Computer Age Management Services Ltd - 48.4% ROCE
India’s largest registrar and transfer agent("RTA") of mutual funds.
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Company name - Computer Age Management Services Ltd
Last closing price(NSE:CAMS) - ₹4600.6 (as of 14-Oct-2024)
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Executive Summary
The company is a mutual funds transfer agency. It provides investor services, distributor services and asset management companies (AMC) services. It is India’s largest registrar and transfer agent(“RTA”) of mutual funds with an aggregate market share of 68%.
The debt-to-equity is low at 0.11 and the ROCE is very strong at 48.4%.
In the last quarter, the net profit increased by 40% and EPS increased by 41.2%.
Stock price chart
Detailed analysis
About the company
The company is a mutual funds transfer agency. It provides investor services, distributor services and asset management companies (AMC) services.
It is India’s largest registrar and transfer agent(“RTA”) of mutual funds with an aggregate market share of 68%.
Future prospects
What is the company’s plan to maintain earnings growth in future?
Diversification into Non-MF Segments: CAMS is expanding its revenue streams by focusing on non-mutual fund segments like Account Aggregator, CAMSPay (payment services), and AIF services. The goal is to increase non-MF revenue contribution to 20% in 3.5 years
Technology Upgradation: Partnership with Google Cloud to rebuild its RTA platform, aiming for enhanced efficiency and new business opportunities.
Strategic Partnerships: Expanding geographical presence in GIFT City and partnering with new financial institutions to grow its AIF and international business.
Potential risks that can hamper the future growth?
Regulatory Risks: Changes in SEBI or IRDA regulations can impact the company’s operations, especially in core segments.
Client Concentration: Reliance on a few large AMCs for substantial revenue could pose a risk if client relationships are disrupted.
Competition: Increasing competition from new fintech entrants could pressure margins and market share.
While non-MF revenue has grown, profitability from segments like insurance services remains limited. The ambitious platform rebuild also poses execution risk.
Financial analysis
Overview
The pledged percentage is 0%.
The debt-to-equity is low at 0.11 and the ROCE is very strong at 48.4%.
Quarterly results
Growth in key metrics in the latest quarter Q1 - 2025 compared to the last year’s same quarter -
The company has reported significant sales growth of 26.83%, and a consistent double-digit sales growth track record overall.
The operating profit increased by 36%, on account of increased sales and operating profit margins.
The net profit increased by 40% and EPS increased by 41.2%.
Annual results
Growth in key metrics in the last financial year 2024 compared to the previous financial year -
The company reported a sales growth of 16.95%, and operating profit growth of 19.95%.
The net profit increased by 23.15% and EPS increased by 23.6%.
Peer comparison
The nearest peer in the range is CDSL with a net profit of ₹419.55 Cr in the last 12 months, and market cap is higher by 33%. CAMS Ltd is currently at ₹350.98 Cr as last 12-month profits.
There is a potential for market cap to grow if CAMS Ltd is able to maintain its growth rate.
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Credits : Financial data source - screener.in