Motilal Oswal has maintained a buy on CAMS with a target price of Rs 5,000 per share. This implies an upside of 21% over the next 12 months. This is particularly interesting, as the share price of CAMS has declined over 16% in the last 12 months. The big question is what changed? Motilal Oswal believes that healthy AUM growth and increasing traction in non-MF segments are expected to offset the decline in yields, as guided by the management.
The leading domestic brokerage house expects CAMS revenue to clock annualised growth of 11% on a compounded basis between FY25 and FY27, and the profit in the same period is seen going up by 12%. They estimate a P/E multiple of 42x on FY27 earnings for CAMS.
Three reasons powering Motilal Oswal’s bullish call on CAMS
CAMS continues to reinforce its position in the mutual fund industry. It currently holds 68% market share and serviced AUM size of Rs 44.1 trillion in FY25. The company managed about 132 new fund offers in FY25, mobilising a cumulative amount of Rs 73,400 crore.
CAMS Play clocks good growth in UPI-based registrations
According to Motilal Oswal, the key reasons powering the bullish call include the growth in UPI-based mandate registrations for CAMS Pay. It is up 25% QoQ in Q4FY25. As UPI AutoPay continues to become the preferred mode for SIPs and recurring purchases, they believe that “the company is well-placed as a trusted infra partner to AMCs and distributors.” With strong backend integrations, they see “CAMS Pay is positioned to become a critical layer in recurring digital payments infrastructure for financial services.”
CAMSRep clocks strong volume growth
CAMSRep reported strong volume growth, driven by rising adoption of e-policies. As per available data, over 11 million were issued via BIMA Central. Higher insurer integration with three insurers live on the platform alongside LIC is also seen as supporting the bullish call. They added, “favourable regulations around the dematerialisation of life insurance policies have aided this momentum.”
The big business differentiator
Moreover, Motilal Oswal added that the CAMS KRA business is “emerging as a clear differentiator, with 10-minute KYC processing vs around three hours for peers.” They believe features like WhatsApp-based KYC, API-led integrations, and compliance automation make “CAMS a preferred infra provider for intermediaries under evolving SEBI norms.” This is also a factor that’s powering the bullish call by the brokerage house.