Buy CAMS; target of Rs 4600: Motilal Oswal

Motilal Oswal's research report on CAMS

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. Operating revenue reached INR3.3b, up 26.8% YoY, in line with our estimates. The continued strong growth in Non-MF businesses led to a 40bp YoY increase in their revenue contribution to 13.3% vs 12.6% in 1QFY24. The management is confident that CAMS WealthServ, CAMSPay, CAMSRep and Think360 would contribute sizable revenues in the coming quarters. It expects 20%+ growth in revenues from Non-MF businesses.
We broadly maintain our estimates and BUY rating on the stock with a 1-year target price of INR4,600 premised at a P/E multiple of 42x on FY26E earnings.

Outlook

We broadly maintain our estimates and BUY rating on the stock with a 1-year target price of INR4,600 premised at a P/E multiple of 42x on FY26E earnings.