The results are quite good, and I am surprised at the muted market response to the results. Gross margins are the highest ever, operating margins and PAT margins have improved further and are now close to 45 % & 30 % respectively. Non-MF revenues have shown strong growth, and the management says 4 of the 6 businesses have grown by more than 20 %.
CAMS KRA revenues more than doubled, and it added 25 new financial institutions and FinTechs as customers during the quarter. The PayTM issue will provide additional tailwind to this business, increasing the outsourcing of KYC requirements by all entities in the financial ecosystem to reliable external partners like CAMS.
The addition of multi-currency capabilities to fund accounting is another big positive, as it increases of the TAM manifold. Technically, this has a market not only in the GIFT City zone but CAMS can offer fund management services even to entities abroad like in global financial hubs, who are willing to outsource their back office to India.
As non-MF businesses achieve scale, margins should improve further as costs will not rise in the same proportion as revenues. Meanwhile in the MF space, the SIP mania shows no signs of slowing down.