Highlights:

The company witnessed slightly tough quarter in Q1FY2023 on account of continuous headwinds for the equity market and absence of new fund offerings throughout the quarter impacting build up of equity assets. However, as per the company some positives continued to play out for the sector.

Equity gross and net inflows remained buoyant for the company. The company witnessed net equity inflows of Rs 37000 crore in the quarter ended June 2022. SIP inflows have remained consistent and stood at Rs 21953 crore in Q1FY2023, which have been rising for last 5 to 6 quarter and the number touched a record high in the quarter ended June 2022.

The market share in net inflows and SIP registration has improved on sequential basis. The company continued market leadership with 69% market share in MF AUM.

There is a strong increase in SIP registration to 36.5 lakh compared with 28 lakh year ago.

The overall AUM serviced by the company has declined by 1.6% on sequential bases mainly on account of decline in the equity market and the bonds.

Equity AUM of the company has increased by 35% yoy to Rs 11.3 lakh crore end June 2022 from Rs 8.38 lakh crore end June 2021. The equity market share of the company has increased by 300 bps over a year ago level to 65.7% end June 2022 from 62.7% end June 2021.

The share in new SIP registration has increased substantially to 65% from 55% last year.

The company expects SIP flow and registrations growth to continue for the near term.

Transaction volume has increased 27% to 11.5 crore in the quarter ended June 2022.

The customer base has increased 28% to 5.3 crore, while the unique customer base has surged 40% to 2.4 crore end June 2022.

All the foundation metrics such as equity inflows, SIP registrations, equity market share, equity AUM are showing healthy trend.

An increase in equity AUM share has supported an improvement in the yields.

The alternatives business grows 30% in revenues on the back of accelerated signings and rapid adoption of CAMS WealthServ.

New business addition remained strong with 15 new wins in the AIF/PMS space in Q1FY23. Over 40 Funds have signed up for AIF/PMS digital onboarding with CAMS WealthServ since launch. The company has ambitious target to take this count to over 100 within the financial year.

Fintuple Technologies builds momentum with multiple new client signups and new offerings in eSign and eKYC.

CAMS GIFT City operations have signed up with 5 clients.

The alternate business is expected continue to grow at similar rate of 30% for rest of FY2023.

Account Aggregator business is gaining momentum coupled with a compelling TSP offering and new sign ups. The company has continued to sign up banks, housing finance companies, brokers on the account aggregator platform.

CAMS launched the industry first CRA – eNPS platform on cloud in March 2022. eNPS is live and POP & corporate are in pilot phase. Within a short span of time, the company achieved 10.3% share and number 2 position in new eNPS sales in Q1FY23

The payment business revenue also increased 20% on yoy basis.

MF Central is growing well and the company is witnessing demand recording 1000 new registration per day without high decibel promotion. The company expects MF Central to contribute to the revenues by Q4FY2023.

The revenues of the company increased 18% to Rs 236 crore. The assets based revenues have increase 16% which generally tracks AUM growth and improvement in the yields have supported growth in the asset based revenues. On sequential basis the asset base revenues have declined by 0.3% compared with 1.6% line in the AUM.

The asset based revenue increased to Rs 181 crore compared with Rs 155 crore in the corresponding quarter of last year

The non asset based revenues have surged 30% on accounts of low base. Improvement in the non-asset based revenues was supported by higher transaction volume up 29% over a year ago.

The non asset based revenues stood at Rs 33 crore compared with Rs 25.51 crore last year.

Non-mutual fund revenues have increased 15% to Rs 22.81 crore compared with 19.7 crore last year driven by strong growth in the AIF business, repository business and payment business.

The company expects the yield to remain stable or improve going forward

The operating profit margin has declined to 41.5% from 46% a quarter as well as a year ago mainly driven by the tech spends and higher employee expenses.

There is increase in employee expenses by Rs 7 crore on account of higher ESOP related expenses.

In the time of strong AUM growth the margin can be higher above 40%, while margins can be around 40% during low AUM growth.

The company does not expect any further impact on account of salary hike in the remaining quarter.

The company had a record capex of Rs 60 crore last year to meet the SEBI requirements of having two times capacity for transaction processing and maintaining industry tech platforms.

The company will continue to make significant investment but do not expect to repeat this high level of capex every year. The company is expecting capex of Rs 35-40 crore for FY 2023.

The company is expecting a ESOP amortization cost of Rs 28 to 29 crore for FY2023.