*CAMS - Rising competition between asset managers does not impact CAMS, Maintain BUY - 2QFY22 Result Report*
*Result Highlights*
*Asset-based Mutual Fund Revenue*: Asset-based mutual fund revenue was up 11.3% QoQ and 32.5% YoY to Rs 1.73bn, broadly in line with AAUM serviced by CAMS, which rose 10.7% QoQ and 31.6% YoY.
*Non-Asset-based Mutual Fund Revenue*: Non-asset-based mutual fund revenue rose 25.9% QoQ and 42.7% YoY to Rs 0.32bn, with the key factor driving this revenue sequentially being the return of paper-based transactions.
*Non-Mutual Fund Revenue*: Non-mutual fund revenue rose 11.1% QoQ and 24.4% YoY, driven by growth in AIF and Insurance businesses.
*Operating profit margin*: Operating EBITDA amounted to Rs 998.6mn for the quarter, translating to an EBITDA margin of 43.9%.
*Our view – Rising competition between asset managers does not impact CAMS*
*Upward pressure on commissions for mutual fund distributors does not impact CAMS as such*: Management clarified that CAMS’ fees are not linked tightly to what happens to NFOs in a given quarter and this implies that rising competition between asset managers does not really impact CAMS.
*Multiple Non-MF businesses continued to evolve on a positive path*: Encouragingly for the Account Aggregator (AA) business, management opined that the Technology Service Provider offering is going to be a bigger market for CAMS than the standard AA services.