Here's a thread on Computer Age Management Systems Ltd or #CAMS

Business: 90% of revenue is derived by providing end-to-end value chain services to #mutualfunds
Listing Date: Oct 5, 2020
Listing Price: ~INR 1,400
CMP: ~1,800
Market Cap: ~INR 8,790 Cr
@investeek @AnupLamb (1/12)

#CAMS earns by charging a small % of AAUM of its #MutualFund clients (MFs) against processing data of investors from they buy units to the time they sell it. It also provides e-insurance service (e-interface to clients) to Insurance cos via its subsidiary (2/12)

4 in top 5, and 9 in top 16 #MFs of our country outsource their investor management operations to #CAMS. Clients include @hdfcmf, @ICICIPruMF, @BirlaSunlife_MF, @SBIMF, #DSP Investment Managers, @KotakMF, #FranklinTempleton Investments (3/12)

The company increased its share in #MF Service business from 61% to 70% in just 5 years. There are entry barriers in this business so it’s not easy for new comers to disrupt their business. (4/12)

The company has delivered a staggering Revenue #CAGR of 15.8% in MFs business whereas, the #MF industry has delivered 13.4% CAGR in 10 years
Same metrics for 5 year period are:
#CAMS: 21%
#MutualFunds Industry: 18%

Ahead of industry growth. Wonderful!
(5/12)

Overall, the company has logged a #CAGR of 13% in Revenue and 16% in #EBITDA over the last 5 years. (6/12)

As per a @CRISILLimited report, #MutualFunds #AUM to reach INR 52 Tn by FY25 end at a #CAGR of 18%. While delivering the report, #CRISIL believed that #MF industry won’t grow in FY21 but it increased from INR27Tn to INR 31.4 Tn. At 18% CAGR, FY25 #MF #AUM will be INR 61 Tn (7/12)

Also, #Insurance Penetration is very low in India and on the top of it, e-insurance penetration in India is also low. Both these are likely to increase and hence a positive factor for #CAMS. (8/12)

The only concerning issue is heavy dependence of business on #MutualFunds. If #MFs fail to grow, the company will have issues. While the dependence on top 5 clients is too high (>70% revenue share), the cancellation of contracts as per past trend seems very unlikely (9/12)

The company pays out a #dividend of 65% of its #EPS. Thus, as the earnings grow, the Dividend payouts are also likely to be higher unless payout policy changes. @ICICI_Direct has given a target of INR 2,100 for a period of 12 months. (10/12)

We consider this stock to be of a "Low to Medium" risk category. Please refer the pic below. We have covered this analysis in a 10-12 minutes long video - YT Link

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Thank you! Do share the thread if it added value (12/12)