Didn’t follow you. Are you comparing CMS with Infosys/TCS ?
I’m not comparing them per se rather trying to figure out how much of their tech solution business overlaps with the large and midcaps listed IT giants.
For eg: CMS provides ATM software solutions, from what I (being a non-tech guy) understand this includes the algo on which the software of ATM machine works now TCS also has a similar service which they provide to the international clients as of now, but can very well be done for the domestic banks/fintechs at a cost effective rate.
Like for eg this 2013 agreement with federal bank
I understand that this may be a far fetched idea but can anyone here point out if this can potentially emerge as a threat to CMS’s tech expansion?
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Being from a tech company similar to TCS, I would say this is a scenario thats possible but most improbable . How large is the ATM business ? Will it move the needle by any meaningful amount for bigwigs like TCS ? If not then why would they get into it ?The big corporate groups have enough muscle to outmuscle anybody if they wish but the reward have to be large enough .Also TCS ,infy etc are not in the ATM deployment business themselves…sure they can develop these softwares but they have to sell it to companies like CMS who deploy and manage ATMs or to those banks who manage their own ATMs and at least according to CMS ,their number is reducing . So it would be a dwindling market with pre- existing competitors with end to end presence .
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While I didn’t get any response to the email queries, the mgmt has given some indication in the recent concall.
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Although the receivables are increasing YoY (almost 27% of total assets and this percentage has increased YoY), the cash conversion cycle is -401 until March 2024. This is because the payables have increased more rapidly. As a result, CFO is healthy with CFO/PAT more than 100% and CFO/EBITDA more than 73%. One thing that caught my attention is the zero promoter holding in the company (around 6% shares are held by Rajiv Kaul as a super investor). I am trying to find the reason behind the promoters selling their stake.
PS : Studying the company. Was keen on buying it but now a bit reluctant as better opportunities might exist in the market.
The promoter was a PE fund, Barings - they will have to exit at some point given fund life constraints. No PE selling pressure overhang
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PE has already exited completely around 3 months back. CMS Info is now a publicly held company with Rajeev Kaul owning around 6%. He converted his ESOPs to increase his stake.
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Mr.Rajeev Kaul is a very visionary person, he did work at Microsoft.
they sold their overall stake for the company’s growth, But it did not leave the company. They have stayed with the company through public investment (6% stack) because they believe in its growth.
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