CMS Info Systems Ltd


Mcap:4,493 Cr
PE: 18.5
PAT:224 CR FY22
TOPLINE: 1590 Cr
Listing Price:238
CMP: 292
Cash Handled : 11L Crores

Cash, a common perspective is its a dying business. Why digital India. Well there is an interesting data that shows otherwise
THE CIC (Cash on circulation) pre demonetization i.e. before 2016 was around 16L Crores and not i.e. 2022 the CIC id 31L Crores.(Source CMS CONCALL and I’ve crosschecked with RBI Data)

CMS has handled close to around 11L Crores in FY22.(Source Q4 Concall).

Overview of CMS Business segments

Cash Management
Managed Services
Tech Solutions

Cash management : 1. 46% market Share in Cash withdrawal, ATM replenishment, cash evacuation and deposition for BNA/recyclers, day-end reporting, reconciliation and settlement.
2. 36% market Share in Cash pick up and delivery from retail outlets and enabling settlement with retailers’ banks.
3. 26% market Share in Currency movement inter/intra city for Banks.

Managed Services: 1.Sales, deployment, and maintenance of ATMs.
2.Brown label ATM Deployment(Capex will be incurred by CMS INFO SYSTEMS) order book of 2000Cr around 70% of this executed the order include 3000 BLA(Brown Label ATM Deployment order from SBI)
3.Managed Services for bank owned ATM networks
4.Management and personalization of cards.

Tech Solutions : 1.Software solutions
2.AI based Remote Monitoring( Remote Monitoring of the ATM’s) Started one year back has successfully completed 10k+ ATM’S order for around 13K+ pending

Promoter Group and Management

In 2009 Black stone invested close to 300 Cr into company for 53% Stake in partnership with Rajiv Kaul former Microsoft India MD who currently heads the firm and 37% was held by grover family and around 10% held by Rajiv Kau and management team.
apart from this black stone has infused close to 100Cr Crores in the company .
in 2015 Baring PE Asia Acquired 100% Stake in the company for 2000Cr.
2021 December Came with 1100 Cr IPO Entirely offer for Sale by Baring PE.

Current management
Rajiv Kaul Has been with the firm since 2019 who currently serves as the CEO.
Pankaj Khandelwal CFO, Qualification CA and is with the company since 2006( Was with cms computer systems before demerger).
Manjunath Rao Pare Parmeshwar: President Managed Services Business with the company since 2012.
Anush Raghavan : President Cash Management business, been with the company since 2009.


ATM Deployment Data by the company DRHP

Approximately 110,000 new ATMs will be cumulatively added, with an additional 198,000
replacement demand; more than half of these will be deployed under the BLA model. 365,000 ATMs are likely
to be installed, driven by pent-up demand and the need to address under-penetration in the SURU regions, as well
as a shift from CAPEX to OPEX-based deals for banks (e.g. BLAs), and with additional upside expected given
the increase in interchange fees. The total ATMs (incremental requirement) is expected to increase from 43,000
in Fiscal Year 2022 to 61,000 in Fiscal Year 2027, predominantly driven by the replacement of ATMs. In order
to address this demand for new and replacement ATMs, banks are likely to prefer a BLA operational model – one
that can reduce CAPEX costs as well as ensure that the demand for the market is met. This is one of the key
drivers for the BLA market which is expected to grow from 86,000 ATMs in Fiscal Year 2021 to 180,000 ATMs
by Fiscal Year 2027.

Benefits The company that can derive from this Managed Services business Which Provides BLA Services( When banks out Source the ATM deployment via BLA model) they managed service segment will benefit out by installing and maintaining these ATM’s if they win the contracts and tech solutions segment will benefit by AI remote monitoring revenue
And cash management will benefit by ATM replenishment service.

Risk: Though the CIS has increased from 16L Crores to 31L crores over 7 years but the ATM value of transactions has been stagnant for the past 7 years i.e. monthly value of transactions has been at 2.5L to 2.75L for the past 7 years.
However the online transactions/POS has increased from 20K Crores per month in 2016 to around 60K Crores per month in 2022.
And from 2011 to 2016 Number of ATM’s in India Has increased from around 85K to 2L+ how ever from 2016 to 2022 the number of ATM’s has been the same of around 2L-2.5L, as per DRHP of the company banks will add 1L more ATM’s in coming 4-5 Years and Banks will replace around 1.8L ATM’s.
Over the last 7 years the number of ATM’S has hardly increased and now its hard to believe that 1L new ATM’s will be added over the next 4-5Years.

And one more thing is Baring Acquired CMS on 2015 a year before demonetization, rest is known to all. Baring acquired CMS for 2000cr they have made 1000 Cr via IPO OFS and the value of their current stake is around 2800cr they made around 1800cr profit over 7 years which is close to 10% CAGR.

Disclosure: Not Invested Trying to understand the future of Hard Cash and the company’s future prospects.


CBDC is a big threat to cash management businesses, id suggest you read more about Central Bank Digital Currency.


India Reserve Money: Currency in Circulation | Economic Indicators | CEIC.

Yes the cic has increased.

But when we see in normal day to day many places 60 percentage of people using QR code even for small payment but since I am in tier 1 city it is my experience but is cash now being used that much in other cities.

Other than cash management what kind of revenue they can generate

Require a deep study with help of other members otherwise looking good on value side but growth prospects has to be analysed

Disl invested a tracking qty.

1 Like


My Thesis

  • Banks are outsourcing these services so that they focus on their core purpose of banking.
  • Regulatory challenges call for consolidation in this field.
  • Tough business to achieve scale particularly for new or small company.
  • Cash is here to stay in India for a long time.
  • Other verticals growing fast. i.e. managed service etc
  • Skin in the game by CEO & CTO

Anti thesis

  • Digital money :moneybag:
  • VC type promoter, may offload shares

CMS Info Systems Q4 earnings.

:small_orange_diamond:Net profit up 24.8% at Rs 80 cr Vs Rs 64 cr (YoY)

:small_orange_diamond:Revenue up 13% at Rs 501.4 cr Vs Rs 444.1 cr (YoY)

:small_orange_diamond:EBITDA up 24% at Rs 144 cr Vs Rs 116 cr (YoY)

:small_orange_diamond:Margin at 28.7% Vs 26.1% (YoY)

Dividend ₹4.75/-

Key recent updates :

:small_orange_diamond:Dividend announcement
:small_orange_diamond:ATM manufacturing plant at Chennai
:small_orange_diamond:ATM Remote monitoring solution on growth
:small_orange_diamond:Some New AI ML related product
:small_orange_diamond:Cash management business having good growth
:small_orange_diamond:Management is confident about 18-20% revenue growth in near term

Good business available at reasonable valuation (in my hindsight)


Below is the link to Radiant Cash Management Services - competitor to CMS: -

1 Like

Thank you for the info about CMS companies - I like both CMS and Radiant, in due course, consolidation may be in the cards (depends on who acquires who and moves to pole position). May open a small tracking position for shits and grins. thanks again

while growth is a key-concern, ongoing-concern basis, what i am interested to know is - who will cannibalize the other’s business or whether they are already in entrenched positions (read how quickly can banks move from CMS to Radian - is it as simple as open-shut?). It appears both have healthy metrics and CIC is bound to increase in India - cash is king. The urban areas are see very high UPI usage, rural india still embraces solid cash (UPI may be outliers)

1 Like

I don’t see cannibalization happening between the two as there is enough opportunity for both to grow and co-exist. The RCM market itelf is growing at approx 20% CAGR. Moreover, CMS’s focus seems more towards ATM Cash Management and Technology Solutions (as one would expect with Rajiv coming from technology background) whereas Radiant’s focus is on RCM and DCV. In addition to banks, their thrust is to offer RCM solutions to other retail participants which in itself is a growing and a huge untapped opportunity. Furthermore, as with any other industry, the de-risking strategy (not to have all eggs in one basket) holds true for the financial industry as well giving rise to a likely duopoly in the long run.


Notes from Q1 conference call transcripts:

  • “I will calculate on the percentage of our revenue, it is coming to around 5% of our revenue” CFO. - Total cash losses, reconciliation issues / provisions for bad debts etc are very significant % of revenue. May not be so of volume of cash handled.
    Radiant’s cash loss was 6.3 Cr on revenue of 355 Cr FY 23. And 0 cash loss in Q1.

  • “I think it is an attractive market and can attract competition. And we have been alluding to the fact that we may see more competitive intensity in the coming year or two” - CEOx

  • “We feel there is a lot of opportunity in the coming 5 to 7 years, which will come from organic growth, which will be slower than before for sure but with higher outsourcing from banks, I think that should compensate” - CEO

1 Like

Source : JM Financials


I have one curious point about this company - Do any one has answer?
Why promotors selling and reducing the holding if the prospectus of the company is expected to be good? Employees who receive shares via ESOPs also selling in market.(including CEO)…if prospects of the company is good, why they can not hold for future good returns!

1 Like

The primary motive of private equity promoters is to generate returns for their investors. They do this by acquiring companies, improving their performance, and then selling them for a profit or investing in seed/early/late stage and riding the wave. Private equity promoters typically have a long-term investment horizon, starting from 3-5 years. The company is run by a professional management, so we need not worry.

1 Like

Could you please share the source of this information?

I am aware of PE Firms exiting due to completion of their investment period. However, I have not come across any detail of selling by CEO and other employees. Can you share details of selling by CEO because he has mentioned in one of his interviews that the management has skin in the game.

In Sept 23, Rajiv Kaul CEO did increase his stake

1 Like

Exactly. That is why the confusion from above post of @hnk_so