Computer Age Management Services Ltd., incorporated in 1988, is a small capitalization company (having a market capitalization of Rs 11999.93 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.
For the quarter ended 31-12-2021, the company reported consolidated total revenue of Rs 241.83 Crore, up 4.24% from last quarter, total revenue of Rs 231.98 Crore and up up 25.73% from the same quarter last year, total revenue of Rs 192.34 Crore. The company reported a net profit after tax of Rs 77.31 Crore last quarter.
CAMS saw online revenue (+4% QoQ, similar to other AMCs); however, contained administrative costs resulted in a 3% drop in base income to INR 981 million. While core yields continued to experience compression in line with industry trends (slightly lower yield compression than listed AMCs), non-asset based revenues showed strong growth on the back of increased trading and call center activity. RTA duopoly market leadership, high barriers to entry and high switching costs put CAMS in a uniquely advantageous position; however, we remain cautious of continued AMC pricing pressure that will trickle down to RTAs in the short to medium term. Brokerage Adjusts EPS Estimates Down 2/3% to Incorporate Higher Technology Spending for FY23-24E (as directed by Management) and Expects Revenue and CAGR FY21-24E operating profit of 16/22%, driven by strong equity flows and a rising contribution from nascent businesses, including payments, AIF and insurance. It values CAMS at 43x Sep-23E EV/NOPLAT + Sep-22 cash and investments. Given the stock’s sharp correction over the past few months, the brokerage is moving to ADD with a revised target price of INR 2,885 – the stock is currently trading at FY23E/24E EV/NOPLAT of 39.8x /34.9x and P/E of 38.8x/34.6x.
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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