Target: ₹940
CMP: ₹709.45
Computer Age Management Services (CAMS) reported modest revenue growth of 5.5 per cent y-o-y and 3.6 per cent q-o-q in Q3 FY26, despite strong performance in non-MF segment (up 24 per cent y-o-y and 4 per cent q-o-q), as yield pressures weighed on overall topline largely in line with estimate. The company re-negotiated prices and the impact of telescopic pricing showed in slower y-o-y revenue growth. Further, the AUM saw modest sequential growth. Yields compressed to 2.1 bps from 2.36 bps a year ago.
We expect continued expansion in non-MF segment to enhance revenue diversification and aid margin expansion. We estimate its revenue to clock 11 per cent CAGR over FY25-FY28, with non-MF segment outpacing at 15 per cent CAGR over the same period.
While EBITDA margin fell 89 bps y-o-y, reflecting yield compression led by telescopic pricing structure and renegotiation with select clients, it rose 137 bps q-o-q due to better operating leverage.
As the bulk of yield compression is behind now, the management expects to sustain EBITDA margin 44-45 per cent, aided by improved operating efficiency and growing margin profile in non-MF business. Given steady growth in core MF segment and non-MF revenue emerging as the key growth driver, we maintain Buy rating on the stock with a 12-month TP of ₹940, valuing it at 38x FY28e EPS.
Risks: Macro-economic uncertainty and lower fees to RTAs due to reduction in TERs.
Published on January 28, 2026
