Margin resilience masks headwind; growth reacceleration conditional

OPM 46.3% (≈183 Cr EBITDA), PAT +17.6% implies EBITDA ~18% growth confirmed

Delivered result: ₹395 Cr revenue, +11.5% YoY

Delivered OPM 46.3%, prior year 43.3%, ~300 bps expansion — call's 46.4% claim is 1 bp optimistic but within rounding

Within non-MF: Pay +70%, AIF +25%, KRA down YoY (price cut). Blended 28% claim stated but not independently verified from delivered P&L

No AUM data in delivered result, but claim is consistent with market backdrop (April-June muted, July recovery)

Starting from 46.3% OPM, 1-1.5% expansion would reach 47.3-47.8%; management's prior guidance ~46.5% maintenance is being framed as achievable with modest upside, not aggressive

Delivered result shows Q1 revenue growth only 11.5% (held back by KRA flat/down). No Q2 data, so recovery claim is forward projection

Call explicitly states these numbers; cost growth <7% achieved in Q1. Claim is specific and traceable

Prior FY26 guidance: sustained 20%+ non-MF growth. Q1 delivery: 28% growth (Pay +70%, AIF +25%, KRA down). Tracking guidance — no change.

Prior: maintain Q4 46.5% margin. Q1 delivered 46.3%. Expected to reach ~46.5% by year-end. On track — no change.

Prior calls implied upside to 47%+. Current: '1% very confident, may get 1.5%' — explicit cap due to cost headwinds (AI talent, infra inflation). More cautious than prior tone.

Prior: net headcount reduction guidance. Q1: 85 down YoY (1%), 225 down QoQ. On track to hit 5% for year via automation. Reaffirmed — no change.

Prior calls assumed KRA flat. Q1 actual: down due to 29-30% price cut from Apr 1. Recovery expected Q2+ — new risk disclosure.

Pricing structure changed uniformly across all KRAs. CDSL's mix is different (DP/broking focused vs our 75% MF). Some fetch was freed, now priced — opportunity identical to competitors. Will investigate further.

Q1 at 13% (KRA drag); expect 16-17% by year-end as KRA recovers and loss-making biz (Account Aggregator, Pension) improve. Confident of 17% (not 20%) by FY27-end.

Productivity gains distributed over year, not backloaded. Don't model sharp Q4 uplift. Cost increase will be 3-3.5% net (after offsetting AI/skilled hires), not full 5% headcount reduction.

Yes, balanced approach. Automation offsets, but risk/compliance/software roles still need investment. Target 5% employee cost, <10% overall expense growth for next 2-3 years.

AI enables industry-wide productivity (more untouched transactions, single-shot remediation). Will accrue to CAMS but also competitors. No claim of 2-3% margin expansion. 1% realistic, may reach 1.5%. Cloud/hardware costs rising, offset gains.

Largely credit cards (low-margin, transaction-driven). Education segment opened but not major contributor. No onetime revenue — 26-quarter track record of sustained builds.

Compression cycle ended (Q4'25, Q1'26). Residual for next 3-4 quarters will be muted. Historically see 2.5-3% annual — expect that by May guidance call.

On-prem capex ₹75 Cr FY27 (will decline). Re-arch total ₹500 Cr, ₹290 Cr capex (₹123 spent, expect ₹80 more capitalized), 10-year amort. Only coding cost capitalized, not maintenance/AI salary. Employee cost treated as opex.

If EBITDA ~45% growth, PAT ~31%. Expect PAT margins 30-31% sustainable going forward.

Q1 at 13% (KRA impact). FY27 expect 16-17% as KRA recovers and loss-making biz improve. Some businesses (Bima Central, Account Aggregator, MF Central) have high fixed cost, will turn margin-accretive at scale.

Non-MF 20%+ (Pay, AIF, Alternatives firing), MF 12% (AUM ~15% + yield stable). Q1 achieved 11.5%; need acceleration to hit 13% unless mix shifts to lower-margin segments.

Q1 achieved 28% (Pay +70%, AIF +25%, partially offset by KRA flat). Tracking well; management confident based on half of Q2 visibility.

Q1 asset-based +11%, absolute <10%. Requires AUM growth acceleration or yield stability hold. Market-dependent; July improved, but H1 FY27 muted.

Q1 delivered 46.3%. Management track record of hitting margin targets. Cost discipline proven (<7% growth); headcount reduction on track. Slight upside to 47% if cost stays sub-10%.

Conservative claim. Starting 46.3%, targeting 47.3% at high end. Infrastructure cost inflation acknowledged, AI benefits real but incremental. This is disciplined guidance, not promotional.

Q1 suppressed by KRA (29-30% price cut). As KRA recovers and loss-making biz improve, expect margin recovery. Interim guidance, dependent on KRA rebound.

Re-arch total project ₹500 Cr (₹290 Cr capex), spent ₹123 Cr so far. Expect ₹80 Cr+ capitalized FY27; will taper as cloud replaces on-prem.

10-year amortization. Next year add ₹12 Cr depreciation (₹8 Cr + ₹4-5 Cr new). Transparent, measurable impact.

₹500 Cr re-arch project 24% complete (₹123 Cr spent). Full deployment by FY28. If delayed, platform benefits (automation, margin expansion) push out; risk of capex write-down.

29-30% price cut from Apr 1 hit Q1 revenue. Market also subdued (account opening down). If recovery delayed or secular headwinds persist, KRA margin pressure continues; non-MF margin stays at 13% instead of 16-17%.

AUM grew only ~15% YoY (market dependent). If markets stagnate or decline, AUM growth could drop below 12% guided; hurts revenue and complicates 13% blended growth target. Equity AUM +17.6% vs industry 16% (ahead), but not by much.

Management explicitly capping margin expansion at 1% (max 1.5%), citing AI/cloud infrastructure cost inflation and skilled talent acquisition needs. If these costs exceed absorption, margin expansion stalls or reverses from current 46.3%.

SIF (10 months, ₹12k Cr AUM), GIFT City (₹750 Cr AUM), ConsentPro (early wins, immaterial revenue), Payment (new cards channel, low-margin) are early. Payoff multi-year; if adoption lags, new revenue pools stay small.