant for quarter to quarter as you know. This is organization been here for 40 years. We are building the organization for the next 20, 30, 40 years and conversions will happen in terms of medium to large amount where we have already seen the glimpse of it in the form of winning two large contracts in the last year alone. Even as many are under a negotiation. Phase at this moment.
Vivek Narayan Mathur — Chief Financial Officer
Just to add to Srikanth’s point, Divesh, this is Amit here. Look, I mean Ascent, you know when we say that they won 47 funds this quarter, so that doesn’t mean that you know that the fund activity has, you know, the lower down for this quarter for them. And also I mean overall it’s like you know, more than 100 funds they have won during the quarter. But when we say 47 funds, you know, one, it means that you know, these, these are the number of funds which have gone live, you know, they have, which means that you know, these funds have become active in terms of the launch and all.
And hence, I mean, you know that these are the funds which you can see. I mean in terms of the revenue recognition and also so as November, December typically, I mean from the fund launch perspective is a little less active quarter given that this period people are more engaged in the new activity and all as we hit the Jan, Feb and all this quarter, I mean we are seeing more aggressive in terms of the fund launches and also and this number will catch up. So to give a perspective, Ascend did basically they were on a monthly revenue run rate of around $1.5 million last December 2024.
Now as we speak now they are more than $1.9 million in terms of the monthly revenue run rate. And also they are well on track in terms of the growth. You know, the guidance that we are envisaging for the company.
Unidentified Participant
Makes sense. And lastly, if I see the asset mix for your international business, I see multiple categories. Now on overall basis we understand that the blended yields are somewhere around 6 to 7 basis points point. But is there a significant difference between hedge fund AUM or public market or digital assets? The reason I ask is that we want to track if a particular segment grows faster, will that have a positive or negative impact on the blended yields?
Venkata Satya Naga Sreekanth Nadella — Managing Director and Chief Executive Officer
So see, I mean from the blended yield perspective, so the asset class wise. As far as the Afghan business or the private mandate business is concerned, you know, I mean it, you know, doesn’t make a big difference in terms whether it’s a hedge fund or a private equity or let’s say digital assets. And also the yield structures are more or less the same. But as we move into the public market funds and all definitely. I mean compared to the private market here, the expense ratios are also little lower compared to what we see in the private market fund. So hence, you know, the yield structures would also be a little more different.
But it also depends upon the size and the scale of the, you know, the AMC as well that deciding. But yes, I mean given that ascent is largely into the private minded side and today if you see the portfolio of the international business is more tilted towards, you know, the private, you know, the mandate side and all. I mean the yield structures would materially not be different. You know, when we talk about different class of assets, whether it is, you know, the hedge funds or the private equity, or let’s say the digital assets.
Unidentified Participant
Perfect. Thank you so much. And all the way.
operator
Thank you, ladies and gentlemen. We will take that as the last question for today. I now hand the conference over to Mr. Vivek Mathur for his closing comments. Over to you, sir.
Vivek Narayan Mathur — Chief Financial Officer
Thank you. It has been a great quarter with the integration of Ascent. And as we have seen that including Ascent, our year on year growth on revenue from operations is well within the range of guidance that we give of 15 to 20%. And the EBITDA margins are in the range of 40 to 45%. We believe that, you know, we will continue to maintain that guidance going forward as well. Thank you very much for joining the call today.
operator
Thank you. On behalf of IIFL Capital Services limited that concludes this conference. Thank you all for joining us today. And you may now disconnect your lines. Thank you.