CAMS up 3%, analysts bullish amid structural tailwinds

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CAMS, the leading registrar and transfer agent (RTA) in India’s mutual funds (MF) industry, was trading higher on September 11 morning, with analysts expecting robust business momentum in the medium term.

The company’s stock was up 3.42% at Rs 2,547.50 on the BSE, as analysts said structural tailwinds favouring the MF segment and a favourable macro environment emerging for all its non-MF businesses augured well for the firm.

CAMS earns about 90% of its revenue from MF business, with the remaining 10% from non-MF businesses such as AIF/PMS RTA, insurance repository, CAMSpay, Account Aggregator and others.

The company’s non-MF businesses are expected to grow faster than its MF business in the coming years, driven by the following factors:

  • Increasing regulations on alternative investment funds (AIFs): CAMS is a leading player in the AIF/PMS RTA business, and it is well-positioned to benefit from the growing demand for RTA services in this segment.
  • Booming payments industry: CAMS’ CAMSpay business is poised to capitalize on the booming payments industry. The company is already a leading player in the MF payments space, and it is expanding its offerings to other segments, such as bill payments and peer-to-peer payments.
  • Account aggregator (AA) platform: CAMS is one of the few companies that have been granted a license to operate an AA platform. The AA platform is expected to revolutionize the way financial services are delivered in India, and CAMS is well-positioned to benefit from this.

Overall, analysts are positive on CAMS’ growth prospects and expect the stock to outperform the market in the coming months.

In addition to the factors mentioned above, CAMS also has a strong track record of execution and a robust financial position. The company has a market capitalization of over Rs 100,000 crore and is debt-free.

I believe that CAMS is a good investment for long-term investors. The company is well-positioned to benefit from the growth of the Indian financial services industry, and it has the potential to deliver strong returns to shareholders over the next few years.


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