Buy CAMS; target of Rs 2950: Motilal Oswal

Motilal Oswal's research report on CAMS

CAMS reported a net profit of INR838m, a growth of 16% YoY. PAT for the quarter came in line with our estimates. The growth in profitability was well supported by an increase in the share of non-MF business and improving the mix of equity AUM in the total MF AUM. The share of Non-MF business improved sequentially in 2QFY24 and is expected to continue increasing throughout FY24. Operating revenue reached INR2.75b, up 13.5% YoY and 5.3% QoQ, in line with our estimates. The management is confident that CAMS WealthServ, CAMSPay, CAMSRep, and Think360 will significantly boost revenues in the coming quarters. It expects a growth of over 20% in revenues for the Non-MF business.

Outlook

Currently, we have a BUY rating on the stock with a target price of INR2,950 at a P/E multiple of 35x on FY25 earnings.

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