Buy CAMS; target of Rs 4600: Motilal Oswal

Motilal Oswal's research report on CAMS

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. Strong revenue growth resulted in EBITDA of INR1.7b (in-line), up 34% YoY, with EBITDA margin at 46.7% (vs 44.7% in 3QFY24 and our est. at 46.8%). Management guided for EBITDA margins at ~15% for the Non-MF segment. For 9MFY25, EBITDA rose 36% YoY to INR4.9b. CAMS reported a net profit of INR1.2b, up 40% YoY (in-line) in 3QFY25, driven by strong top-line growth across segments and better cost control. For 9MFY25, PAT rose 42% YoY to INR3.5b.

Outlook

We expect revenue/PAT to post a CAGR of 18%/23% over FY24-27E and reiterate a BUY rating on the stock with a one-year TP of INR4,600, premised at a P/E multiple of 38x on Sept’26E earnings.