Target: ₹3,000

CMP: ₹2,576.90

Computer Age Management Services (CAMS), with a 70 per cent market share (v/s 64 per cent in FY15), is the leader in India’s MF registrar and transfer agent (RTA) industry. The addition of new customers and rising market share of its incumbent customers has led to the company consistently gaining prominence in this duopoly market.

This makes it is a direct play on the growing financialization of savings in India, and is also a key enabler for digitization in the MF industry. With MF penetration in India at just 16 per cent as against the global average of 63 per cent, we expect a strong 15 per cent CAGR in AUM for the industry in the coming decade.

Akin to its MF business, CAMS has a strong presence in the AIF and PMS RTA segment (50 per cent market share among funds utilising RTA services). We expect strong growth in this segment, led by: increasing adoption of RTA services by existing funds; and a significant increase in launches.

We initiate coverage with a Buy rating and a one-year TP of ₹3,000 (36x Sep’24E EPS). We value it a premium to AMCs (14-25x one-year forward P/E), given the duopoly nature of the RTA industry and large growth opportunities in new segments.

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