CAMS Q2 FY27 CONCALL: TARGETS 20% NON-MF REVENUE SHARE, 25–30% NON-MF MARGINS IN 3 YEARS; EXPECTS 30% CAMSPAY GROWTH & 100–200 BPS ANNUAL MARGIN EXPANSION

• Non-MF Revenue Growth: Management expects non-mutual fund businesses to sustain 20%+ annual growth, supported by CAMSPay, KRA, alternatives and insurance-related services. • Non-MF Revenue Contribution: Management targets increasing non-MF revenue share to approximately 20% over the next couple of years, compared with around 16% currently. • Non-MF Margin Guidance: Management expects non-MF margins to reach 25%+ over the next three years, with an aspiration to approach 30%, compared with approximately 18–19% currently. • CAMSPay Growth Guidance: Management expects annual revenue growth of approximately 30% over the next two years, compared with more than 50% YoY growth in Q2. • CAMSPay Near-Term Outlook: Management indicated that 50% growth could continue for another 1–2 quarters before moderating toward 30%. • CAMSPay Profitability: Payment services margins remain around 20%, supported by recurring payments, card processing and operating leverage. • MF RTA Yield Guidance: Management maintained its expectation of approximately 3% annual yield compression, primarily due to scale-based pricing and changes in asset mix. • H2 FY27 Pricing Outlook: Management does not expect significant additional customer discounts or major pricing reductions during H2 FY27. • FY28 Contract Renewals: Management indicated that contracts with some large AMCs will come up for renewal in FY28, with the financial impact yet to be determined. • EBITDA Margin Outlook: Management expects enterprise EBITDA margins to expand by approximately 100–200 bps annually in normal growth conditions, supported by operating leverage and productivity improvements. • Operating Expense Guidance: Management aims to maintain annual expense growth below 10%, supported by automation, workforce optimization and technology upgrades. • Mutual Fund AUM: CAMS-serviced mutual fund average AUM increased approximately 12.5% YoY to ₹58.5 lakh Cr, with market share at around 67%. • Equity MF AUM: Equity average AUM increased 15.5% YoY, compared with industry growth of 15.2%. • SIP Collections: Gross SIP collections increased 16.5% YoY during Q2, compared with industry growth of 12.4%. • Equity Net Sales: CAMS-serviced AMCs accounted for more than 70% of industry equity net sales over the preceding year. • AMC Client Additions: InCred AMC appointed CAMS as its mutual fund RTA, taking the client base to 32 out of 64 licensed AMCs. • Specialized Investment Funds: Approximately 12 CAMS-serviced AMCs have launched SIFs, with combined AUM of around ₹20,000 Cr and an investor base approaching 1 lakh. • GIFT City Business: Retail fund AUM crossed ₹1,500 Cr, with another 2–3 fund launches expected during Q3 FY27. • CAMSPay Performance: Revenue increased more than 50% YoY and 13% QoQ, with the business contributing over 6% of consolidated revenue. • KRA Growth Outlook: Management expects continued growth through higher transaction volumes, new brokerage clients and increasing adoption of KYC services. • KRA Client Expansion: Five of India's top 10 brokerage houses are now active CAMS KRA customers. • Alternatives Business: Revenue increased approximately 22% YoY, with AUM crossing ₹3.3 lakh Cr, supported by more than 50 new mandates and 15 marquee relationships. • Insurance Repository: Company crossed approximately 1.5 Cr dematerialized insurance policies, with BIMA Central expanding its services through insurance intermediaries. • Insurance Growth Opportunity: Management sees potential long-term opportunities from greater digitalization of insurance services but has not provided a revenue target. • Account Aggregator Business: Revenue increased approximately 19%, supported by growing adoption of financial data and analytics solutions. • ConsenPro Expansion: Company is implementing its consent management platform with approximately 20 clients and sees potential to build a ₹20–30 Cr annual business over the next 2–3 years. • Technology Modernization: Approximately 30% of the overall platform rearchitecture programme has been completed, with further implementation expected to improve productivity and operating efficiency. • FundsNet 2.0: New RTA platform has gone live, while management plans to retire the legacy platform around March–April 2027. • AI & Automation: Management expects continued productivity improvements from automated form reading, transaction processing and AI-based operational tools. • Workforce Optimization: Employee headcount declined by approximately 250–300, reaching around 8,200 from 8,450 at the beginning of FY27. • Technology Cost Outlook: New platform expenses are expected to increase from approximately ₹5 Cr in Q2 to ₹8–10 Cr per quarter during Q3 and Q4, largely offset by productivity savings. • Net Technology Cost Impact: Management expects incremental quarterly operating expenses of approximately ₹1–2 Cr after accounting for efficiency improvements. • UPI MDR Opportunity: Management estimates that any future MDR implementation could add approximately ₹1–2 Cr in annual CAMSPay revenue at the current scale, with limited overall impact. • Q2 Revenue Performance: Operating revenue increased approximately 10% YoY to ₹415 Cr, crossing the ₹400 Cr quarterly milestone for the first time. • Q2 EBITDA Performance: EBITDA increased 13.5% YoY to approximately ₹191 Cr. • Q2 EBITDA Margin: Margin expanded 140 bps YoY to approximately 46%. • Q2 Profitability: Net profit increased approximately 14.5% YoY, supported by higher revenue, operating leverage and cost control. • Q2 Cost Performance: Operating expenses increased slightly more than 7% YoY despite approximately ₹8.5 Cr of annual employee increments recognized during the quarter. • Cash Position: Company reported approximately ₹900 Cr in cash and liquid balances after paying around ₹160 Cr in dividends during the quarter. • Interim Dividend: Board declared an interim dividend of ₹3.25 per share. • Key Challenges: Slower mutual fund AUM growth, annual RTA yield compression, large AMC contract renewals, increasing technology costs and execution of non-MF expansion remain important factors.

COMPUTER AGE MNGT SER LTD

← Back to feed