CAMSNSENovember 07, 2022

Computer Age Management Services Limited

10,192words
47turns
7analyst exchanges
3executives
Management on call
Anuj Kumar
MANAGING DIRECTOR – COMPUTER AGE MANAGEMENT SERVICES LIMITED
Ram Charan Sr
CHIEF FINANCIAL OFFICER – COMPUTER AGE MANAGEMENT SERVICES LIMITED
Anish Sawlani
HEAD INVESTOR RELATIONS – COMPUTER AGE MANAGEMENT SERVICES LIMITED
Key numbers — 40 extracted
27 lakh crore
the operating metric in the business, were at the highest ever and scaled past the 27 trillion or 27 lakh crore mark. The average assets were at 27.1 lakh crores, which is an all-time high. This represented a
27.1 lakh crore
he highest ever and scaled past the 27 trillion or 27 lakh crore mark. The average assets were at 27.1 lakh crores, which is an all-time high. This represented a 3% increase over 1Q. So after a period of time
3%
mark. The average assets were at 27.1 lakh crores, which is an all-time high. This represented a 3% increase over 1Q. So after a period of time when there was almost muted growth, this was the firs
69%
rs that we saw an inch up in the overall assets. CAMS Service Funds continue to maintain dominant 69% market share in overall assets of the mutual funds market. So that collectively is reflective of
32%
ed, so all of those are pointing to what could turn into an exciting marketplace. We registered a 32% year-on-year growth in revenues, which is a very encouraging number. And then CAMS Wealthserv o
9.5%
r. On NPS, the CRA business, we have launched the CRA platform on cloud in March 2020. We had a 9.5% share and number two position in the eNPS, the direct-to-consumer part of NPS, the eNPS part. On
10%
aging. Our Digital properties, myCAMS and edge360 clocked a quarter-on-quarter volume growth at 10%. This was some share gain from other electronic channels, which is very encouraging. We continue
INR 100 crore
Genie, which is our deep contract dressing solution. Assisted insurance companies in closing over INR 100 crores of unclaimed benefits till date, this is just the beginning, as we've said in the past, it's a u
INR 27 lakh crore
ask me, just fundamental foundational operating metrics, it is these. AUM like I said, went past INR 27 lakh crore at 27.1%, which is an all-time high. Our NFO collections were over INR 12,000 cro
27.1%
ntal foundational operating metrics, it is these. AUM like I said, went past INR 27 lakh crore at 27.1%, which is an all-time high. Our NFO collections were over INR 12,000 crore during
INR 12,000 crore
7 lakh crore at 27.1%, which is an all-time high. Our NFO collections were over INR 12,000 crore during the quarter, but the significant thing was so spanning over more than 40 schemes. So, you
INR 37 lakh
umber and then in terms of SIP registrations in the first quarter and gross registrations were at INR 37 lakh in the second quarter at INR 38 lakhs. So that number is holding out at an aggregate value quite
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Guidance — 20 items
Anuj Kumar
opening
“Now this number can be much larger, will be much larger.”
Anuj Kumar
opening
“And this is just the consumer participation what the consumers consume through the API-based participation will be numbers on top and you don't see here.”
Anuj Kumar
opening
“You read about some of our AMC now being live on UPI auto pay and that's going to give a fill- up to the SIP market additionally in terms of how payment mechanisms or how additional payment mechanisms will be available to the consumers.”
Anuj Kumar
opening
“One more thing I would say is that the CAMSRep applied for the Sandbox project with IRDAI or developing an industry platform for assignment.”
Ram Charan SR
opening
“Those continue to come and as per our guidance in the earlier quarters, the investments will continue for a quarter or two.”
Management
qa
“As and when this becomes mandatory, all of that will become the purview of insurance and all of those will be digital policies.”
Management
qa
“So that's going to start pretty soon probably from next quarter, where we'll have a commercial model and the financials will pay something, insurance company will pay something and that will happen.”
Management
qa
“So once the platform becomes a policy servicing platform, which is expected within the next couple of quarters, for sure, then the scope for transaction revenue will be much higher than what it is now, which is all the components that you spoke about in terms of policy collection and rooting it through a payment we have doing a claims, policy statement, etc..”
Management
qa
“What I would look at it is not from the perspective of those costs actually going on because we would kind of retain the development cost on the books, because to add additional features to ensure that this platform stabilizes, etc., so while on an approximate basis, I can tell you the total money we spend from opex perceptive will be between INR 3 crores to INR 4.5 crores in a given quarter on these expenses.”
Management
qa
“There will be some rationalization that happens.”
Risks & concerns — 4 flagged
And as the equity assets growth, there could be some impact of that.
— Ram Charan SR
Although the mix has offset this to a large extent, the increase because of the depletion because of the equity slabs telescopic -- there were some pricing contracts that were kind of finalized during the last few quarters with some of the major customers and the impact of this is there.
— Ram Charan SR
But this volume growth escalating comes a price competition cell or kind of being a B2B business comes the pricing pressure (46.20) I mean, if we were to a summit because of liar just emerging.
— Avinash Singh
And the quality of service will come under test because right now, it's not been a core player, not everybody, not every consumer has an insurance account, there will be a time when everyone has and the pressure of performance will mount.
— Management
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Q&A — 7 exchanges
Q
Just firstly on the insurance repository business. Now if I look at the data that you have shared and in that sense, the revenues have been flattish on a sequential basis in spite of the fact that we've kind of doubled the accounts and the KYC has gone up. So what is the revenue model for the segment? And now once that there is a mandate from the regulator about converting all the possible insurance policies to EIA accounts, what would be the revenue potential for the industry?
Management
Yes, Prayesh, I'll answer the question. So the number that you see in terms of the flattish number, quarter-on-quarter insurance has two components. One is the outsourcing business, which we have again put out several times in the past. It's not the focus area for us. It's more kind of an outsourcing business, labor arbitrage. We continue to have good relationships on that, but that's something that is kind of not the focus for us. If you see purely from a digital revenue or from IR revenue, it has actually grown smartly. And the numbers that Anuj are not spoke about. The number of policy conv
Q
Sir, firstly, I mean, on the negotiations with the AMC, right? So where are we in terms of negotiations on the pricing side, if you can give some color given the kind of yield compression, all these AMCs are facing. So where are the negotiations with the RDAs if they talk about that a bit? And the second one was on – opex, so if you can quantify the investments? So out of the INR 27-odd crores, what are the investments which we are making in the new businesses? And part of which will sort of stabilize after two quarters to get a better sense of the long-term normalized number?
Management
Yes, sure. On the price negotiations with customers as with our agencies, -- this is something that will happen periodically. So the good part is a lot of these contracts have been signed up in the beginning of this year. For one, two years -- none of it is one year, it's actually two or three years depending on which AMC it is. So barring one, all the major contracts with the AMCs have been signed and the results that you see is the -- contains the result of the negotiations and what commercial outcome of those discussions were. So this is an ongoing thing. So there is nothing that I can spec
Q
A broad question. I mean, the way you are just stepping up, there are so many sort of business areas like a starting or mutual on now the opportunity on the insurance side on the alternate side, account aggregators, I mean there are many quite sustainable. Now there are two sort of I would say forces that play. I mean of course there is massive volume growth opportunity in each of the areas. But this volume growth escalating comes a price competition cell or kind of being a B2B business comes the pricing pressure (46.20) I mean, if we were to a summit because of liar just emerging. How do you
Management
So let me start with AIF first, where we are seeing because it is a complex suite of services run over a platform. Prices are largely holding. Do remember that each of the markets that I'm going to speak about, none of them is a 2-player market. There are 4 players, 5 players and basically multi-participant markets, unlike mutual farms. But in AIF, we are finding that price is holding, which means we are not seeing too much of price attrition because of competitive pressures, yet, we will have to see because there are five or six players that participate how that turns out. In this quarter, yo
Q
Yeah. Good morning Sir, and thanks for the opportunity. My question was regarding the cost to that You said considering that we are already spent on the AIF as well as the PMS platform as well as the platform that you pointed to the insurance thing. Also, some of these costs would be lower. So in many ways, could we understand that the quarterly cost that we are seeing in Q2 is broadly should remain at this level in going ahead, which means that Q1 was kind of a bottom margin. And if that is the case, would we be able to kind of think of a margin more like around forty five mid-forties going a
Management
So Ansuman, broadly, I would agree with you that, you know, Quarter one was probably you know, we saw the salary cost coming in, in terms of the increases we had to give given the job market and the tech resources. Let me put it this way that we are not on a hiring spree. It's not as if we are going to keep adding rather other than technology resources. Investments we make in security and infra. It's not going to be a huge investment that we are going to incrementally do on other things. So I think the cost will be pretty stable at least for the next couple of quarters. Again, the April cycle,
Q
Yes. Good morning. So my question is, while you've highlighted that alternative's Insurance and AA will be your top fine and top businesses in your new segment, does that also remain the order of when I ask you something like this, which business will clock INR 20 crores of EBITDA first? So we will it – will the order of remain the same or will the order change.
Management
Well, without making too much of a forward-looking statement. I think INR 20 crores EBITDA, it has to be a result of and again I’m talking in a very approximate manner of INR 40 crores or INR 50 crores revenue. The way things are looking right now just in terms of current size, of course, it’s tough to predict future size in terms of who’ll get, get there first. Alternatives looks like will be the first to get there. I’m sure the other business that would like to prove me wrong, but that is the way I would look at it right now. And this will be followed by insurance. And then a broadly in your
Q
Good morning, sir. My name is Puneet. I'm calling from Delhi. I would like this question to be answered by Mr. Ramcharan. I'm looking for basically I'm seeing the two sides of the company. I would like which side I should look at. Because there is the investor presentation, so many Indian, so many companies which create future. That is one thing. Second part of the first side is Mr. Anuj presenting some lakhs of crores plus some lakhs crores, billions of transaction added, etc.. These are the positive sides. The negative side I see in the consolidated P&L is sales have increased from INR 231 c
Management
So I’ll try to clarify. I'm sorry, something caused the confusion to you. So the only numbers that are relevant is obviously the consolidated numbers. And those numbers are uploaded in my in the SEBI website as well as in the exchange. And the earnings presentation has the same numbers. So just as a summary, the sales have gone up by 6.3% year-on-year and 2.4% quarter- on-quarter. That is the INR 242 crores numbers that you see, which is attributable to the increase in the assets under management by the similar number. There is no confusion on that and you don't have to worry about subsidiarie
Q
Thanks. On behalf of the CAMS management, I would like to thank the participants for their continued interest in CAMS. And for any further questions, please feel free to contact IR, Orient Capital or Anish Sawlani, the coordinates that mentioned in our presentation. Once again, thank you for your participation and continue to please follow CAMS and please get back to us in terms of any questions. Thank you all very much.
Management
Speaking time
Management
17
Moderator
9
Sahej Mittal
5
Prayesh Jain
3
Avinash Singh
3
Ansuman Deb
3
Sagar Gandhi
2
Anuj Kumar
1
Ram Charan SR
1
Ram Charan
1
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Opening remarks
Anuj Kumar
Thanks Faizan, and good morning everyone. I thank you all for sparing the time today for attending our earnings call and I hope that I'm audible to all of you. The way we will structure this is like we've done in the past, I will run you through a small presentation on how the quarter was and the key highlights. And then I will hand over to Ram Charan, our CFO to speak specifically about the financials. And then we will have enough time left over for a Q&A session. So I'll begin, I guess, most of you must have downloaded the presentation, I will just take you through a sequence of sale and highlights. Overall, when I speak about our core business, which is the mutual funds business, our assets, which is the core, you can think of it as the operating metric in the business, were at the highest ever and scaled past the 27 trillion or 27 lakh crore mark. The average assets were at 27.1 lakh crores, which is an all-time high. This represented a 3% increase over 1Q. So after a period of tim
Ram Charan SR
Thank you, Anuj. So I'll just take the next few minutes and go through the broad financials for the quarter. As Anuj was mentioning, there was a recovery from the asset growth side on year- on-year basis, the asset center management grew by almost 6%. So tracking that my mutual fund revenue as well as the overall revenue grew by 6.3% year-on-year. On quarter-on-quarter two, we saw a growth in AUM almost 3 percentage. So the revenue also grew by around 2.5 percentage largely on the back of growth in mutual funds and growth in mutual funds and asset-based revenue. So for the quarter, we ended up with a revenue of INR 242 crores, which, as I said, is up 6.3% year-on-year. The corresponding number was INR 227.6 crores in the FY '22 Q2. On a sequentially, we were up at 2.4%, which is compared to INR 236 crores in the Q1 FY ’23. Mutual fund revenue broadly mirrored the growth in AUM. The growth was 6% on mutual fund revenue year-on-year basis, which is minoring the growth in AUM. And on a se
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