CMSINFONSEMay 27, 2025

CMS Info Systems Limited

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Management on call

Rajiv Kaul

EXECUTIVE VICE CHAIRMAN, WHOLE TIME DIRECTOR AND CHIEF EXECUTIVE OFFICER, CMS INFO SYSTEMS LIMITED

Pankaj Khandelwal

PRESIDENT AND CHIEF FINANCIAL OFFICER, CMS INFO SYSTEMS LIMITED

Anush Raghavan

PRESIDENT, CASH MANAGEMENT, CMS INFO SYSTEMS LIMITED

Puneet Bhirani

PRESIDENT (OPERATIONS), CMS INFO SYSTEMS LIMITED

Prithvish Uppal

ELARA CAPITAL

Key numbers — 40 extracted

20%

n our website. I want to talk first about FY '25. We entered FY '25 fairly bullish on the back of 20% revenue growth in the prior three years and also record order wins of almost Rs. 1,950 crores, wh

Rs. 1,950 crore

h on the back of 20% revenue growth in the prior three years and also record order wins of almost Rs. 1,950 crores, which we were expecting to execute in FY '25. Unfortunately, we encountered a sequence of una

15%

d hoping that things would pick up in H2 and worked really hard on project execution which was at 15% end of H1. This did ramp up to 30% in Q3, and we were hoping to close at 60% order execution by Q

30%

in H2 and worked really hard on project execution which was at 15% end of H1. This did ramp up to 30% in Q3, and we were hoping to close at 60% order execution by Q4. However, we fell short at 52%.

60%

ecution which was at 15% end of H1. This did ramp up to 30% in Q3, and we were hoping to close at 60% order execution by Q4. However, we fell short at 52%. February and March, which are key months to

52%

30% in Q3, and we were hoping to close at 60% order execution by Q4. However, we fell short at 52%. February and March, which are key months to close on projects for large PSU banks, but the large

Rs. 2,425 crore

ituation in getting their ATM networks up and running. This has led to revenue coming in lower at Rs. 2,425 crores against our guidance of 2,450-2,500 which we had shared in the Q3 call.

Rs. 800 crore

modest growth. I am happy to report that the order win momentum improved significantly in H2 with Rs. 800 crores of wins, 2x of that in H1. In fact, Q4 had Rs. 500 crores of order wins. Moving to Slide #4, our

y to report that the order win momentum improved significantly in H2 with Rs. 800 crores of wins, 2x of that in H1. In fact, Q4 had Rs. 500 crores of order wins. Moving to Slide #4, our integrated p

Rs. 500 crore

entum improved significantly in H2 with Rs. 800 crores of wins, 2x of that in H1. In fact, Q4 had Rs. 500 crores of order wins. Moving to Slide #4, our integrated platform approach is delivering very good resu

Rs. 50 crore

breadth across key banks. In fact, end of FY ‘25, we now had top 13 banks in India with more than Rs. 50 crores of annual revenue. A more subtle shift, which we want to point out here for you, is in the natur

50%

ne line of business. For example, if you look at the ATM cash segment, which used to be more than 50% of revenue 7 years ago, is now one-third of our revenue, despite growing at a 10% CAGR over tho

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Guidance — 20 items

Prithvish Uppal

opening

“We also have a webcast linked to today's call where the management will be taking us through the Results highlights.”

Rajiv Kaul

opening

“We guided early in the year towards this and hoping that things would pick up in H2 and worked really hard on project execution which was at 15% end of H1.”

Rajiv Kaul

opening

“2,425 crores against our guidance of 2,450-2,500 which we had shared in the Q3 call.”

Rajiv Kaul

opening

“In fact, our recurring revenue business is growing at more than 20% CAGR, and today accounts for more than one- third of our overall services pie.”

Rajiv Kaul

opening

“For example, if you look at the ATM cash segment, which used to be more than 50% of revenue 7 years ago, is now one-third of our revenue, despite growing at a 10% CAGR over those 7 years.”

Pankaj Khandelwal

opening

“However, it is lower than the target of 60% given that most of the large banks’ bandwidth was occupied dealing with the disruptions of one of the industry players.”

Anush Raghavan

opening

“This segment will be a key growth driver for us over the next few years, both in terms of the cash business as well as remote monitoring as we become the platform of choice for modern retail in India.”

Anush Raghavan

opening

“And our marquee solution win, with one of the leading banks, to build and operate a large and very complex monitoring solution which will go live soon, will be a key tech differentiator to win similar such mandates.”

Rajiv Kaul

opening

“If I look out for these two years, we are as a team aiming for robust growth in line with our historical growth rate.”

Rajiv Kaul

opening

“The drivers for this will be, first .,,,.”

Risks & concerns — 6 flagged

However, on a year-on-year basis, there is a decline of 8% given that in Q4 FY ’24 was an exceptional quarter with 56% year-on-year in growth.

— Pankaj Khandelwal

The segmental margin has impact of the provisioning which I spoke about earlier, as well as the cost incurred for helping banks streamlining their operation disturbed due to issue at one of the industry competitor.

— Pankaj Khandelwal

It will be very difficult for any third player to build this set of services now.

— Rajiv Kaul

It's very difficult to estimate the impact of anything from oil price to people cost and whatever may happen out there.

— Rajiv Kaul

It is difficult to capture the cost of the contract by BU.

— Rajiv Kaul

Because the first and foremost thing for everyone is, how do you handle the risk associated with all this?

— Anush Raghavan

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Q&A — 10 exchanges

Thanks for the opportunity. I had a couple of questions. First one was on your cards part of the business. If I look at FY ‘24 numbers, right, the size of the cards business is fairly modest, maybe looks like sub Rs. 100 crore kind of a top line, right? When I referred to one of the recent large .,,,. CM S Connecting Commerce• competitors in this space who filed for prospectus a few months back, their numbers seem to be much higher in this space. So, just wanted to get an understanding how do you approach this space and especially given the strong relationships that you have with banks across

Rajiv Kaul

Is that the only question? You said you have two. The second question was on the Vision AI part of your business. Just wanted to get an understanding of what is the differentiation that we offer in this space to the clients. So, great questions, especially on the card side, it's not a business which people normally ask too much about. And so I think, you know, if you go back to what we have said earlier, our goal as a company is to operate in sectors where we can be a clear market leader, unless we, I mean, there are some sectors we can't be a market leader, but then we make it a very profitab

So, my first question is related to some of the new businesses that you have incubated. So, I recollect that in a Q1 FY '24 call, you are looking to spend more time, the more management bandwidth to incubate some of these businesses so that we can generate some new revenue streams between FY '25 and FY '30. So, I understand that the collection business is shelved as of now, but can you just touch upon where we are when it comes to these businesses that can help us expand our TAM or expand our revenue stream? Anush Raghavanl: I think, you know, at some point, in one of our earlier calls we woul

Krushi Parekh

So, my second question is that we have generally refrained from giving emerging guidance in history in the past. So, another question is that we have generally refrained from assigning any margin related corporations. But given the annuity type businesses that we enjoy, the long-term nature of the contract that we have, is there a kind of a range that the management is comfortable with having internally or is it something that how do we approach when it comes to margins across businesses? I understand there is a complexity involved, but it's coming more from the annuity type business, the long

So, I think from a CAPEX, I think first we will talk about the margin guidance. You know, we have been reporting segmental EBITs, but as our business is changing, I think it's important to share this nuance. I think you should look at the overall EBIT for the company as a trend line. Almost 20% of our managed services revenue is captured as revenue in cash by BU. And that may eliminate through inter-BU recognition out there. It is difficult to capture the cost of the contract by BU. It is actually a merged and fungible cost. So, therefore, if you look at our EBIT margin overall at 19% to 20%,

Pankaj Khandelwal

So, CAPEX for FY ‘25 was approximately Rs. 130 crore. It was significantly lower than the guidance we have given of Rs. 300 crore considering the large order book we have got in FY ‘24 and ‘25. Our CAPEX will remain as we have guided earlier that Rs. 200 crore per year, and we are expecting that FY ’26, the CAPEX will be Rs. 300 crore to Rs. 325 crores. That includes around Rs. 163 crore which is lying in the CWIP in FY '25.

Sir, if you can give us some sense on the ground about the disruption that has happened because of one of our peer going on default. I understand you said that a few months after the situation will be much better. But just to understand whether you mentioned banks are taking over those operations and maybe it will come up for bidding in future and something like that. Is there a possibility that the competitor's business will be up for sale and something like that? If you can give us some flavor, that will be helpful to understand whether there is an increase in market share at play or how are

Anush Raghavan

Sure. Let me give you some broader points in terms of what's happening and how we end up piecing it all together. I think, as Rajiv said, we will wait for a quarter or so once the dark settles. But as I sort of alluded in the backdrop of our last call, you know, we had sort of been seeing an .,,,. CM S Connecting Commerce• increased l disruption to the ATM networks on the back of liquidity issues, but eventually resulting in employees not being paid. I think by the time we are working with the banks to help them out, the mandate is really for two things, right? Which is, how do you ensure that

So, I will take the second question first about the CWIP. CWIP is related to the project that we are executing. We have executed around 52% of our new contract we have won, and we expect that everything will go live by the end of September. So CWIP is related to the execution of those contracts. .,,,. CM S Connecting Commerce• The current liabilities, which has gone up from Rs. 60 crore to Rs. 193 crore, is related to capital creditors, which are mostly related to this CWIP. So, if you write it off, the amount is not that significant.

Rajiv Kaul

If you could repeat the first question, I think that was on the debt collection business.

Yes, I think this was more relevant in FY ‘24 wherein we were investing to incubate the business. Not so much in FY ‘25.

Anush Raghavan

FY '25 is really a function of just investing in, for the recurring contracts, you have to ramp up for project execution. You don't necessarily control when the projects will go live, because that’s still dependent on the banks, but you have to ramp up your internal resources and also therefore there is always a catch up on revenue to cost, given the nature of these large complex integrated contracts. When they make up in the, after the first year of fully operational, it starts making up and paying for itself.

Single digits.

Pankaj Khandelwal

So, we have made an adequate provision in FY ‘25 and this quarter. However, we have made whatever the legal recourse available with us to recover that money. And we are fully provided for whatever is receivable from that competitor.

So, you know, I want to be both respectful and careful in answering this question in terms of just making sure that we are just sharing just the right amount of information as to our playbook here. But our overall approach in BLA, irrespective of what happens when you compare it to our remains, as of now, to focus on fixed price contracts. We are bearish on transaction-based contracts historically. We had guided earlier, much earlier that we will keep this as less than 15% of revenue. .,,,. CM S Connecting Commerce• Now we drop that to less than 10% of revenue saying we will position size BLA

Management

Sir, any update on the Bullion business? Where are we at? What is the scale? How is that going?

Rajiv Kaul

So, Savi, Bullion, Anush had referred to it, right? Currently, it's an internal incubation. We have built a team. We are up and running. It's contributing to about 1% of overall revenue. Our strategy to scale this will finally be through M&A ideally. But we have to wait for the right opportunity and the right company to look at it. But meanwhile, I mean, it's a small base. It's going to grow rapidly. But right now, contribution to overall total company revenues is less than 1%. I think 1% roughly, yes, 1%.

Thank you so much for your time today. I look forward to connecting in the next three months at the end of Q1 to update you on our progress on our FY ‘26, FY ‘27 goals. Good evening.

Management

Speaking time

Rajiv Kaul

Moderator

Anush Raghavan

Pankaj Khandelwal

Praveen Kumar

Krushi Parekh

Amish Kanani

Prithvish Uppal

Savi Kumar Jain

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Opening remarks

Prithvish Uppal

Hi, thank you. Good evening, ladies and gentlemen. Thank you to the CMS team for the opportunity to host you for the Q4 and FY ‘25 Earnings Con Call. From the Management team, today, we have Mr. Rajiv Kaul – Executive Vice Chairman, CEO and Whole Time Director; Mr. Pankaj Khandelwal – President and CFO; Mr. Anush Raghavan – President, Cash Management; and Mr. Puneet Bhirani – President (Operations). We also have a webcast linked to today's call where the management will be taking us through the Results highlights. So, request everyone to please join the web link. I now hand over the con call to Rajiv sir. Sir, over to you.

Rajiv Kaul

Thank you. Good evening, everyone. I hope you have our Earnings Presentation visible to you, details of which Prithvish has shared. It is also on our Investor page on our website. I want to talk first about FY '25. We entered FY '25 fairly bullish on the back of 20% revenue growth in the prior three years and also record order wins of almost Rs. 1,950 crores, which we were expecting to execute in FY '25. Unfortunately, we encountered a sequence of unanticipated events which built into a perfect storm. We guided early in the year towards this and hoping that things would pick up in H2 and worked really hard on project execution which was at 15% end of H1. This did ramp up to 30% in Q3, and we were hoping to close at 60% order execution by Q4. However, we fell short at 52%. February and March, which are key months to close on projects for large PSU banks, but the large banks had to deal with severe disruption in their ATM operations due to issues at a key competitor, which we are all fam

Anush Raghavan

Thank you, Rajiv. Good day to everyone. I will switch to Slide 8. As Rajiv shared, despite a challenging macro environment, which was marked by several headwinds, CMS has emerged stronger across all our core businesses. This year, we won over Rs. 1,200 crores in new order wins, with a robust 60% coming from private banks, reinforcing our leadership in the financial sector. Execution has picked up in H2, with over half of our order wins from the prior five quarters going live. Our pending order book and the Rs. 500 crore of wins that we have in Q4 gives us a very healthy Rs. 1,400 crore of orders to be executed this year. Operationally, we grew our ATM and retail touchpoints by 9%, with our current business split of 73,000 ATMs and 77,000 retail equivalent touchpoints. Growth has been biased towards retail as during the year we also saw a significant churn in the ATM network. Our CIT volumes have grown by 20%. .,,,. CM S Connecting Commerce• Notably in our cards business, we had solid g

Pankaj Khandelwal

Thank you, Anush. Good afternoon, everyone. Moving to Slide #13, financial summary of the year. After three years of strong growth of 20% between FY ‘21 to '24, FY ‘25 was a consolidation year with a moderate revenue growth of 7%. However, we continue to maintain our strong margin profile with a PAT margin of 15.4%. On Slide #14, which is Q4 Financial Summary: In Q4, we picked up momentum on our order book execution with execution inching up to 52%. However, it is lower than the target of 60% given that most of the large banks’ bandwidth was occupied dealing with the disruptions of one of the industry players. The execution inch-up will help us to deliver sequential revenue and PAT growth of 6% and 5% respectively. In Q4 and FY ‘25 results were impacted on account of full provisioning for the services provided to one of the industry competitors. Moving to Slide #15. Talking about our yearlt segment financials, both cash and managed services business reported revenue growth of 8%. EBIT

Anush Raghavan

Thank you, Pankaj. Switching to Slide #19, there are two areas which we see as very interesting areas of opportunity for us. The first being retail opportunity. I had covered this briefly in our last call, but I would like to take this opportunity to reiterate some of the key points. India's organized retail sector is at a very key inflection point. Of the roughly 3 million retail touchpoints, only about 550,000 are organized. And roughly one-third of these have outsourced their cash logistics. This signals some massive untapped potential for CMS. We see strong demand for payment automation, secure cash logistics and real-time store-level reconciliation as retailers look to drive efficiency and transparency. Our 360-degree retail solution is designed for this environment which integrates cash logistics with AIoT-based remote monitoring and unified settlement processes serving not just retail but also adjacent sectors like fuel, automotive, government, e-com logistics and healthcare. Th

Rajiv Kaul

Thank you, Anush. I think for summary and to close out our presentation today, I will focus on the mid-term FY ‘25 to FY ‘27 opportunity. If I look out for these two years, we are as a team aiming for robust growth in line with our historical growth rate. The drivers for this will be, first .,,,. CM S Connecting Commerce• and foremost, we aim to and we hope to finish our order book execution in H1. This will be a key pillar for our growth in the near term. The market for us is consolidating. If you look at cash management, there are really two scale companies and a couple of smaller ones. From an end-to-end integrated players, instead of three, there are only two companies now. It will be very difficult for any third player to build this set of services now. This will lead to naturally market share gains for leading companies in the coming years. The retail section, Anush, has already mentioned the opportunity and took you through it. We have been executing very strongly in this sector

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