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Result Highlights

* Revenue – Revenue at Rs.2bn was almost in line with our estimate. It was a growth of 14% on YoY basis and 7% on sequential basis. Asset based MF revenue was higher by 18.5% yoy, Non‐asset based MF revenue jumped 20.9% yoy, whereas non‐MF revenue was lower by 15.9% yoy (mainly owing to discontinuance of banking segment). Overall AAUM managed by CAMS was higher by 19.2% yoy whereas Equity AAUM was higher by 18.5% yoy.

* EBITDA ‐ EBITDA stood at Rs.891mn against our estimate of Rs.886mn. EBITDA margin stood at 45% against our estimate of 44%, expanding by 52bps on sequential basis and on yoy basis saw a slight dip of 86bps on back of lower operating expenses in corresponding period owing to onset of pandemic.  

* PAT – PAT came at Rs.602mn v/s our estimate of Rs631mn due to higher than expected tax rate and lower other income. PAT grew by 40% on yoy basis and 7% on sequential basis.

* Final Dividend ‐ Proposed a final dividend of Rs.11.84/‐ per equity share.

Our view:

Post the strong performance in Q4 FY21, we have upgraded our earnings estimates for FY22 and FY23 by 6% and 10% respectively. The upgrade has come from 1) higher than forecasted AUM in the past few months and 2) consistently higher EBIDTA margin in spite of a conservative commentary from the management. We are also raising our target multiple to 40x FY23E EPS to arrive at a fair value of Rs2,636. Maintain our BUY rating given the strength in franchise depicted by an expected 20%+ earnings CAGR, 40%+ RoE and 60%+ dividend payout.

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