Computer Age Management Services Ltd. share price target

CAMS reported operating revenue of INR3.6b in 4QFY25 (7% beat), up 15% YoY. For FY25, operating revenue grew 25% YoY to ~INR14.2b. Total operating expenses grew 18% YoY to INR1.97b. Employee expenses/other expenses rose 12%/27% YoY to ~INR1.2b/INR790m.

CAMS reported operating revenue of INR3.7b in 3QFY25, up 28% YoY (in-line). For 9MFY25, operating revenue was up 29% YoY to ~INR10.7b.

CAMS reported operating revenue of INR3.6b in 2QFY25, up 33% YoY (6% beat).
For 1HFY25, it grew 30% YoY to ~INR7b.

CAMS held an analyst meet to present granular aspects of various business segments, outlining its key growth drivers and initiative to gain market share in non-mutual fund (MF) business segments.

CAMS reported a net profit of INR1.07b, up 41.3% YoY (in line with our estimate) in 1QFY25. Growth was driven by a YoY increase in the share of non-MF business and an improved mix of equity AUM in total MF AUM.

With an AUM market share of 68% in a two-player MF RTA market, Computer Age Management Services (CAMS) is a play on India’s growing asset management industry. CAMS derives 87% of revenue from the MF RTA business.

CAMS has showcased its business capabilities in all its segments in its recently held Analyst Day (on Sep 8). Strategically, the company underlined that significant thrust in ex-MF RTA segment is backed by a suite of capabilities, unique offerings and talented leadership, while the company’s pole position in MF RTA space has also manifested in quality new account wins.

CAMS posted in-line revenue at ? 261.3 Cr (up by 10.4% YoY) and the share of non-MF business in revenue rose to 12.6% in Q1FY24. We are bullish on CAMS due to Market leadership in the duopoly RTA market, four out of the five largest MFs as well as 10 of the 15 largest MFs based on AAUM are their clients.

CAMS reported a steady Q1FY24 performance with PAT of INR 757mn. While the quarterly PAT has remained range-bound at ~INR 730mn levels for past 8 quarters, there are multiple levers ahead for growth. These include: (1) relatively small incremental investments in new businesses (INR 180mn-200mn annual outgo already in the base); (2) improving margins of new businesses (currently at 25% levels).

CAMS posted in-line revenue at ? 249.2 Cr (up by 2.5% YoY) and the share of non-MF business in revenue rose to 11% in Q4FY23. We are bullish on CAMS due to Market leadership in the duopoly RTA market, four out of the five largest MFs as well as 10 of the 15 largest MFs based on AAUM are their clients.

CAMS has reported steady Q4FY23/FY23 result with PAT of Rs744mn/2.8bn, respectively. FY23 flattish earnings YoY is reflective of 7% growth in CAMS AAUM being offset by 13% YoY higher operating expenses.

We maintain BUY with a target price of Rs 3,365 based on 40x FY25E EPS of Rs 84.1 on the back of strong growth ahead of mutual fund AUM (AAUM went up Rs 40.8 Lakh Cr in Q3FY23). CAMS posted in-line revenue (+0.5% QoQ).

We see CAMS on track to deliver Rs2.8bn PAT in FY23 which will imply a 5-year CAGR of 14%. Our revenue/EBITDA/PAT CAGR estimate stands at 11%/9.6/11% between FY22- 25. The company is developing its non-MF business portfolio which is gradually gaining momentum through (1) AIF/PMS segment, (2) insurance repository and (3) account aggregator + TSP platform.

We maintain BUY with a target price of ? 3,400 based on 45x FY24E EPS of ? 75.6 on the back of strong growth ahead of mutual fund AUM (AAUM went up ? 39.6 Lakh Cr in
Q2FY23). CAMS posted in-line revenue (+2.4% QoQ).