CAMS non-mutual-fund revenue nears 16% as CAMSPay grows

Computer Age Management Services Limited raised non-mutual-fund revenue to just under 16% of sales in Q2 FY27, up 150 basis points year on year, led by CAMSPay growth of more than 50%. CAMS said these businesses grew 21% year on year and generated profitability above 18%, compared with mutual-fund assets under management growth of about 12.5%.

How large is CAMS’ non-mutual-fund business?

CAMS’ non-mutual-fund businesses accounted for just under 16% of revenue in Q2 FY27, 150 basis points more than a year earlier. Management said the contribution had become more meaningful than it was three or four years ago, when revenue beyond mutual-fund servicing represented a less significant part of the company’s growth profile.

The businesses expanded faster than CAMS’ core mutual-fund asset base. The managing director described non-mutual-fund revenue growth as almost 22% year on year, while the chief financial officer put the rate at 21% year on year and 11% quarter on quarter. By comparison, CAMS mutual-fund assets under management, or AUM, increased about 12.5% year on year to Rs 58.5 lakh crore.

CAMS reported Rs 415 crore of operating revenue in Q2 FY27, its first quarter above Rs 400 crore, while earnings before interest, tax, depreciation and amortisation, or EBITDA, rose 13.5% to nearly Rs 191 crore. Profit after tax grew 14.5% year on year. Management linked part of the financial outcome to the expanding non-mutual-fund portfolio, although it did not disclose revenue for each individual business.

What drove CAMSPay’s growth in Q2 FY27?

CAMSPay grew more than 50% year on year and 13% quarter on quarter in Q2 FY27, taking its revenue contribution above 6%. That share was about 3% two to two-and-a-half years earlier, according to management, showing that payment services have gained a larger place in CAMS’ revenue mix.

Management attributed the increase to recurring payment products, including National Automated Clearing House, eNACH and Unified Payments Interface AutoPay, as well as the newer cards business. It said both product lines performed well and that significant client additions supported the quarter’s result, but it did not provide payment volumes or client numbers.

CAMS said it does not view the CAMSPay performance as a one-time event, which is management’s assessment rather than formal revenue guidance. The payment operation supplied growth during a quarter when CAMS’ overall mutual-fund AUM rose about 12%, below the high-teens asset growth management said it had seen in stronger previous periods.

Which other CAMS businesses are adding to diversification?

CAMS Alternatives increased revenue 22% year on year in Q2 FY27 as AUM crossed Rs 3.3 lakh crore. Management reported more than 50 new mandates and 15 new marquee relationships, with the business serving non-mutual-fund asset managers rather than relying solely on CAMS’ mutual-fund registrar and transfer-agent relationships.

The know-your-customer registration agency, or KRA, business also returned to quarter-on-quarter revenue growth. CAMS said five of India’s 10 largest broking houses were actively doing business with it, with its share at individual clients ranging from 10% to 25%. The chief financial officer said a comparison with the preceding quarter was more relevant because the first quarter included a fee remission of more than 20%.

CAMS’ insurance-policy repository passed 1.5 crore dematerialised policies in Q2 FY27. Bima Central added a module for insurance brokers, allowing a white-label service on brokers’ applications and websites that can direct customers towards policy dematerialisation and digital transactions.

The account-aggregator operation grew 19% on a small base, while CAMS had deployed a personal financial-management module for the banking application of one of India’s largest banks. Separately, ConsenPro, its Digital Personal Data Protection implementation product for banking, financial services and insurance clients, was under implementation with 20 clients after CAMS began building the market in April and May.

Is CAMS scaling non-mutual-fund revenue profitably?

CAMS said non-mutual-fund profitability was above 18% in Q2 FY27, against management’s aim to exit FY27 near 20%. The chief financial officer attributed the outcome to the mix of growth, including CAMSPay and the recovery in KRA revenue, indicating that the portfolio is being discussed as a profit contributor as well as a source of revenue diversification.

Company-wide expenses rose a little more than 7% year on year in Q2 FY27, despite Rs 8.5 crore of annual appraisal cost that was deferred from the first quarter to the second. CAMS also absorbed about Rs 4 crore of costs related to its new platform, while EBITDA margin increased 140 basis points year on year to 46%.

CAMS has made its FUNDSNet transaction utility live and plans to sunset the legacy utility by March or April. Management said the transition should reduce time and effort for brokers, aggregators, asset-management companies and operations teams. It also said artificial-intelligence-based form and data reading contributed to falling headcount after April, without quantifying the reduction or allocating savings to a particular segment.

What is CAMS targeting for the non-mutual-fund mix?

CAMS is targeting a non-mutual-fund revenue share of 20% within the next couple of years, from just under 16% in Q2 FY27. The 150-basis-point year-on-year increase provides the disclosed starting point for that target, while CAMSPay, alternatives, KRA, insurance repository and data-consent products are the businesses management identified as supporting diversification.

The target comes as the core mutual-fund operation remains substantial: CAMS had Rs 58.5 lakh crore of mutual-fund AUM and 67% market share in Q2 FY27. Equity AUM grew 15.5%, compared with industry growth of 15.2%, while gross systematic investment plan collections rose 16.5% against 12.4% for the industry, according to management.

Conclusion

CAMS’ Q2 FY27 figures show that revenue beyond mutual-fund servicing is becoming more material: the mix reached nearly 16%, CAMSPay rose more than 50% year on year, Alternatives passed Rs 3.3 lakh crore of AUM, and the insurance repository crossed 1.5 crore policies. These businesses also grew faster than the roughly 12.5% increase in mutual-fund AUM and were reported as profitable above 18%.

The next disclosed milestones are progress toward the 20% non-mutual-fund revenue target within the next couple of years and the planned retirement of the legacy FUNDSNet utility by March or April. Management also said possible insurance digitisation developments could become clearer over the next two or three quarters, while account-aggregator pricing changes may be discussed further when developments become concrete.