Buy CAMS; target of Rs 2850: Motilal Oswal

Motilal Oswal's research report on Computer Age Management

CAMS organized an Analyst Day to share its in-depth insights on various industry-first solutions and fresh developments in the numerous business categories it operates in. CAMS is the leader (~69% share) in India’s MF registrar and transfer agent (RTA) industry. It earns ~90% of its revenue from MF business, while the remaining 10% from non-MF businesses such as AIF/PMS RTA, Insurance Repository, Camspay, Account Aggregator, and CRA for NPS. With structural tailwinds favoring the MF business and a favorable macro environment emerging for all non-MF businesses, we anticipate a robust business momentum in the foreseeable future. Each of the new businesses has the potential to generate ~INR 0.7-1b over the next three to four years.

Outlook

Currently, we have a BUY rating on the stock, with a target price of INR2,850 (a P/E multiple of 35x on FY25 earnings).