CAMS Achieves Record Quarterly Revenue, Announces ₹14 Dividend and 1:5 Stock Split

Computer Age Management Services (CAMS) has announced its financial results for the second quarter, showcasing significant achievements including an all-time high quarterly revenue of ₹376 crore, marking a 6.4% increase from the previous quarter. This growth was bolstered by strong performance in both mutual fund (MF) and non-MF segments, with CAMS Alternatives also posting its highest-ever quarterly revenue.

In addition to the strong revenue, CAMS is rewarding its shareholders with an interim dividend of ₹14 per share and has announced a stock split in a 1:5 ratio, aimed at increasing share liquidity and accessibility. Financially, the company's Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) grew 8.6% sequentially to ₹167.6 crore, with its margin expanding to 44.49%. Profit After Tax (PAT) rose by 5.4% to ₹113.9 crore. Although the reported revenue was slightly below market expectations, both EBITDA and PAT were aligned with analyst estimates. The company's overall Assets Under Management (AUM) grew by 7% sequentially to ₹52.1 lakh crore, matching industry growth trends. Equity net sales achieved an all-time high of ₹1.02 lakh crore.

Impact: The declaration of an interim dividend and a stock split are positive for shareholders, potentially enhancing stock attractiveness. The record revenue and steady AUM growth demonstrate CAMS's operational strength. However, the revenue miss might introduce some caution among investors. The stock has seen a year-to-date decline, suggesting market sentiment remains watchful despite these corporate actions. Rating: 7/10.

Difficult Terms: EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortisation): A measure of a company's operating performance that excludes expenses like interest, taxes, depreciation, and amortization. It helps assess profitability from core business activities. PAT (Profit After Tax): The net profit remaining for a company after all expenses, including taxes, have been deducted. AUM (Assets Under Management): The total market value of all financial assets that an investment company or institution manages on behalf of its clients. Stock Split: A corporate action where a company divides its existing shares into multiple new shares to lower the trading price per share and increase liquidity. Interim Dividend: A dividend paid out to shareholders during the financial year, before the final annual dividend is declared.