The financial services sector is transforming significantly, with CAMS (Computer Age Management Services) at the forefront. In a recent interview, Anuj Kumar from CAMS shared insights into the company's growth, expansion plans, and upcoming product launches, highlighting a robust outlook for the second half of the year.
Strong Retail Sentiment and SIP Growth
Retail investors have shown strong confidence, with SIP (Systematic Investment Plan) levels reaching record highs. Anuj Kumar noted that the business fundamentals remain strong, mirroring the growth trends seen in the last four to six quarters. CAMS has witnessed substantial participation from retail investors through SIPs, with monthly collections increasing by approximately 3 to 400 crores, surpassing 20,000 crores. The SIP count registered at CAMS is impressive, with nearly one lakh new registrations daily, totaling over 30 lakhs.
Market Share and Technological Investment
CAMS holds a dominant 75% share in net equity sales, a strong indicator of the overall asset direction. The company's investments in technology, talent, and risk compliance further bolster its growth prospects. Anuj Kumar expressed confidence in continued growth, contingent on market conditions.
Expansion into Payment Aggregation
The Reserve Bank of India's authorization for CAMS Pay as an online payment aggregator opens new avenues for the company. CAMS has traditionally focused on financial services, particularly mutual funds and brokerages, which constitute 50% of its business. The remaining 50% involves insurance companies and housing finance companies. Looking ahead, CAMS plans to expand into the education sector, leveraging its license to function as both a payment aggregator and gateway.
Non-MF Business Growth
The non-MF (non-mutual fund) segment of CAMS has shown remarkable growth, expanding by over 50% last year. Anuj Kumar anticipates a 30% growth in the non-MF segment this year, with potential to reach 40 to 50% in the next 18 months. The company's diversification efforts into capital markets, insurance, and other segments through initiatives like Think 360 are expected to yield significant revenue growth, potentially increasing by 50% from current levels in the non-MF business within 18 to 24 months.
Margin and Revenue Growth
CAMS aims to improve its margins and overall revenue. Currently, the company operates at a blended margin of 45%, with historical growth of 1% annually. Anuj Kumar expects this trend to continue for the next three to four years. The core business scaling and revenue growth in non-MF segments will drive this margin expansion. The anticipated top-line growth for the company this year is over 20%, with a long-term annual revenue growth target of 15 to 16% over the next four years.
New AMC Mandates and Gift City Expansion
CAMS successfully onboarded three new AMC (Asset Management Company) mandates in the previous fiscal year and continues to explore new opportunities. The company is also expanding its presence in Gift City, with plans to inaugurate a new office in August. CAMS currently services 17 Gift City clients and aims to double this count in the next 12 to 18 months.
In summary, CAMS is well-positioned for sustained growth, leveraging its strong market position, technological investments, and strategic expansion into new sectors. With robust plans for margin improvement and revenue growth, the company is set to capitalize on emerging opportunities in the financial services landscape.
