CAMS - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.4

🧾 Core Financials

Earnings Strength: EPS of ₹90.0 and PAT of ₹105 Cr (flat QoQ) reflect consistent profitability and operational stability.

Return Metrics: ROCE at 54.8% and ROE at 43.9% are outstanding, indicating exceptional capital efficiency.

Debt Profile: Debt-to-equity of 0.07 — virtually debt-free, supporting strong cash flows and financial resilience.

Cash Flow: While not explicitly stated, high ROE and low debt imply robust operating cash generation.

💰 Valuation Indicators

Metric Value Insight

P/E Ratio 45.4 Reasonable vs. industry PE (57.7)

P/B Ratio ~19.4 High premium over book value

PEG Ratio 3.11 Overvalued relative to growth

Dividend Yield 1.52% Attractive for a tech-enabled services firm

Valuation is elevated, but justified by strong returns and dominant market position.

🏢 Business Model & Competitive Advantage

Computer Age Management Services (CAMS) is India’s largest registrar and transfer agent for mutual funds, serving over 70% of the industry. Key strengths include

Monopoly-like position in mutual fund recordkeeping

Scalable tech infrastructure and regulatory moat

Expansion into insurance, KYC, and digital onboarding services

High client retention and annuity-style revenue

CAMS is considered a “compounding machine,” with ROCE rising to 45% and capital employed expanding by 81% over five years

1

.

📈 Technical & Sentiment Indicators

RSI: 65.6 – Approaching overbought territory.

MACD: 22.0 – Bullish momentum.

Volume Surge – Nearly 2x weekly average, indicating strong interest.

DMA 50 & 200: Price is above both, confirming technical strength.

Short-term resistance lies near ₹4,150–₹4,200, with support around ₹3,900.

💡 Investment Strategy

🔽 Entry Zone

Ideal Buy Range: ₹3,850–₹3,950, near DMA 200 and technical support.

Current Price ₹4,075: Slightly above ideal entry, but still reasonable for accumulation.

🕰️ Long-Term Holding

Strong Hold or Accumulate on Dips: CAMS offers high ROE, low debt, and a dominant position in a growing industry—ideal for long-term compounding.

Watch FII Sentiment & PEG Ratio: Recent FII outflow (-3.00%) and elevated PEG suggest short-term caution.

You can explore Simply Wall St’s ROCE analysis on CAMS or review CAMS’s long-term price targets and technical outlook for deeper insights. Let me know if you'd like a peer comparison with KFin Technologies or NSDL.

1

simplywall.st

Edit in a page