CAMS - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.7

📊 Fundamental Analysis: CAMS (Computer Age Management Services Ltd.)

CAMS is a dominant player in mutual fund transfer agency services, with exceptional capital efficiency and a strong earnings base. However, its valuation is elevated relative to growth, which tempers its long-term attractiveness.

Metric Value Implication

Market Cap ₹19,378 Cr Mid-cap; stable with niche dominance

Stock P/E 43.9 Slightly expensive vs. industry PE of 51.3

PEG Ratio 2.58 Overvalued relative to growth; caution advised

ROCE / ROE 53.6% / 43.4% Outstanding; strong operational efficiency

Dividend Yield 1.58% Moderate; adds income stability

Debt-to-Equity 0.08 Very low; excellent financial health

EPS ₹95.1 Strong earnings base

Qtr Profit Var +9.53% Steady growth; not explosive

FII/DII Holding Change -3.00% / +0.61% FII trimming; DII accumulation — mixed sentiment

📉 Technical Analysis

Current Price: ₹3,916

DMA 50 / DMA 200: ₹4,099 / ₹4,003 → Trading below both; short-term bearish

RSI: 35.0 → Near oversold zone; potential for technical bounce

MACD: -30.8 → Bearish momentum

Volume: Slightly below average; subdued interest

💰 Ideal Entry Price Zone

₹3,600–₹3,800

This range offers a better margin of safety and aligns with technical support levels

Avoid fresh entry above ₹4,100 unless earnings growth accelerates or valuation compresses

📈 Long-Term Investment Outlook

Strengths

Dominant market position in mutual fund services

Exceptional ROE and ROCE — rare quality in financial infrastructure

Low debt and decent dividend yield

Strong EPS and consistent profit growth

Risks

PEG > 2.5 — valuation exceeds growth expectations

FII selling — possibly due to valuation concerns or sector rotation

Technical weakness — short-term downside risk

CAMS is a quality compounder, but long-term returns depend on valuation normalization and sustained earnings growth.

🏁 Exit Strategy / Holding Period

If you already hold CAMS

Holding Period: 3–5 years for compounding and dividend income

Exit Strategy

Consider trimming near ₹5,200–₹5,300 if valuation stretches again

Hold as long as ROCE stays above 45% and PEG drops below 2

Reassess if profit growth slows or competitive pressures rise

Would you like a side-by-side comparison with KFin Technologies or CDSL to evaluate alternatives in financial infrastructure?

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