With over 30 years of specialized knowledge and experience, CAMS stands as India's top and rapidly expanding Qualified Registrar and Transfer Agent (QRTA) for Mutual Funds (MFs). They cater to ten of the fifteen largest MFs by Average Assets Under Management (AAUM). CAMS is India’s largest registrar and transfer agent of AMCs with an aggregate market share of ~68% based on mutual fund AAUM managed by its clients and serviced by it. In Q3FY25, CAMS serviced Rs. 46.3 tn. Assets under Management (AuM). In Q3FY25 equity net inflows touched Rs. 97,000 cr. which is a staggering 89% increase on a YoY basis. Revenue experienced a CAGR of 17% from FY21 to FY24, primarily driven by an 18% CAGR in AUM. Looking ahead, we anticipate revenue to have ~14% CAGR over FY25E to FY27E, supported by an expected 19% CAGR in AUM. This projection accounts for potential yield compression due to anticipated pricing adjustments in the upcoming quarters.
OutlookThe penetration potential of the industry is high. Being the market leader, CAMS is all set to capitalize on this huge growth potential supported by a healthy balance sheet and return ratios. CAMS is currently trading at 36x (5 yr avg=40x), we value at 36x to arrive at a target price of Rs. 4,425, recommend Accumulate rating.
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