CAMS share price: Add IT age management services, target price Rs 2885 : HDFC Securities

HDFC Securities added a call for Computer Age Management Services with a target price of Rs 2885. The current market price of Computer Age Management Services is Rs 2354.5.

The period given by the analyst is the year in which the price of Computer Age Management Services Ltd. can achieve the set goal.

Computer Age Management Services Ltd., incorporated in 1988, is a small capitalization company (having a market capitalization of Rs 11728.03 Crore) operating in the financial services sector.

Major products/revenue segments of Computer Age Management Services Ltd. include other services for the year ending March 31, 2021.


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For the quarter ended 31-03-2022, the company reported consolidated total revenue of Rs 247.43 Crore, up 2.32% from last quarter, total revenue of Rs 241.83 Crore and up up 21.33% from the same quarter last year, total revenue of Rs 203.94 Crore. The company reported a net profit after tax of Rs 73.84 Crore last quarter.

Investment rationale
CAMS recorded online revenue (+2% QoQ, similar to other AMCs); however, higher administrative and operating expenses resulted in a 4% sequential decline in Base Revenue to INR 947 million. MF AAUM saw a 1pp decline in market share to 69% alongside continued compression in core income yields (albeit a milder compression compared to listed AMCs). RTA duopoly market leadership, high barriers to entry and high switching costs position CAMS favorably; however, the brokerage remains wary of continued price pressure on AMCs that will trickle down to RTAs in the short to medium term. It generates a 10/12% CAGR of FY22-24E revenue/operating profit, driven by buoyant capital flows and growing contribution from nascent businesses including payments, AIFs, ARCs and insurance. It values ​​CAMS at 42x Sep-23E EV/NOPLAT + Sep-22 cash and investments. It maintains ADD with a target price of INR 2,885; the stock is currently trading at FY23E/24E EV/NOPLAT of 37x/32x and P/E of 36x/32x.

Promoter/Fii Holdings
The promoters held 23.75% of the company’s capital as of December 31, 2021, while the FIIs held 30.43% and the DIIs 13.25%.

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