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CAMS in its FY24 annual report highlighted the use of innovative technologies to make its business processes seamless and deliver the best-in-class customer service in its mutual fund (MF) business, as well as non-MF businesses.

MF business (87% of revenues)

* In FY24, CAMS won all three new AMC mandates: Angel One, Torus Oro and Unifi Capital. It continues to be the partner of choice for 10 of the 15 largest MFs (based on AAUM).

* During the year, many NFOs were launched across CAMS-serviced funds including (162 schemes) and new MF folios touched 24m. CAMS has a 62% market share in new SIP registrations.

* CAMSPay crossed 1.4m UPI auto pay mandate registrations per month and is now a preferred payments partner. It recently launched the industry’s first Daily SIP, offering unparalleled flexibility in investment opportunities. It holds a more than 50% market share in the MF ecosystem.

* MF Central delivered over 0.13m CAS requests per day and now provides users with consolidated capital gain statement download feature.

* CAMS MF AUM stood at INR34.3t in FY24, up 33% YoY, with a 68% market share. Equity AUM stood at INR19.3t, up 49.4% YoY, outpacing the industry and capturing an additional market share.

Non-MF businesses (13% of revenues)

* AIF/PMS: CAMS is the first RTA in GIFT City to set up full-stack operations for AIFs. It added 32 new mandates in FY24, including four in GIFT City.

* Account Aggregation: CAMS has collaborated with Microsoft India to steer digital transformation in credit lending, investment advisory, and personal finance management.

* Insurance Repository: CAMS is building India’s first insurance portfolio management platform, Bima Central, for providing policy holder services, renewal reminders, policy downloads and several other compelling features. It has a 40% market share in this segment (based on the number of policies).

* Others: CAMS has made a strategic investment in Fintuple Technologies, which functions as an API-enabled gateway, connecting digitally savvy consumers to digitally enabled manufacturers and providers.

* The share of non-MF revenue grew 250bp YoY to 13.5% in FY24.

Strong financial performance with 110bp EBIDTA margin gain

* In FY24, revenue/PAT grew 17%/23% to INR11.4b/INR3.5b. EBIDTA rose 20% YoY to INR5b. EBIDTA margins stood at 44.4% vs. 43.3% in FY23. PAT margin grew to 30.9% vs. 29.3% in FY23. ROE improved to 41.3% vs. 39.8% in FY23.

* Valuation: While MF business will continue to see tailwinds from rising SIP investments, non-MF segments will gain scale on the back of investments made over the past couple of years. Revenue/EBIDTA/PAT are expected to witness a CAGR of 15%/19%/20% over FY24-26. We maintain our BUY rating with a TP of INR4,200, based on 40x on FY26E EPS.

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