Shares of a company in the finance sector surged 5.25 percent on Monday’s early trades to reach an intraday high of ₹ 2,593.95 apiece on the National Stock Exchange (NSE). This happened after the company’s meeting with investors and analysts. At 11:18 AM, its shares were trading at ₹ 2547.80 apiece.
Computer Age Management Services (CAMS) is a Mutual funds transfer agency. It provides investor services, distributor services and asset management companies (AMC) services.
69 percent market share of the Indian mutual industry’s assets are processed through CAMS. Its clients include HDFC Mutual Fund, ICICI Prudential Mutual Fund, Zerodha, PPFAS Mutual Fund, Kotak Mutual Fund, Angel One Mutual Fund, and SBI Mutual Fund among others.
The company’s management said that it has demonstrated stable revenue growth, sustainable margin expansion and consistent productivity improvements over the last five years. Its overall revenue grew at a CAGR of 9 percent from ₹ 6415 million in FY18 to ₹ 9718 million in FY23. Its PAT (profit after tax) has grown at 14 percent CAGR from ₹1,497 million to ₹ 2,853 million.
They added that the AAuM of CAMS Serviced funds has grown at a CAGR of 15 percent from ₹13.5 Tn to ₹27.3 Tn in the last 5 years. The management is looking to double down on digital committed investments to digital-first initiatives across their businesses. Moreover, the company is expanding into adjacent markets like alternative services, account aggregator, NPS and payment services.
With a market capitalization of ₹ 12,703 crores, CAMS is a small-cap company. It has a high return on equity of 44.32 percent and an ideal debt-to-equity ratio of 0.03. Its shares were trading at a price-to-earnings ratio (P/E) of 40.67, which is higher than the industry P/E of 30.08, indicating that the stock might be overvalued as compared to its peers.
Foreign institutions hold a 35.78 percent stake in it, followed by retail investors with 34.12 percent, promoters with 19.91 percent, domestic institutions with 6.50 percent and mutual funds with 3.69 percent.
Written by Simran Bafna
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