Kfin Technologies Limited (NSE: KFINTECH) Q4 2025 Earnings Call dated Apr. 29, 2025
Corporate Participants:
Unidentified Speaker
Sreekanth Nadella — Chief Executive Officer
Vivek Mathur — Chief Financial Officer
Analysts:
Unidentified Participant
Divesh Agarwal — Analyst
Kartik Chellappa — Analyst
Supratim Datta — Analyst
Abhijit Akella — Analyst
Sarthak Nautiyal — Analyst
Pranuj Shah — Analyst
Dipanjan Ghosh — Analyst
Sanketh Godha — Analyst
Kishijit Saraf — Analyst
Prayesh Jain — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q4 and FY25 earnings conference call of Kfin Technologies Limited. As a reminder, all participant lines will be in the listenerly 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 the star then zero on your touchstone phone. I now hand the conference over to Mr. Divesh Agarwal from IIFL Capital Services Ltd. Thank you. And over to you, sir.
Divesh Agarwal — Analyst
Thank you, Steve. Good morning everyone and welcome to the Q4FY25 earnings call of Kfin Technologies Limited. Today from the company we have with us Mr. Srikanth Nadila, MDN CEO, Mr. Vivek Mathur, CFO and Mr. Amit Murarka, Head of Global Business Finance, M and A and Investor Relations. I would now hand over the call to Srikanth for his opening remarks which will be followed by a Q and A session. Thank you. And over to you, Srikanth.
Sreekanth Nadella — Chief Executive Officer
Thank you so very much Divesh and very good morning and a warm welcome to all the listeners. It gives me great pleasure to be back once again in front of you calling out the financial performance of the organization. I’ll give out some qualitative information beyond what is obviously visible. Your organization continues its resilient performance quarter after quarter. As the saying goes, tough times don’t last, but tough men do. A quarter that saw a significant erosion on assets under management, maybe even to a certain extent, investor confidence in the overall market. Capentech continues to deliver to a resilient performance with its very diversified portfolio of solutions and services.
We continue to maintain our position about risk management being one of the most effective strategies this organization has adopted and results continue to do so. Risk management from the standpoint of not being a single asset class, single country, single business process entity, but to diversify into multiple asset classes, multiple business processes and into multiple geographies. It is times like this that you know, help the investors understand in terms of the power of the true diversification in terms of the overall financial highlights. The quarter that had gone by, our revenue from operations stood at roughly about 283 crores, up 24 crores.
Indian mutual fund business obviously had seen a slight degrowth quarter on quarter, but year on year it continues to swell up. Overall, international and investor solutions growth has been around 16.5%. I will call out more specifically in terms of a consolidation of global business solutions into this particular line of business which was erstwhile mortgage business, if not further consolidation Our overall growth stands at about 27% and the overall full year growth of the international business stands at about 46%. Our EBITDA stands close to about 122 crores, it’s up nearly 17% and a margin at about 43.2%.
The pad itself has been around 85 crores and it’s up about 14.5% and its margin remains at about 30%. Broadly so in terms of the overall quarterly performance, it’s in relation to whether it is the number of TMAP account reductions in the form of retail investors, not necessarily staying put in the market or the mutual fund mark to market AUM erosion. As you could clearly see, the overall organization stood resilient in terms of the overall growth year on year and even quarter on quarter. It is minor dip up at about 2% in terms of revenue and similarly on the margins.
The full financial year highlights of course standard about we crossed the 1000 crore turnover threshold, close to about 1100 crores, up nearly 30% year on year and nearly every line of business has clocked about 30% growth whether it is pensions or whether it is mutual funds international, so on and so forth. We continue to stay extremely focused on our proven engineering delivery capabilities delivering cost efficiencies driving productivity. We have begun our initial journey of embracing artificial intelligence. I’ll speak about that a little bit more later in terms of how we foresee that to help in terms of driving revenues, our customer centricity as well as optimizing the cost structures along the way we have a cash and cash equivalence as of 31st March close to about 660 crores and a dividend of 7.5 rupees per share has been declared by the Board and subject to shareholders approval shall be disseminated overall in terms of the business, the biggest highlight K Fintech has had to offer, which many of you might have already heard in the earlier analyst meetings, was about K FinTech signing a definitive agreement to acquire a controlling stake of its in the Asset Fund Services Singapore based organization.
This is a testimonial to our confidence in our abilities to deliver to the strategies that we have chopped up. M and A as I’ve always maintained is always long protracted and it is meeting of minds more than anything else. This is a large acquisition for KFN by Kingston standards by any stretch of imagination both in terms of its ambition as well as its financials that have gone into it. With this we would have summarily closed our large M and A ambitions for the foreseeable future There will be minor plug ins which we may still continue to evaluate.
We have a very thriving and active M and A board, but by and large I’d like to believe that the larger positions owed into the near foreseeable future we wouldn’t be looking at it given our current intent is to complete the structure, integrate, assimilate, scale up and drive to our global ambitions properly. We continue to win mandates across business lines Assured Solutions a business which has seen over 20% plus growth we have had a stellar year. We have added nearly 1,000 plus corporates into our roster, getting the number closer to 8,000 by terms of market share.
We now are the service provider for nearly 50% of all NSE 500 companies. No listed companies. We have done the top three of the biggest IPOs that have happened in this country this year, whether it is Budget, Housing, Finance or Hyundai, so on and so forth. The next bunch of large IPOs too are being managed by Cape Fintech. We continue to expand our market share in the alternate investment funds. We continue to expand our market share on the national pension system in fact by a factor of three. The overall industry has been growing at about 12% whereas Cape FinTech’s market Spain market share has been growing at nearly three times of that, close to about 33 34%.
Internationally too we have expanded our roster to about 76 clientele, independent individual clientele with a total contract of close to 100 at this point in time. As we all know, we deliver both to transfer agency and fund accounting included in this international client win is a very large deal. Again in the context of the international revenues that we speak about. It’s a multi year fund accounting platform given to a very very large trustee by the largest trustee in Malaysia. And the overall it’s going to be a full service DTA deal. DTA here stands for the Distributed Transfer Agency as well as the end to end transfer agency and fund accounting for the trustee.
Which means that all the asset management companies who fall who roll up under that particular trustee will be serviced end to end by capintech. We have also won a full service tier deal in amc, you know, large AMC in Philippines. We continue to have a very robust pipeline into the international mutual funds business. As we all know kfentecs, the international business is mostly mutual funds and transfer agency and fund accounting being the business services we render for them. Whereas ascent to delineate and call out the complementarity we have with them is broadly a private mandate fund administrator which means Your hedge funds, your private equities, venture capital, high frequency trading funds, digital currency funds, so on and so forth.
So they specialize in that K. Fintech specializes in largely mutual funds, pensions, private retirement schemes, so mass retail so to speak. And these two entities together, you know, will be able to provide a full suite of service to any asset class to any country in the world. As an organization we continue to expand our scale of operations into countries as we all know. We have initiated starting of our services into Thailand last year. The contract has gone fully live into this year and with resounding success. We are now able to see organic growth of pipeline in Thailand, which is an area of geography which is of very, very strong importance for us.
Even as we have reached nearly 55% market share in Malaysia of all asset management companies that are present there. We have since then added my market share, as I said in terms of NSE for issue solutions, close to 50%. The new RTA mandates in no quarter include several of the fintech companies, including GEM, Aromatics and biosciences companies, so on and so forth. This in conjunction with the IPOs that have happened in the previous year adds a robust annuity revenue to the coming year even as we are expecting and hoping to have a pretty robust IPO year even into the coming one as well.
That ensures that the businesses which are not linked to mark to market movements continue to grow beyond 20% to be able to provide that amount of hedge and risk management and diversity should there be a side world or a downward movement of the markets. But lo and behold, we have seen a very sharp turnaround in April, which you all must have witnessed yourselves to very early days. But we have already seen a reasonably quick turnaround of the AUM in the month. Of course April is not done, but looking at where we are, the initial estimates point to a growth over March and in fact looking closer to the numbers that were there in Q3 of the previous year, so to speak, in terms of the alternatives, a quick milestone we have now crossed reaching nearly 600 alternative investment funds as we speak today and market share has increased close to 37%.
The overall AUM is at about 1.5 trillion rupees and it’s grown nearly about 50% year on year. As investing stand today, we continue to add marquee logos, apart from of course adding the new schemes of the existing clientele. Some really important clientele that have added at this point in time include Kedara Capital Valuequest, of course been there for a while and continue to add more Stuff from each of these marquee global fund managers. We have also ventured late Q3, that is around October, into wealth business trying to orchestrate similar amount of industrialized and innovative solutions.
What we have done in asset management business into wealth business we have created what we’d like to believe as the country’s premier wealth management platform called MPower Wealth. The platform is built on top of MPower, which is the core platform of Hexagram, which we all know as an organization we have acquired a bunch of years back. So while Hexagram continues to deliver value in terms of borrow management solutions, fund accounting solutions such as net asset value computations, what have you on the back of that platform, the wealth platform has been created and within a matter of few months, very happy to inform you that we have signed up with five large wealth managers.
Some of this was already announced in the previous quarter, but in this quarter into the previous three months we have signed two more wealth management companies called Thrive wealth and Northerner Capital. The pipeline for this business is pretty strong as many different wealth outfits will set up in India. Even as many of the legacy outfits are also looking at innovative partners such as capintech to be able to move their non core functions such as operations and technology and focus largely on customer acquisition and delivering value to the customers by generating significant alpha for the investments that they are making.
Broadly in terms of the overall industry performance itself, you know, you have seen some of the charts clearly speak about. You know, FY25 was a breakout year by any stretch of imagination for the Indian mutual fund industry. Spectacular growth overall, nearly 25% year on year. If you compare to the previous year, notwithstanding the reduction in the Q4 of the previous year, the year would have ended on a much, much more robust manner. But these are financial markets. There is always a cyclicality. One should always brace for it every once in three to four to five years.
And for us it’s business as usual. There is nothing to panic and as you’ve already seen, there’s been a sharp turnaround in that area. K Fintech continues to have a very robust SIP market share, close to 40% I believe. And I continue to believe that that is probably the most important metric to track to which over a period of time would drag up or drag down the overall AUM market share. Because the SIP market share is the one that truly is the resilient sticky and retail investment portfolios. Unlike large lumpy investments which come from corporates which tend to have a sporadic impact in terms of market share, but they can dissipate rather quickly.
So into the coming quarters and into the years, my hope and expectation is that our overall AUM market share, which is now close to about 33% should inch towards that 39.4 to 40% of market share. It’s only a matter of when and not if. And I hope the continued outperformance of the AMCs who cave FinTech services today, which by the way, 6 out of the 10 fastest growing AMCs are with K Fintech. So it is not just about historic performance, it is about where the velocity is, where the speed is and that’s what’s going to drive the future as the, you know, at age goes past performance is not necessarily indicator of the future and I think it is the current velocity in terms of the AMC who are largely embracing digital, embracing innovation and technology, embracing significant distributor related driven sales and marketing effects are the ones that I believe will have the fastest growth to accomplish.
And I’m very, very happy to be able to and proud in fact to have a roster of clients such as those including the ones that we have won in the recent past. Broadly in terms of if you take a look at even the other asset classes, I think there’s been a breakthrough here. Whether it is a number of AIFs, whether it is the number of demat accounts that have been added into the ecosystem and the pension subscribers of course continues to grow at a smaller clip as compared to the asset managers. I think India as a pensionable society is still some time away.
There have been significant efforts made by the regulators and under the chairmanship of the last two and three in fact chairman’s who have definitely made a significant impact and it’s a matter of time through innovative solutions such as what K Fintech is able to offer. We had created back in the day a solution called Future where we can gift a pension and we are seeing breakout performance of that platform’s adoption into corporates. And I’m hoping that in time to come the overall pension subscribers expand significantly into the country quickly moving on, I will cover a little bit in terms of the value added solutions and services.
It had been again our intent to deliver superior technological solutions digital as frugally as we could. And a lot of the solutions K Fintech creates obviously for us to render superior solutions to our own clients and their clients who are the investors and distributors in some sense. But we have found that many of these actually have a relevance. Whether it is as an offering that we can offer to the regulators, we have won The RegTech, the first RegTech award that we had given the previous year for our platforms. So most of the platforms that we build, we are extending them to the regulators, to the industry bodies and to the clients as well.
And that is where our value added solutions which is effectively to drive a higher revenue profile in terms of reducing the total cost of operation for our clients but increasing our share of wallet given the relationships we have and given the technological solutions we create. Very happy to inform you that the previous year saw a 57% increase in value added solutions revenue year on year. What are those? There are many of them. Some of them are platforms for monitoring insider trading, some of them are APIs which extend to the fintech ecosystem to expand the overall book of business.
For them it is creating some of the cutting edge data engineering solutions which help our clients improve their revenue. In the scheme of things, we manage the data engineering lakes for several clients and we also have created technological solutions of mobility stack the entire whether it is the websites and mobile apps for our clientele, we are handling the social, the analytics and the cloud components as well. Also happy to inform you that K Fintech has become one of the affiliate partners for aws. We have entity called K Fintech Cloud Services. We are now taking the capabilities we have built to help many clients and that could be in any non asset management space as well to migrate into cloud as a strategy.
So clearly carving out a fintech component of K Fintech which is basically revenues beyond the asset management solutions is a very, very important asset. And our wins into the previous quarter coupled with all that we’ve done in the previous year, as I said, has given us a near, you know, 57% increase of revenue year on year. The acquisition that we have done in the previous year by Biotechnologies as we all know, is one that specializes in the mobility stack of it all. And that entity has given 150% growth in its top line in a single year and we’d like to believe that it has a significant amount of growth lying ahead of it.
I’ll quickly cover the international footprint as I’ve already spoken in terms of the wins we’ve had. I called out the two important wins. One is very large trustee in Malaysia and as I said it’s a full hexagram deal so to speak. So this is not a transfer agency but it’s a full scale fund admin deal and a DT and the distributor transfer agency component of it. Right. And we have also one more in Malaysia which is, which has been verbally confirmed and in Time to come. Hopefully we’ll have a clearance on that. And another large TA deal in Philippines.
We have onboarded three new funds in Giftcity, taking our total funds to close to 30, making our market share close to about 50% in the Giftcity funds. And with AS and fund services, should we include that? Obviously our market share will be far superior to that. We intend to get to 3/4 of the total market share in the Gibb City with a combined strategy of one plus one, you know, equaling 10 in some sense. And you know, we have initiated some of those conversations in terms of operationally, how do we align both the entities to drive a faster, you know, growth as against individually competing.
Obviously we are collaborating and then we would be driving the growth from here onwards. And happy to also tell you that we have now reached 100 contracts in our international business. And if you recollect the one of the points that I had made in the initial days was the contracts that we had been signing initially were in obviously the smaller and the medium tiered AMCs and it’s a matter of time, the larger contracts tend to come in the last quarter we had announced a large contract win this quarter too. The deal that I’m talking about, the trustee win, is also a materially large contract in the context of our international business.
Also very happy to inform you that after a protracted period of mark to mark either DE growth or flat growth in Asian markets, which did not honestly give us the gains of transfer agency revenue growing, which if you compare with India, Indian markets went up and hence our MFTA revenue also grew. But our revenue in international grew nearly entirely only because we kept winning new mandates. But the AUM per se did not grow because Asian markets did not see both the mark to market movements as well as net growth. But this year FY25 saw the first year in the last four years both mark to market gain as well as net inflows.
Which means that the revenue hopefully from now on would be on account of both new wins and more importantly on the back of the expansion of the AUM of the current clients. So the AUM grew nearly about 33% year on year into the previous year and I’d like to believe that this would be a sustainable trend from here on. With that I would pass on the baton to Vivek to cover the financial performance and then we’ll leave the floor open for questions after that.
Vivek Mathur — Chief Financial Officer
Thank you. Srikanth. On the overall revenue performance, as Srikanth talked about that, we have grown 30% year on year and Q4 last year versus this year we have grown about 24% sequentially. There is a degrowth of 2.5% largely driven by the mark to market correction that happened and some bit of corporate actions in issued solutions which had, you know, given a reduction of 3% in the issue solutions revenue sequentially but overall a robust performance. We have crossed thousand crores in terms of revenue. The breakup of revenue is more like mutual fund fee based revenue continues to be in the range of about 64%.
The issuer solutions revenue is 15% of total revenue. The international and other industrial solutions revenue is about 14% of total revenue within that now the international business is about, you know, continues to be about in the range of about 5 to 6%. And we believe that, you know the trajectory in terms of international business contribution will change with the acquisition of which currently is about 5,6% will move towards 15% in future. 13 to 15% in future with the acquisition of Ascent. And overall the EBITDA has gone up, you know, by 30.7% year on year. And same quarter last year versus this year is about 17% increase.
There is some impact of mark to, you know, the M and A due diligence cost of about 12 crores that we incurred during the year which has, you know, reduced the EBITDA. Otherwise it would have been about 31 and a half, you know, in terms of the margins. So in terms of the growth and the EBITDA margins which are 43.9% for the year would have been about 45% for the year. But for this 12 crore that we had to incur to do a due diligence and for the quarter which is 43.2% would have been about 46%.
So you know, you are saying you’re looking at the operating leverage playing out and as a market supported us the margins have been pretty healthy. The pat margin has gone up to 35 point, you know, gone up by 35.2% year on year. And the PAT margin was 30.5% for the year. And sequentially also you know, in terms of against last quarter there is a jump of 253 bps year on year on the pat margins. Sorry, a tip of 253bps on the PAT margin because of the expenses that we incurred on due diligence. We remain healthy in terms of cash and cash equivalents at 660 crores of cash which will be utilized towards payout of dividend that the board has recommended subject to shareholders approval of 7 rupees 50 visa per share.
And you know, the acquisition of, you know, the initial 51%, about 305 crores will also be funded out of it. We continue to convert EBITDA to free cash flow at about 60% while we continue to invest for future and capital expenditure to develop new products. We have seen a healthy increase in EPS, you know, about 34% increase versus last year. And we believe that in times to come with the acquisition of Ascent, at least for FY26 it will be neutral. And from FY27 we believe it will be value accretive. We are happy to take questions now.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star N1 on their touchstone telephone. If you wish to withdraw yourself from the question cue, you may press N2. Participants are requested to use handset 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 Chellappa from Indus Capital Advisors. Please go ahead.
Kartik Chellappa
Yeah, thank you very much for the opportunity. Sir, congrats on the quarter. Am I audible?
Sreekanth Nadella
Yes, Karthik, please.
Kartik Chellappa
Okay, great. Thank you. Just two questions from my side. First is on the other expenses, apart from the due diligence, was there any other chunky expenses in this quarter? Because the Y on Y growth seems to be pretty high. And if we could further break down what portion of the other expenses would you attribute to investing in growth versus maintenance? That’s my first question. Yeah, I’ll take this question. You know, there are expenses related to, you know, cloud expenses and licenses that we have incurred in terms of expansion and balancing strategy between On Prem to Cloud which is a similar increase, about 1213 crore extra that we have incurred to ramp up in terms of IT strategy.
We are looking at optimizing the cloud strategy with On Prem and this is something which we are developing the entire chassis, the core chassis based on the latest technology. And you know, overall we believe that 19% of the total revenue that we have spent on it in the current year, these are this 21% last year will continue to come down in the coming years. Got it. Excellent. My second question sir is if I were to look at our issuer solution that has actually seen increasing momentum at least in the last two to three quarters purely from a corporate client addition point of view, in your opinion, what is driving the strength and is this something that we can expect to sustain in FY26.
Sreekanth Nadella
Thanks Karthik. Yes, I do believe that so the issuer solutions as a business a couple of things that are happening obviously tailwinds in the form of the new IPOs. The number of companies that are going public is always helpful and I just want to caution that the company going to public does not give any sporadic jump of revenue. For K FinTech given the IPO revenue itself is very little. It is the annuity revenue that still matters. So winning the IPO mandates will actually improve our run rate year after year. So definitely the number of IPOs is definitely a factor that bears well on it.
Second, our commercial model of course is number of folios into unit pricing, portfolio and expansion of demat accounts. And the regional participation always helps which is what we saw in the previous year and I’m hoping it will continue for the foreseeable future. By any stretch of the imagination the retail participation in India is like most things are still under penetrated. I think they will continue to grow. 3. Corporate actions I think a plethora of corporate actions but many of corporate always helps. In terms of the activity that we do. There have been large scale corporate actions such as the demergers that we have handled say for example for Vedanta and so on and so forth and these are all important activities including ITC hotels demerger that cave in tech had orchestrated.
So that always helps us. And lastly I think we have also been focusing on transitions. Transition mutual funds is seldom there but transitions in corporate registry as a business issue, solutions as a business is possible and given we have always been the largest in this space and with our technological capabilities they have significant value to be added to many an incumbent. So we have also been successful in transitioning many corporates from other RTA’s into K FinTech. So broadly these are the reasons and these are all sustainable reasons. I do not see these to be a one time clip.
In fact issuer solutions. If you see even the previous year and the year before to that have seen up north of 20% growth we would continue to drive attention to this and then see if we can even expand it much faster given there are potential opportunities in terms of value added solutions in this line of business. One of the things that I can call out is say, for example investor relations. The entire IR as a portfolio of every corporate is still done in a very non industrialized manner and we are working on cutting edge solutions which will alter the ways of working for the IR as a function.
Now with an 8,000 client roster, even if you convert 10, 15, 20% of them. Into each of these solutions they will tend to add that delta of 400, 500 basis points of growth that is possible.
Kartik Chellappa
Excellent. That’s it from my side. Thank you very much and wish the team all the very best for next year.
Kartik Chellappa
Thank you Patrick.
operator
Thank you. The next question is from the line of Supratim Ratta from Ambed. Please go ahead.
Supratim Datta
Thanks for the opportunity. My first question is on the TRA business. What is the update there? Are you planning to launch that? And a connected question to that is Keyfin has, you know, moved into different, you know, lines or you know, different categories, different products, wealth being one, you’re talking about, you know, how you’re expanding value added services on the issuer solution side. That being other globally we have seen that RTAs or you know, platforms like KFIN are able to get into non financial categories as well like healthcare or others. Is that an ambition for Cayfin as well? And you know, what are the other blank spaces that you could look at filling with the current, you know, platforms and systems that you have? You know, if you could help us understand that, that would be very helpful.
Two, I want you to understand, you know, is the cost associated with the M and a, that’s around 12 crore, is that done or is some part of that cost going to come in FY26 as well? And lastly on the ESOP side there has been a new ESOP crunch due to which the cost on the ESOP side has gone up this year. How should we think about ESOP costs going into FY26? If you could help on that. Those are my three questions. Thank you.
Sreekanth Nadella
Sure. The first question in terms of KRA business, so we have in the previous quarter updated that we received in principle approval from SEBI in the KRA business. We have completed our platform build at this point in time. We are awaiting sebi’s final approval. Our readiness at this very moment is we are literally a minute away from launching our KRA solutions the moment we get approval from the regulator. So our preparedness is absolutely done and we believe it’s a matter of time and hopefully into the quarter we should have started our KRA business. Related to that is in terms of your question about how the value added solutions can actually permeate beyond the financial services industry.
We are not purposefully working in that model. Should however, the solutions that we are creating find resonance in other industries, we are happy to consider them in terms of extending those opportunities. Let me give you few potential possibilities. I think first and foremost we at the very minimum need to exhaust the financial services, the BFSI sector itself before even going that far. As you all know we are nearly entirely only on the financial services and that too within only asset management. We do not have a play in insurance or banking and NBA, so on and so forth.
There are solutions that we have created however which have, you know, which are fungible and which have relevance in a non asset management industry. For example, we have created what I’d like to believe is one of the best anti money laundering monitoring platform in the country. It’s called inpro. And whether you are an insurance company, whether you’re a bank or an nbfc, anyone who onboards any customer needs to do these kind of screenings. And our platform is definitely as applicable to any of these companies as much as it is to asset management industry. And it is applicable to any country in the world as much as it’s applicable to India.
Because these are all global lists so to speak. Similarly there are the API as an economy extends well beyond from asset management industry to various other industries. So to that extent we’re already looking into non bfsi, sorry non amc but within BFSI beyond that I do not believe we have any special interest at this point in time. And as I said if there is a resonance of any of our solutions for other industries we will definitely consider those in terms of the M and a cost for the afs. All the costs have been booked into the quarter that had gone by so that is fine.
I think the other one is in terms of ESOPs. ESOPs were given the previous year. I’d expect some ESOPs to be given this year as well. To a certain extent it is probably wise to factor in certain amount of ESOPs to be given. We are in a knowledge industry as you all know. It’s an asset light model. We don’t have plants and machinery. Our assets are our people. Attracting, retaining talent is probably one of the most critical job as the leader of your organization organization or my leadership team have. So to that extent you know it is also not just as a retention tool but also it is our responsibility in terms of wealth creation for the people who are directly responsible for the wealth creation of the broader shareholder community.
Kartik Chellappa
Thank you.
operator
Thank you. The next question is from the line of Abhijit from Kotak securities. Please go ahead.
Abhijit Akella
Hi, good morning everyone. I have a couple of number questions. First is if you could break down the international alternatives pension bit into the sub segments. Second one is that in the balance sheet I see a non Current asset held for sale item which is about, it’s not a big number but just curious what that relates to. And third one is a broader question which is on the international side and the alternative side if it’s possible to quantify the sales pipeline. And then secondly again I think it’s been discussed earlier as well but if you could you know talk about the, the competitive environment in those markets in terms of you know, who are the other players you’re competing with and you know how, how important is you know pricing in those deal wins.
That’ll be all, thank you.
Vivek Mathur
Sure. Srikanth, I’ll pick up the first one on the breakup of the international other industrial solutions. The balance sheet item. I’ll take the last one. Thank you.
Sreekanth Nadella
Yeah, the balance sheet. So the you know the international business, you know the breakup for the international piece within the overall pie is about you know FY24 was 119 crores and this year is about 156 crores. And that is international is about 48 crores and AIF is about 58 crores. Web IL is about 12 crores, NPS is about 11 crores and GBS is 27 crores. Same thing last year was international was 36 crores, AIF was 34 crores, Rebile was 5 crores, NPS was 8 crores and GVS was 34 crores. On the question on the you know the balance sheet item held for sale it is basically the asset which has been generated which will be transferred to the MF central GV that we have formed.
So as and when the investment is, you know, they get the license, EOP license, the asset needs to be transferred to them. That is why it is shown in the balance sheet as a held for sale. Over to you Shrikant.
Vivek Mathur
Thank you. The international business in terms of the landscape of the competition it’s going to be horses for courses. In terms of whether if you’re competing in mutual fund space we you know and it varies by the country of course is broadly, you know, if you talk about Malaysia we truly do not have a like to like competitor who delivers end to end, you know solutions like how we do it in India for example we end up competing with in house and the captive so to speak. There are few exceptions where bank based administrators say NHSB or a stanch chart by virtue of them being the custodian and fund accountant as I keep saying grudgingly deliver transfer agency services as well.
But broadly it is probably competition is largely with the captives and Same is the case in the Philippines market as well. But when you look at the private mandates, of course the competition is a little bit more again depending upon the. But if you see countries like Singapore and Hong Kong and even much of the west for that matter, you know, whether it is the offshore locations of Cayman and what have you, large international global fund administrators will be there, we compete with them. Apex Group could be one such one. SSNC Global IQ eq. Right.
And these are the firms and some of those firms actually are there in Gibbsity also if you see today. So on the private minded space we compete with them. So whether it is AFS competing with them or Cape Intec competing with them in Gibb City. How much is pricing an important factor? It is important, no doubt about it. But I won’t necessarily say that is the most important. I think in a private mandate space, unlike in the case of a public mandate space, transitions are possible because the lineage of the funds won’t be very large.
The number of investors won’t be very large. The, the history isn’t as significant as in the case of mutual funds. Given the transitions are possible, a good number of the cases it happens is largely because of the service standards go to market. Many of these fund houses tend to launch schemes rather quickly. There are fund houses who can launch schemes literally every month, every two months, every three months. And it is how nimble is your admin to be able to make sure they go live as well in terms of whether setting it up, the back end systems or if you’re managing the LP and the GP portals, how quickly are you able to bring them up? What is your capability in terms of advising them on the IMS itself and securing the right kind of licenses? A lot of advisory, quasi advisory functions are also delivered in that space.
Yes, pricing is important, but several other factors are even more important in the private space. So both AFS and KFIN compete with a different set of competitors depending upon which market we deal with.
Abhijit Akella
Thank you so much.
operator
Thank you. Before we take the next question, we would like to remind participants that you may press Star and one to ask a question. The next question is from the line of Sartak from Iraya Capital. Please go ahead.
Sarthak Nautiyal
Yes, sir.
operator
Hello, Mr. Sak, your line has been unmuted. Please go ahead.
Sarthak Nautiyal
Hello.
Sreekanth Nadella
Yes, we can.
Sarthak Nautiyal
Yes, thank you for the opportunity of us, sir. So basically you and Camps are continuously investing a lot in the, in the technology space, right? So how your technology, how your technologies can be different from cams.
Sreekanth Nadella
So there are areas where we Compete there are areas we collaborate. For example, we collaborate on MF Central, we compete with each other on mutual funds and alternatives. But as you know K Fintech also is in other businesses, you know, and likewise Camps is also in business as we’re getting. Fintech isn’t technologically one. We both use different tech stack altogether we are on Microsoft and if my knowledge serves me right, I believe Gams is on Oracle. In terms of, you know, operating model, it could be slightly different. It’s not right for me to comment, you know how they operate.
I mean I only have as much insights into it. What I can tell you about surely is that you know, K Fintech prides itself as a tech first company first and foremost. Second, we constantly have, you know, run and changing the bus which means that, you know, we have large businesses where we constantly have to, you know, run. We know as the scale increases, complexity increases, regulation increases, but we also need to have mechanism to forward investors and completely re platform. And that is exactly where our investments I’d like to believe are far higher. If you see our spend of tech as a percentage of revenue which is a parameter we track to five years back it used to be about 7 to 8%.
The year that had gone by, it has risen to almost 23 to 24%. So that means on a revenue that has expanded from nearly 350 crores to nearly 1200 crores. In a matter of our share of spend on tech also has moved from 8% of the 300 crores to now 24% of the 1200 crores revenue that we’re talking about. And a lot of this is to modernize, keep ourselves future ready. We believe that the volume expansion will probably even outpace the expansion of the AUM in times to come. And the cyber security related aspects are expanded extremely important for the nature of the work we perform.
As you could imagine, nearly 8 out of 10 financial investors, any financial investor in the country, 8 out of 10 is served by K Fintech in one capacity or the other. Because you are a shareholder in a company, you probably are receiving your dividends computed by us. You are a mutual fund investor, you are an alternative fund investor, you are a national pension system investor, so on and so forth. So with that level of complexity can also add the responsibility in terms of our spend in the direction we have always been pretty nimble in terms of the value added solutions.
I’ve called that out already, the growth because we do not want to look at any function within the company as a pure cost center. We have been successful in converting most of our internal functions into revenue centers and technology is no different. So not only do we spend enough on tech, we are also converting repurposing the solutions we are creating for in house as a solution that is also relevant to other companies and hence we are able to generate certain revenue outside of it. The other important factor I will call out is our data and cloud journey.
I think we have definitely been the first and the foremost probably across the capital markets in India to have adopted a complete cloud and data migration strategy. As early as 2019, 2020 we have successfully completed our migration AWS and it is not just about for the sake of migrating data, but it’s about your ability to create business solutions and value based on that ability to crunch petabytes of data in a few seconds and help our clients grow. And that is where many of our platforms like Digix or Paras, which are adopted by Sebi to many of our data engineering solutions adopted by many of our clients and the distributors.
So these are the differentiators as an rta we are able to provide to our clients so that they can grow at a much faster rate compared to the rest of the industry. So that’s largely about us and we continue to invest on new age tech. I spoke about AI. We are drafting a corporate level policy on adoption of AI. It’s a buzzword, everybody uses it, but you will see the real world use cases. I’ll give you one example. On the data that we crunch from the cloud, the status reports that we are creating that goes out to the industry is entirely written by AI.
So we do not use any human being to actually generate those reports at all. So that means comprehending natural language processing, taking the data, providing the insights systematically by the platform itself is you know, one such, is one such, you know, aspect of it. And I’d like to believe there’s much more to come into coming weeks and months.
Sarthak Nautiyal
Okay sir, I understand. Sir, I have a follow up question like we have been investing a lot in the technology technology stack so just wanted to know one thing why we have not win any contract from the last mutual fund that have launched Last eight mutual fund, we have just won one one. So what could be the possible reason for that?
Sreekanth Nadella
There will be multiple reasons for wins and losses. We have won 10 out of 10 mutual fund houses before the few losses that we have had in the previous few years and we had signed up with one of the marquee mutual fund houses just in the last quarter. We have already made that announcement and beyond the point. We have to win deals which make commercial sense. Winning for the sake of winning makes no value at all for us. And when we won all the wins that we’ve had obviously there is a response from the market.
And that response eventually meant that it’s because of the severe undercutting on the prices. We did not find some of those deals accretive in terms of business. End of the day I have a responsibility to my shareholder to drive a profitable and a meaningful business. So it is sometimes important to lose the trees for the goods.
Sarthak Nautiyal
Okay. Also sir, I’ve seen that one of our mutual fund has shifted from Case into camps. So what is the reason? And is there any issues in the loyalty barrier in the favor of CAMS?
Sreekanth Nadella
So there were 10 mutual funds that have shifted from CAMS to Cafe Fin over the last 15 years. I hope you’re tracking to that. The fund house that has shifted from CAFIN to cams, you know, is a fund house which has an aum less than few hundreds of crores. And I think the affiliation was largely in the context of some of the key management personnel who joined that entity belonged to CAMPS back in the day. So they just wanted to work back with the organization they were electing. They left earlier.
Sarthak Nautiyal
Sir, just wanted to know the last as you have told.
operator
I’m Sorry to interrupt, Mrs. Arthur. Could you please come back in the queue for further questions. Thank you. The next question is from the line of Pranuj from JP Morgan. Please go ahead.
Pranuj Shah
Hi. Thank you. Just three questions. One, is any mutual fund contracts that are for renegotiation FY26 that we should watch out for. Second, I think there was a previous question on their international deal pipeline. I’m not sure if it disclosed that. So the deal pipeline for yourselves and for accent if you can disclose that. And lastly the 12cr m and expense. Was it all in 4q or was it distributed between 3q and 4q? Thank you. If I answer the last question then Shrikant, you can answer the first two. The M&A expense is broken up into two quarters.
Q3 and Q4. Yeah. Shrikha. Sorry, what is the quantum the deal?
Sreekanth Nadella
Let me answer that. Sorry, I missed that one. Our K Fintech’s deal pipeline in Southeast Asia is close to about $25 million at this point in time. And the conversion rate if you saw in the last six months had been pretty solid. With nearly seven large deals to have been signed. And that number of 25 mil is consistently increasing. I have not included the Thailand market In that number just yet given, we have gone live and we are in the process of now looking at nearly the entire market and to add that to the pipeline.
So the pipeline of 45mil is broadly amongst the countries of Malaysia, Philippines, Singapore and Hong Kong, excluding Thailand. And I will be able to add that number shortly. Sorry, what was the other question?
Pranuj Shah
Also on Accent Steel Pipeline, if you can disclose at this point in time and also any mutual fund contacts that are for negotiation in FY26, we should be aware of.
Sreekanth Nadella
So it’s Ascent Fund Services. First of all, you’re not accident. So Ascent, the overall pipeline, you know, their pipeline is larger in the context of multiple geographies that they are present in 18 different countries. And of course we are still in the early stages of integration in terms of understanding the financial, et cetera. Very well. We just signed the definitive agreement. It is not right for me to comment just yet. Into the coming quarter, as we spend more time with the organization, we will be able to give you the pipeline. But broadly it is larger than our international pipeline at this point in time and continues to expand fast.
In terms of the contracts up for renegotiation. Yes, there are about two AMC contracts up for renegotiation this year.
Pranuj Shah
Okay, understood. Would it be possible to give the size of those AMCs?
Sreekanth Nadella
One is a large AMC, one is a mid tiered AMC.
Pranuj Shah
Okay, got it. Thank you, Shikant.
operator
Thank you. The next question is from the line of Dipanjan Ghosh from Citi. Please go ahead.
Dipanjan Ghosh
Hello. Good morning. Hope I’m audible.
Sreekanth Nadella
Yes, you are. Hi Path.
Dipanjan Ghosh
So just a few questions. First, you know, on the employee expense growth number for FY 2025, would it be possible for you to kind of break this number between fixed cost inflation, new employee additions and maybe others in terms of more deployment on the sales side or business development side or product side? Second would be, you know, when we look at the issue solutions business this year, obviously the folio growth has been quite strong. So again, I mean if you can break it up between primary activities driving this folio addition versus more companies that you’re getting from competition and maybe others.
The third is on the domestic alternates. And this is more qualitative. You know, is the entire portion of the revenue annuity in nature or is there some portion which is more transactional based? And lastly, in response to the previous participants question, when you mentioned the deal pipeline or your proprietary deal pipeline on the international side, was it in terms of AUM or revenue? I would.
Sreekanth Nadella
I’ll cover and I Sincerely request everyone to limit a few questions. Vivek, you can cover the item on the cost. The issuer solutions the total folio addition in the previous year was 9 million folios, which is pretty robust. And I think with the exception of one specific transition, nearly all of it is organic, which means that it is all the folios that have been added for the companies we have been servicing for the past bunch of years. The IPOs that have happened, obviously they happened through the years. So the full annuity value of it only will come into 2026 this year.
That is so to that extent a broad component of the revenue is from folio. Last year I think the total revenue coming from the folio maintenance was close to about 45% and the corporate activity actions was close to about 35%. The rest of it is corporate events like, you know, conducting AGM and E voting, so on and so forth on the deal pipeline. It is revenue, not aum because the AUM usually runs into billions of dollars for the basis points we charge. So the $25 million that I was talking about is purely the revenue potential, not the aum.
There was a question on alternate investment funds in aif. Usually there is no episodical one time revenue at all. So this is purely annuity. In fact you will always see a lag of revenue because it usually takes months, two, three months for a fund house when it launches and onboards an RTA for us to set ourselves, keep ourselves operationally ready for them to go live and then they get the funds. It’s only after that the AUM actually has been factored do we get revenue. So there is no one time revenue. If anything you will actually have a little bit of cost that we would have incurred before the revenue hits at this point in time.
Vivek Mathur
The employee cost, you know, the largely the increase in headcount is more to take care of the volume of transactions that have increased in domestic mutual fund, number of funds that have increased in alternate business and a number of new clients in the issue solutions business. And the growth that we are witnessing in Revile and Hexagram to a lesser extent, you know we also have ESOP cost of about 11.3 crores which was incurred as an addition to what was incurred last year. And next year again you will see an increase in the ESOP cost because more applies will get covered in a new scheme which was launched.
New brands will come in and we do expect, you know, around anywhere around 18 to 20 crores of ESOP expenses to come in the next year. So it’s more volume driven. While the volumes have gone up by 33% year on year, the increase in, you know, the number of employees has been marginal of about 5 to 7%.
Dipanjan Ghosh
Got it. Thank you all and all the best.
Sreekanth Nadella
Thank you.
operator
Thank you. The next question is from the line of Sanket Goda from Evan Des Path. Please go ahead.
Sanketh Godha
Yeah, thank you for the opportunity. So a couple of questions. Basically as the ascent gets integrated with us in large part of the current year and maybe fully for the next year. So is it fair to say that given the EBITDA margins of that company are lower to start with. So our EBITDA margins, which are closer to 44, will fall below 40 for a while before it inches back to 44 kind of a number. Is it a fair assessment to do so? Hello?
Sreekanth Nadella
Yes, mathematically absolutely yes it will. I mean but again keep in the context, the total revenue profile is about 18, roughly $18 million. And you know, K Fintech’s total revenue into the coming year obviously is going to be much, much higher. So the impact will be marginal at a percentage level but at an absolute number level it won’t be diluted.
Sanketh Godha
Got it. And you said the couple of mutual funds will come for repricing this. Just wanted to understand if I calculate that the yield came for the full year around 3.63, so you see a contraction to be much higher, meaningfully higher or it will be naturally a telescopic pricing impact to play out in MF.
Sreekanth Nadella
Sanket early to predict that is obviously a negotiation and a discussion. And as we engage with our clients into this year, we will be able to have a better understanding. But nevertheless, you know, you’re talking about 1, 2AMC zone, a base of 27AMCs and their AUM versus the total AUM and the amount of, you know, any amount of discounts that can go into there can be some compression. But I wouldn’t anticipate it to be, you know, much.
Sanketh Godha
Okay, got IT. And last one. See in company RTA business means if I look at last two years history 23 and 24, your revenue portfolio was around 10 point to 10.3 rupees. It has meaningfully fallen to 9.4. It’s almost like 8, 9% depletion in the realization portfolio. So just wanted to understand this. 9.4 is a new normal or because your IPO activities were little more and therefore the revenue portfolio looks optically lower and it might improve in 2016 with IPO activities coming down.
Sreekanth Nadella
I think it’s a combination of all. Definitely your observation about a lot of IPOs happening in the year, which means the folio is counted but the revenue is not counted for the full year. Obviously mathematically it will look and it will appear to dilute the revenue portfolio that is definitely the first offer. Second, the growth of which company and which folio is clearly not in our hands. And we have clearly negotiated contracts where the unit pricing varies by the client that we deal with. So today if a company X has a much larger retail participation because the company has done well, its share price is doing well, a lot of investors are buying that share versus some other company’s share.
And depending upon the unit price of both of them, obviously there will always be a certain amount of fluctuation that will happen. So broadly it will be a combination of market forces. It will be definitely the number of. There are a lot of IPOs. Optically it will appear as if there’s been a little bit of reduction. But this is not a business where discounts, etc. Are discussed. And if anything there is actually contract price revision, upward revision that happens for a select set of companies. So broadly, I do not anticipate this to be any structural reduction in the folio pricing.
Sanketh Godha
Got it. And last one, Hexagram revenue can you call out and how much it contributes to global and aif?
Sreekanth Nadella
See, it’s very tough to look at it that way because Hexagrams value transcends beyond the revenue that are booked in the Hexagram’s books itself. As I said, we created an entire Empower wealth as a business line within a matter of few months. It’s already about 20 crore business for us and the alternate investment funds. For example, the revenue that you see there, unlike in the case of mutual funds, we do both transfer agency and fund accounting for AIFs. Now fund accounting as a solution is rendered on top of Empower, which is a Hexagrams platform. But the revenue continues to be booked in the business line of aif, so to speak.
So those are the tactical reasons. But broadly it had been an extremely strategic acquisition for us and absolutely the one that’s helping us fuel our global aspirations.
Sanketh Godha
Got it. And maybe last on the mortgage business means the global business services. This 27 crore revenue for the full year means any investments, any revival in that business or you see the demand coming off and then this revenue ca declining trend as we have seen in last two, three years.
Sreekanth Nadella
So we have formally and it’s a position both from the management and our board to not to invest time, effort, monies in that business. As we all knew from the beginning, it’s an outlier. It is not an asset management business. It was a business that we have created at the behest of our erstwhile joint venture partner, Computer Share. We created a center of excellence for them and we’re delivering some revenues in the form of in the style of bpo. If I may. Now, in the context of our strategy of being a global fund administrator, it does not feature the list of things that we want to do.
So consequently, and also I guess this also coincided with in general mortgage as a line of business in the US coming down quite dramatically over the years. So we are not interested to scale up this business. We will continue to run whatever is left of it, but you will not see us spending any time effort either organically or inorganically into this business.
Sanketh Godha
Any plans to sell it off?
Sreekanth Nadella
Well, as I said, there isn’t too much of proprietary in it. It’s just a BPO style work. We use clients, platforms and we use our people. So if we do get an opportunity, we’ll think about it. But broadly you will see this business naturally scaling down over a period of time.
Sanketh Godha
Got it. Perfect. Thanks. That’s those.
operator
Thank you. The next question is from the line of Kishijit Saraf from Tusk Investments. Please go ahead.
Kishijit Saraf
Yeah, hi, good afternoon. Thanks for taking my question. I have just one question. On the BlackRock Aladdin platform you mentioned in the presentation that you have presence in Canada. U.S. is not mentioned yet. So just want to understand from a licensing perspective and a go to market perspective where are you as a company and would you require those licenses and would you go ahead and acquire for those licenses?
Sreekanth Nadella
Sure. So K. FinTech has clientele in Canada, right? And hence Canada is mentioned. US is not mentioned because we do not have any client in the US BlackRock of course is not our client. We are their preferred partner by virtue of formally getting onboarded by blackrock in the month of late January this year. We by virtue of being a partner preferred partner for BlackRock to implement Aladdin and Aladdin as things stack today has roughly about $20 trillion of global funds. Which means that we as one of the preferred partner has access to compete and win any of the fund managers who are currently on board Aladdin platform.
Over the past two and a half, three months we have been working with BlackRock to fully comprehend the capabilities of the platform Aladdin because it’s something that we need to know because we will be adding services and solutions layer on top of BlackRock, we will have to integrate the BlackRock platform with Empower platform because Empower is the back office platform, whereas Aladdin is the front office platform. So that integration work has been initiated. There’s a track on the go to market from the sales angle in terms of how to approach the sales, so on and so forth.
So this is a little complex process. You know, as we engage, as we fully comprehend, as we complete our integration on onto the platform, we will be creating our right to win solutions and then we’ll be approaching the market. It is probably a quarter to two away in terms of clocking revenues. But obviously it’s important to go that far to be able to understand because there, even the tiniest of conversion in terms of our clients can be a materially large contract for K FinTech. So it’s better invested to sharpen the eggs at this point in time and make sure that when we hit the market, you know, there is every reason for a fund manager to consider K Fintech as against anybody else.
You know, in terms of the solutions.
Kishijit Saraf
Right. And one out of less than 10 empanelmen on this platform. Any sense on the win rate that you can get in terms of the other platforms? Visa vu and how is the thought process there?
Sreekanth Nadella
I’m sorry, I’m not sure I understood the question. The line was also wasn’t very clear.
Kishijit Saraf
So you are one among the less than 10 empowerments on the Aladdin platform. So just wanted to understand. Yeah, so as 1 out of less than 10 of the impalments on Aladdin, just wanted to get a sense of what win rates you think you can get eventually or sort of, you know, any sort of aspiration you have there. Because the others would be also sort of looking for a share of that pie. What are you looking to differentiate with respect to Empower wealth or any of the offerings that you’re looking to build into this?
Sreekanth Nadella
Yeah. So the eight other administrators, I think the list is in the public domain. They include large entities like BNP, Paribas, Fund admins and MUFG and others. There are eight of them and all eight of them currently service this $20 trillion. So there is nobody else who does that. Right. And we could be the ninth one in the context, what is our right to win? As I said, we are in the process of integrating the systems and capturing the solutions. We believe that unlike many other fund administrators in that list, we have our own homegrown platform, which is Empower, which does an excellent job in terms of fund accounting capabilities.
We manage 3/4 of the insurance and 3/4 of the pension industry in India, 8 mutual fund clients, 5 of those are the clients of our competitors from TA, but we manage their fund accounting. And once we integrate these two solutions and in the context of the large big data solutions that we have, we believe that pricing can be a big first step in terms of making your presence felt in conjunction with go to market and the analytics around it. I know that analytics sound very, very cliched, but I can assure you in terms of how difficult it is for legacy companies to be able to deliver those as frugally as we can.
So it is largely superiority in terms of technology, fully integrated empower solution into Aladdin and a price point which should be compelling enough for a bunch of fund managers to cut over. And it is not necessarily that anybody needs to transition. As I said, almost all of these funds continue to launch new schemes and new fund managers are also onboarded. So this is an ongoing dialogue with the blackrock as a larger entity that we are having in terms of what is the right go to market strategy. And they have been extremely accommodative and graceful in guiding us into this process of go to market.
So we are working with the global sales organization of BlackRock to be able to get there.
Kishijit Saraf
Thank you. Congratulations. All the best.
operator
Thank you. The next question is from the line of Praise Jain from Motilal Oswal. Please go ahead.
Prayesh Jain
Yeah, hi, just a couple of questions, just extending the question on BlackRock of the previous participant. What is the kind of concentration today amongst the eight other players that you have mentioned and which is in the public domain? Is there a concentration wherein, you know, a couple of them have say 80, 80, 90% shares today and so it’s kind of difficult to entrench into that kind of a domain. That would be a first question. Second is on vas. The share has gone down sequentially in this quarter. Anything to read into it or is there a seasonality there or what? What kind of the will transpire there? And last question, you know, now that we have kind of filled in a lot of pockets with so many acquisitions and everything, do you think the next leg of growth could come from using your existing technology and skills to move to different adjacencies in the BFSI space like banking or some other aspects of the business which can help you grow organically more? Those would be my questions.
Thanks.
Sreekanth Nadella
Sure. On the blackrock, I do not believe there is any concentration risk. Many of them have large portfolios that they are managing the concentration Risk does not impact our ability to win. I think we need to keep in mind that these funds are not domiciled in any one country. And as a fund manager and as a fund administrator, let’s take any fund X, right? And if that fund is currently based in Cayman Islands, tomorrow they can start something in Ireland, they can start in Dubai, they can start Abu Dhabi, they can start in India, in gift cities, so on and so forth.
And as you move and set up funds in various different geographies, the fund administrator need to have the capabilities to be able to deliver to all types of funds in all the countries, which is where, you know, there is no one who is, you know, master of all, right, who understands every type of fund, every type of business process and every geography. And hence, even if there is a client who is probably a very large client of one of those fund administrators, eight other fund administrators, it is not necessary that the next fund launched by the same fund manager goes to the incumbent.
It is strongly possible that, say, for example, if it is in Gibbs City, we probably are best positioned as compared to the eight other fund administrators. So I do not one, there is no huge concentration risk. There are probably the top three who will have a bigger share, but there is meaningful share for all of them. And I do not necessarily believe that having a large market share with anyone, you know, precludes others from participation into that large pool of funds that is there. In terms of revenue sequential item, I think that’s absolutely, you know, there is no specific trend in it because these are not like annuity contracts.
So we win new contracts. So, for example, we would have won a good number of data engineering contracts of our clients and of our competitors clients in the previous quarter, and that revenue would have been booked there. And sometimes some of these contracts tend to have a slight spillover effect into the coming quarters. So I wouldn’t read too much into the sequential component of it, given it is not annualized or an annuity revenue as against contracts that we win and deliver. And then obviously we get on to the maintenance mode for us to have annuity revenue, but that would be at a smaller clip of about 20 or 25% of the total value, so to speak.
Prayesh Jain
And my last question on the adjacencies.
Sreekanth Nadella
I’m so sorry, but would you be able to repeat that again?
Prayesh Jain
Yeah. So what I was saying was, you know, whether the next leg of growth for CAFE would come from extending your existing skill sets and technology to other adjacencies in the BFSI space.
Sreekanth Nadella
I mean, can it Come from there. The answer is yes. But do we want it to be like that? The answer is no. I mean I think we are just literally scratching the surface of our global ambitions. Acquisition of Ascent and Empower, integrating it for global fund admin solutions and services is our north star. While continuing to grow in the overall India’s ecosystem. As you’ve seen, our market share, whether it is alternatives, whether it’s pensions, whether it is mutual funds has been rising quarter after quarter, year after year on the AUM and the number of funds and there are a lot of solutions that our country itself needs and warrants.
Now in addition to that, probably the only other item that we really want to be focused as management would be our international expansion to be anchored on the essence acquisition. We believe that our 100% of our time, effort and focus is needed will be needed for us to achieve these goals and ambitions. And we don’t believe digressing into say banking industry for example payment aggregation, some of our competitors get into that space or account aggregation and bunch of others we do not or insurance for that matter. They are subscale. They will never be able to offer the opportunity as the current strategy that we have chosen in terms of opportunities of growth for us.
So we will be focused in the narrow confines of asset management, wealth industry but drive lot of depth into business processes, lot of breadth and diversification into geographies.
Prayesh Jain
Thank you.
operator
Thank you ladies and gentlemen. Due to time constraint this was the last question for today’s conference call. I would now like to hand the conference over to Mr. Divesh for closing comments.
Divesh Agarwal
Thank you Steve. On behalf of IFL Capital, I thank the K Fin Management for giving us an opportunity to host the call today. Before we conclude the call, Vivek, would you like to add any closing remarks? Thanks Divesh. I think this was past year was a year which was filled with growth and getting into new businesses like KRA and getting into new geographies With Ascent coming in. We continue to maintain a guidance of 18 to 20% top line growth and 40 to 45% EBITDA margin. While we will see the integration of Ascend in the coming three, four months we believe that it will be, you know, neutral in terms of, you know, EBITDA margin impact and it will become accretive in FY27 and we will put all of our efforts in terms of making sure that the diversification is balanced from the management side in terms of the time and attention as we grow the international business with enhanced capabilities.
Thank you so much for joining the call today.
Sreekanth Nadella
Thank you.
Divesh Agarwal
Thank you, everyone, for joining in today. Steve, you may now conclude the call.
operator
Thank you. On behalf of KFEN Technology Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.