CMS Infosystems: Revolutionizing Business Operations with Innovative Solutions.

CMSINFO is seeing good results in the banking sector and has won contracts of INR800 crores across multiple business lines. The company is also expanding its AIoT business and expects to hit a revenue run rate of INR100 crores by the end of March ’23 – Rajiv Kaul — Executive Vice Chairman, Whole Time Director and Chief Executive Officer

Stock Data:

Ticker	NSE: CMSINFO & BSE: 543441
Exchange	NSE & BSE
Industry	BANKING AND FINANCE

Price Performance:

Last 5 Days	-0.53%
YTD	-9.14%
Last 12 Months	+13.07%

Company Description:

CMS Info Systems Ltd is the largest cash management company in India, providing end-to-end outsourced asset and technology solutions to banks and financial institutions under long-term contracts. Its services include cash management services, managed services, and others. CMS offers a broad range of outsourcing services to banks, financial institutions, organized retail, and e-commerce companies in India.

The cash management services segment includes end-to-end ATM replenishment, cash pick-up and delivery, network cash management and verification services, and cash-in-transit services for banks. The managed services segment provides banking automation product sales, deployment, and maintenance services, as well as Brown Label deployment and managed services for banks. The segment also includes common control systems, multi-vendor software solutions, security and automation software solutions, and remote monitoring for ATMs.

The other services segment includes end-to-end financial cards issuance and management for banks and card personalization services. CMS caters to a broad set of outsourcing requirements for banks and financial institutions in India, with a focus on providing long-term contracts and end-to-end solutions. With its extensive network of ATM points and retail pick-up points, CMS has established itself as a leading player in the cash management industry in India.

Critical Success Factors:

• CMS Info Systems Ltd. has demonstrated strong growth in their AIoT remote monitoring business. With over 20,000 live installations, their implementation is one of the largest in India. Additionally, they have won a prestigious order for their AIoT-based ATM security application for a large bank, which will be implemented over 15,000 ATMs. This success in the AIoT sector further diversifies CMS’s offerings and strengthens their position as a leader in the banking industry.
• Furthermore, CMS’s cash management business has seen impressive growth, with revenue increasing by 16% to INR338 crores in Q3. This growth has been driven by a trend reversal in currency usage, with usage in metros growing by 15% year-on-year, outpacing the growth in semi-urban and rural areas. With their expansive business network of 120,000 active points and the highest-ever quarterly throughput of currency at INR3.3 lakh crores, CMS is well-positioned to capitalize on this trend and continue to grow their cash management business.
• CMS Info Systems Ltd.’s diverse business segments continue to grow, with its share of overall revenue increasing from 29% to 35% in the last three years. In nine months of FY’23, the company has seen revenue growth of 36% to INR458 crores, with EBIT growing by 69% to INR93 crores. The company’s banking automation sector is focused on ATM network compliance, and CMS Info Systems Ltd. has won a prestigious order for its Algo software, an AIoT-based ATM security application for a large bank. With a renewed focus on expanding bank branches, CMS Info Systems Ltd. sees good growth opportunities over the medium-term.
• Finally, CMS’s strategic focus on execution of their large order book in FY’23 is a testament to their strong execution capabilities. With all key projects well on track, CMS is poised for continued growth and success in the coming year. This focus on execution, combined with their market leadership, expansion strategy, and commitment to compliance, further strengthens CMS Info Systems Ltd.’s position as a top player in the banking industry.

Key Challenges:

• CMS Info Systems Ltd faces various risks and concerns due to its reliance on technology and data. The first major risk is the threat of cyber attacks, which can result in the loss of sensitive customer and company data. CMS is responsible for managing and processing large volumes of data, making it a target for cyber criminals seeking to steal or exploit this information. A successful cyber attack can not only lead to significant financial losses but can also damage the company’s reputation and customer trust. CMS must invest in robust cybersecurity measures to protect its data and IT infrastructure.
• Another significant concern for CMS is the risk of technical glitches or system failures. As the company relies heavily on technology to manage its operations, any disruption to its systems can cause significant disruptions to its business processes. A system failure can result in data loss, delays in service delivery, and customer dissatisfaction, leading to a decline in business. Therefore, CMS must have a robust backup and disaster recovery plan to ensure business continuity and minimize the impact of any technical failures.
• Furthermore, CMS faces regulatory and compliance risks due to the nature of its business. The company is subject to various regulations and laws governing the collection, storage, and processing of customer data. Any violation of these regulations can result in hefty fines, legal action, and reputational damage. To mitigate these risks, CMS must ensure that it complies with all applicable regulations and invests in training its employees to handle customer data responsibly.
• Finally, CMS faces risks related to the management of its workforce. The company employs a large number of people to manage its operations, and any issues related to employee management can have a significant impact on the company’s reputation and operations. The company must ensure that it provides a safe and healthy work environment for its employees and complies with all labor laws and regulations. Failure to do so can result in legal action, financial penalties, and damage to the company’s reputation.