Computer Age Management Services Ltd. share price target

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).

Computer Age Management Services (CAMS) remains one of the best plays on India’s financialisation story. The aggregate nature of its business gives the company a steady growth outlook.

CAMS reported inline revenue growth (17.6% YoY, while marginal dip of 2.8% QoQ) in Q1FY23, but EBITDA saw de-growth of 14% QoQ.

Computer Age Management Services (CAMS) remains one of the best plays on India’s financialisation story. The aggregate nature of its business gives the company a steady growth outlook.

CAMS, a leader in duopoly RTA market with 70% market share is trading at mouthwatering valuations. High entry barriers, stickiness of AMCs, strong growth in the underpenetrated mutual fund AUM and rising share of high yield equity segment from 38% to 50% by FY25E are some of the value drivers for the company. CAMS has posted robust Revenue/EBITDA/PAT growth of 9%/13%/18% CAGR respectively from FY18 to FY22 and it is further expected to clock Revenue/EBITDA/PAT growth of 16%/14%/13% respectively from FY23E to FY25E.

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