The brokerage house Nuvama has maintained a ‘Buy’ rating to Computer Age Management Services (CAMS) and set a target price of Rs 910, implying an upside potential of around 14% from current levels.

Let’s take a look at the key factors why the brokerage house has given a ‘Buy’ rating to the stock and the rationale behind it –

Nuvama on CAMS: Earnings supported by multiple factors

According to the Nuvama report, the company’s Q4 performance was driven by a mix of factors rather than a single trigger.

“CAMS Q4FY26 revenue of Rs 395 crore (+11.0% YoY/1.3% QoQ) and NOPLAT (Net Operating Profit Less Adjusted Taxes) of Rs 150 crore (+14.2% YoY/1.1% QoQ) was shaped by four moving parts,” added the brokerage house report.

The report highlighted that weak equity markets limited growth linked to assets under management, but this was balanced by stable pricing, growth in non-mutual fund segments, and controlled costs.

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Nuvama on CAMS: Mutual fund business remains stable

The mutual fund (MF) segment continues to be the backbone of the business.

As per the brokerage house report, asset growth remained steady despite market fluctuations. Total average assets under management (AAUM) rose over 20% compared to last year, while equity assets also saw healthy growth.

The report noted, “MF AUM-linked revenue grew 11.6% YoY/0.5% QoQ to Rs 289 crore, indicating that blended yields stayed stable despite rising passive share.”

Nuvama on CAMS: Diversification beyond mutual funds gains traction

One of the key positives highlighted in the report is the company’s gradual shift towards diversifying its revenue streams.

Nuvama added, “Non-MF revenue rose 23.9% YoY/6.9% QoQ, reducing MF revenue share by 160bp YoY to 84.7%.”

This means the company is slowly reducing its dependence on mutual fund-related income. Growth in segments like payments (CAMSPay), alternative investment funds (AIF), and insurance services has supported this shift.

The report also added, “Management guides for 20%-plus growth in non-MF revenue.”

Nuvama on CAMS: Cost control boosts profitability

Another important factor supporting the brokerage’s positive stance is cost management.

According to the brokerage report, expenses remained tightly controlled during the quarter, which helped improve margins.

“Tight cost control driving operating leverage (opex grew only 7.8% YoY/0.4% QoQ) resulting in EBITDA margin expansion for the third consecutive quarter,” added Nuvama in its report.

Nuvama on CAMS: Profit growth remains steady despite challenges

Even with some pressure from market conditions, overall profit growth remained stable. According to the brokerage report, “APAT grew 11.6% YoY/1.0% QoQ to Rs 126 crore, aided by stable other income.”

At the same time, the brokerage has slightly adjusted its future estimates. “We are tweaking FY27E/28E APAT by (4.0%)/(4.9)%, yielding a target price of Rs 910 (earlier Rs 850)… maintain ‘Buy’.”

What should investors watch

Key factors to track include growth in mutual fund assets, expansion in non-MF businesses, and any changes in pricing or yields. The report also highlighted a potential risk where asset management companies (AMCs) may renegotiate fees, although no such discussions have started yet.

According to the brokerage report, while market-linked growth may remain volatile, the company’s strong position, diversified revenue streams, and cost control provide visibility on earnings.

Disclaimer: Investment details and brokerage ratings mentioned in this report are for informational purposes only and do not constitute a financial offer or solicitation. We recommend consulting a SEBI-registered investment advisor before making any decisions related to specific stocks or price targets. Market investments are subject to risk; please evaluate your financial goals and risk appetite independently.

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