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    Cams Services

    CAMSGood
    Financial Services·6 May 2025
    Management Summary

    CAMS delivered a strong full-year performance with 25% revenue growth, though Q4 saw a planned moderation due to a significant contract renegotiation. The company is successfully diversifying, with non-MF segments like CAMSPay and Insurance Repository showing high growth. Despite yield compression from the price reset, management remains confident in maintaining mid-40s margins through cost control and scale.

    Highlights

    7

    • Full year FY25 revenue grew by 25% YoY, with MF revenue up 25% and non-MF revenue up nearly 25%.

    • Q4 FY25 revenue growth moderated to just under 15% YoY, impacted by a major contract price reset.

    • FY25 EBITDA margin stood at 46%, while Q4 margin was 44.9% due to the pricing impact.

    • Non-MF revenue share increased to 13.7% in Q4, with CAMSPay revenue surging 85% YoY.

    • Market share by assets remained dominant at 68%, with 21 live AMCs and 5 more expected in the next 6 months.

    • Yield on AUM fell to 2.24 bps in Q4 from a higher base, with a further 0.09 bps drop expected in FY26.

    • Management guided for FY26 EBITDA margins of ~44% and non-MF revenue growth of 20-25%.

    Concerns

    1

    • Yield Compression from Contract Renegotiation

    Key financials

    Single quarter

    05 metrics
    1. 01Revenue₹356 Cr+14.8%YoY
    2. 02EBITDA Margin44.9%
    3. 03PAT₹110 Cr+10%YoY
    4. 04AUM Yield2.24 bps-4%YoY
    5. 05Non-MF Revenue Share13.7%

    Segment breakdown

    Mutual Fund (MF)
    15% Revenue Growth24% AUM Growth29.0% Equity AUM Growth
    Non-MF
    15.8% Revenue Growth85% CAMSPay Revenue Growth30% KRA Revenue Growth (FY)
    List

    Guidance & targets

    5
    CategoryTargetPriority
    Margin
    EBITDA Margin
    44%
    		Medium
    Revenue
    Non-MF Revenue Growth
    20-25%
    		High
    Capex
    Total Capex
    ₹170 crores
    		High
    Other
    Yield Compression
    7%
    		Medium
    Headcount
    Employee Cost as % of Revenue
    33%
    		High

    Risks & concerns

    5
    RiskSeverity

    Yield Compression from Contract Renegotiation

    A major contract reset caused a 4% yield drop in Q4, with another 50% of the impact expected in Q1/Q2 FY26. — Both acknowledged

    high

    Market Volatility Impacting SIPs and New Accounts

    Sustained pressure on indices from Sept to March led to moderation in new Demat/broking accounts and SIP triggers. — Management acknowledged

    medium

    High Capex Outlay

    ₹170 crore capex planned for FY26 for re-architecture and regulatory requirements (air gap centers) will impact cash flows. — Analyst acknowledged

    low

    Areas of Evasion(2)

    • Specific names of AMCs allegedly lost to competitors
    • Granular details of the commercial construct of the renegotiated contract

    Q&A highlights

    3

    “Most of the impact is there and the 50% is in this quarter, close to 50% will be there in the next quarter.”

    Clarifies that the margin pressure from the major contract reset is not a one-time hit but will linger through H1 FY26.

    asked by Swarnabha Mukherjee, B&K Securities

    2 min read5 chapters

    Detailed Narrative

    01

    Pricing Reset Impacts Q4 Performance

    CAMS experienced a moderation in revenue growth to just under 15% in Q4 FY25, primarily due to a major contract renegotiation. This reset resulted in a 4% drop in yield on a quarter-on-quarter basis, ending at 2.24 bps. Management noted that 50% of this pricing impact is now in the base, with the remaining 50% expected to flow through in the first two quarters of FY26. Despite this, the company maintained a resilient EBITDA margin of 44.9% for the quarter.

    02

    Non-MF Segments Drive Diversification

    The non-MF portfolio continues to be a high-growth engine, with revenue share reaching 13.7% in Q4. CAMSPay was a standout performer, growing 85% YoY, while the Insurance Repository segment saw its market share improve to over 40%. Management is targeting 20-25% growth for the non-MF business in FY26 and expects its EBITDA margin to improve from the current 10-15% range toward 20% as these businesses scale.

    03

    Mutual Fund Business Remains Robust Despite Headwinds

    The core MF business saw AUM growth of 24% YoY, mirroring industry trends. Equity assets were particularly strong, growing 29% and helping the company cross the ₹25 lakh crore mark in equity AUM. Live SIP accounts grew 18% to 5.7 crores, and gross new SIP registrations for the year surged by 51%. CAMS also added two marquee AMCs (Angel One and Unifi) to its live roster, bringing the total to 21.

    04

    Aggressive Technology Re-architecture and Capex

    CAMS is undertaking a significant technology re-architecture project, which will see accelerated spending in FY26. Total capex for the coming year is guided at ₹170 crores, comprising ₹100 crores for the re-architecture and ₹70 crores for regular BAU and regulatory requirements like air-gap data centers. While this will lead to higher depreciation in the long run, management believes it is essential for future-proofing the platform.

    05

    Conservative Outlook for FY26

    Management has adopted a conservative stance for FY26, assuming moderate AUM growth of 11-12% rather than the 20%+ seen in recent years. Based on this, they expect revenue growth in the high single digits to low teens for the MF segment. EBITDA margins are guided to settle around 44%, reflecting the full impact of yield compression and the cost of scaling new businesses.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.