Computer Age Management Services Ltd (NSE: CAMS) Q1 2026 Earnings Call dated Jul. 31, 2025
Corporate Participants:
Unidentified Speaker
Auj Kumar — Managing Director and Chief Executive Officer
Ram Charan Sesharaman — Chief Financial Officer
Analysts:
Unidentified Participant
Masoom Rateria — Analyst
Prayesh Jain — Analyst
Devesh Agarwal — Analyst
Uday Pai — Analyst
Abhijeet Sakhare — Analyst
Madhukar Ladha — Analyst
Dipanjan Ghosh — Analyst
Sabil Dabhoya — Analyst
Sanketh Godha — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q1FY26 earnings conference call of Computer Age Management Services Limited hosted by MUFGIR. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Masoom rataria from muft. Thank you. And over to you Ms. Masoom.
Masoom Rateria — Analyst
Thank you. Good morning and welcome to Q1FY26 earnings con call of computer age management services limited before we proceed to the call, I would like to give a small disclaimer that this conference may contain certain forward looking statements about the company which are based on beliefs, opinions and expectations of the company as on date. The statements are not guarantees of future performance and involvement and uncertainties. A detailed disclaimer has been published in the investor presentation today from the management of the company. We have with us Mr. Anuj Kumar, the NBN CEO. Mr.
operator
I’m sorry to interrupt but your voice is breaking.
Masoom Rateria — Analyst
Hello.
Auj Kumar — Managing Director and Chief Executive Officer
That’s okay Masum, thank you. Your voice was breaking towards the end, but thanks for the introduction. Good morning everyone. Thanks for joining this one. Q Earnings call of cams. We will follow the standard format of taking you through a structured deck between Ramcharan and I which will last about 20, 25 minutes and then we will have enough time open for Q and A. You would have now access to the earnings deck. I will just give you a prelude just in terms of broadly how the quarter went and then launch on to taking you through the deck.
So broadly it was a quarter in which we did face some pressures on some headwinds and I think given the fact that the financial metrics are still looking very strong and I’ll get to them in just a bit. There’s been a great job done by the team to get us the results that we have. You are aware that because of telescopic structure we do face some pricing pressure as AUM overall expands. We also briefed you back in January 25th that in a large account we were trying to do a reset of prices just to bring them at par with the market.
And that reset was supposed to last the next three or four quarters. I think the good news is that that reset was almost complete. Over 90% of what fee, emissions, etc we had to give have been given in the fourth and the first quarter. So what you will see is a very marginal impact going forward and the results that you see, both revenue and bottom line, Amita and Pat are after doing almost 90% of the price reset in that large account. There is very little more to come after that. You’re also aware that in the first quarter we typically take a cost expansion largely led by salary increases, increments and those kind of things and wherever we have annual maintenance contracts, wherever the price goes up.
So all that is on the base now, which means all that impact has also been taken from a 1Q perspective after all of this, which means some impact of telescopic pricing setting right about 90% of the price emissions and taking them in the base. All the expansion in cost largely led by salary increases for the year. And the last thing I would say is that specifically from a capital markets perspective you are aware that the KI business, not just for camps but across the industry has been impacted given everything which has been happening, including the smaller number of new accounts that are being opened for FNO and regular trading, bmat, et cetera, also in mutual funds.
So our KI business from a year on, year and a quarter on quarter perspective did see some contraction. All of this having happened in the quarter for the quarter you still see an EBITDA percentage which is north of 43% and a PAT percentage which is just short of 30. And I think this indicates the resilience of the model that we’ve had. Quarters if you go back to second and third quarter last year we had tailwinds across the board, mf, non MF cost, all of that. And I think despite being some headwinds that I stated about, most of the which were known bringing in the kind of financial metrics that we have posted, especially on the profit line.
But across the board, if you look at financial metrics on a year on year basis we’ve had, I think we’ve kind of delivered an ACT which is pretty strong. So that is something I wanted all of you to know as a preface. I’ll jump onto the main deck and I’m on the chart on business highlights. Very pleased to share with you that for the first time in history we crossed 50 trillion or 50 lakh crore of overall assets. Must also say that in July this did inch up to about 52, sometimes 52.5 and we’ll see how the rest of the quarter lasts.
But 50 trillion or 50 lakh crore was a significant achievement to be retained market share with 68% by AUM. At the same time our equity assets surpass the 25 lakh crore mark. Again, if I look at July, these have been hovering in the just short of 27, which is between 26.5 and 27 lakh crore. And inflows continued despite all the volatility and just a plethora of news items that were coming in. So that again from a foundational metric perspective, a very strong act. Overall, AUM across businesses in mutual fund grew 22%. Equity assets grew 24% which was ahead of the market, which is again good news.
New SIP registrations year on year were oversold for about a crore and 12 lakh. These increased 19% market share jumped up for new SIP registrations by 6 percentage points. Typically it’s a very tough act to continue posting this kind of market share increase. So we’ll continue keeping you updated on what happens to it in the ensuing quarter. But for that one quarter it’s a significant gain in market share. Live SIPs, these are SIPs which are live and which get the monthly collection which basically adds to gross and net equity sales. That number grew 15% year on year and market share improved from 57 to 62% which is again a very significant jump up.
Unique investor base crossed the 41 million. So it’s about now at 4.15 crore. Grew 27% year on year faster than the industry which grew 22%. So if you see the collectivity of foundational metrics, which is Gross assets crossing 50 lakh crore, equity crossing 25. AUM growing 22. Equity assets growing 24%. New SIPs significant up in market share. Live SIPs significant up in market share and investor base which grew faster than the market. I think all of those are great redeeming features for the quarter. Also the fact that you know that we have won a slew of contracts, new AMCs in about the last 14, 15 months.
Seven of them were waiting to go live. Typically in the past we used to take about one or two AMCs live in a year. The good news is that three of these are already live, including Geo Blackrock which did its maintenance. This was not in the first quarter. Theoretically the numbers came in the second quarter so you don’t see them in the results. And they garnered about 18,000 crore rupees in the largest in what was the largest in the industry. The balance for new ANC’s are slated to go live in the next three to six months.
We also took C Bank which is the first official I would say national client and Asset management live during the same period. So they are live and working on the CAMS platform. That’s across the board on the and again I would say that just from a foundational perspective, each of these can be straight away correlated to revenue bearing metric and therefore will help the story play out in the coming quarters including starting with the second quarter. Beyond mutual funds, GAMS pay, although from a quarter perspective wasn’t very strong but 26% year on year growth. The payment gateway infrastructure card has become operational now, so slightly delayed but will continue to kind of buttress the revenue growth from now onwards.
So Gamsplay grew 26% and the payment gateway went live. Alternative continued to solidify its market leadership. We got 24 new logos like you know these are full service logos. I keep saying none of them is a truncated service. 50 new mandates, three new clients in Gibbs City Overall AUMF client service funds crossed 2.7 lakh crore during the quarter which is great news. Insurance policy count and I’m sure you’ve been reading about this in other newspaper articles. Nothing to do with CamSpere but in general the acceptance of repository is gaining ground without any bulk. So this is largely consumer led.
That consumer led metric has seen policies grow year on year and again it has a straight revenue bearing metric for the coming quarters. Also do keep in mind that while LIC signed up with us in March, we are still not live expected to go live in the September latest October timeframe. So you can expect, or at least I’m expecting that those 40% growth in policy based numbers should be repeatable given that whatever tailwinds we have that area we have consumer preference for holding DMACC insurance policies is going up and with LIC with the market leader participating at some time that momentum across the board is expected to go up.
You would have also seen an announcement on 29th just two days a day or two back that CAMS KRA has entered into a definitive agreement for acquiring the KRA business of what is called dottex in common parlance. Do keep in mind this is like a slump asset sale so we’re not bringing in the infrastructure or large count of employees or rents or leases etc. This is largely the inventory of banks goes up on a base of 2 crore banks that camps. KRA has the size about 1314 lakh. So straight away accretive to revenue does that brings in very marginal cost which is rebalancing for three or four employees and getting out of the leases.
We won’t be using the data center et cetera. All of that just come and sit on the CAM system that is a transition part. So this is something we’ve been working on for some time and again coming from the NSE stable is great accretion to the overall KRA business and will be significantly revenue accretive by very marginal cost. A small fraction of the cost will come to US CAHSCARE otherwise broadly continued to onboard strategic clients. The good news is that one more of the top five brokerage houses, you know that we started breaking into bps and brokerages in about the last 30 months.
We’ve broken through one more otherwise the aggregate new logo additions is 40 large, medium, small, all kinds. And then also wanted to say that in all this I think we said got a POC leading to a contract of an AI powered insights platform for a US health tech firm, you know that Think traditionally has had experience and expertise in the in the molecular research area for drugs and therefore have some recall and some proximity to that segment of the US market. So they’ve started work on this. Of course it has to scale up to become a regular large science contract.
How this part goes in the ensuing four or five slides you have content on everything else that we’ve spoken about in the past. I’m not going to spend too much time on this. The charts are there. Take a look and let us know if you have any questions either now or later. As you’re in touch with us with this, I’ll hand this over to Ramcharan to take us through broad financials and then we’ll be ready for Q and A Ram over to you.
Ram Charan Sesharaman — Chief Financial Officer
Thank you Anuj. As Anuj was mentioning, we had some headwinds during the quarter, some of which we had already alerted you in the earlier part of the year in terms of the price movements and the salary annual salary increase that happens traditionally in the April 1st effective April 1st. So you know. But the good news is that from our trend perspective the market has in spite of choppy market cell, the market AUM has grown. It’s grown over 7% on a quarter on quarter basis. Which means from a foundational perspective it all goes well for the future revenue growth.
Equity is also done well. It’s grown around 24% on a year on year basis on the back of which we had A reasonable revenue growth on a year on year basis, overall revenue grew around 7% and we were at around 355 crores of revenue. Asset based revenue grew 2% quarter on quarter and almost 9,9% year on year. Again, this is considering the impact of the price difference or price reduction that was given to one of our key customers. From a yield perspective, I think Anuj has given the commentary. I’d just like to add that we had guided that there could be a 4 to 5% reduction in yields in the current quarter in addition to what you saw in the last quarter.
And it’s played out on similar lines. We have seen a close to 5% decline in yields. But going forward, as we have taken most of the impact in the base, we expect that, you know, barring telescopic, there is not going to be any significant depletion in yields going forward. And you know that from if you see the math. On a five year average basis, my telescopic depletion has been around 3 to 3.5% per year. So you should expect a closer or lesser to that going forward. In terms of yield depletion, however, because the first quarter has seen a sharper yield depletion than usual on a year on year basis you could see a 9% kind of a yield depletion but the next three quarters would see a very, very moderate decrease, if at all any.
In terms of yield depletion from a profitability perspective, you’ve seen that the costs. We have said that we have some levers in case of some strain on the revenue and we said that we will pull those levers and we have done exactly that. We have seen cost control measures bearing fruit. We’ve had a very muted increase in cost on a year on year basis, including depreciation, which we continue to invest on various data centers and storage and servers, including depreciation, our overall cost increase on a year on year basis is less than 11%. So our aim for the year is to keep it around that range, probably 1 percentage higher but to much less than what it was in the past.
And on a quarter on quarter basis you will see that the cost has actually declined even if you take away the OPE decline. I think and if you consider that this is the quarter in which the salary has increased seen a very, very muted increase in costs, which again is the way forward for us in terms of increasing the profitability margins. Again given all these segments, the margin still was at 43.7 percentage, a little down on a quarter on quarter basis. Year on year basis. But again traditionally the first quarter has seen the maximum strain on margins and as we go further this kind of gets normalized.
And while we are maintaining our guidance of saying that we will see around 45% of margin on a steady state basis, there is a little upside in terms of the current quarter. We did not expect a close to 44% margin but going forward I think we should be able to hit the 45 plus percentage EBITDA. Obviously assuming that the assets do keep up the pace of growth that we have seen in the last few quarters, we have ended the quarter with a very very comfortable cash and cash equivalent of 788 crores out of which 90 crores dividend was dispersed in the current month post the shareholder approval and the board was pleased to declare an internal dividend of rupees eleven per share.
So this is a summary of the. Financials and with this I hand it back to the moderator, we can open the floor for questions.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue you may press Star and two participants are requested to use handsets while asking a question. Ladies and gentlemen will wait for a moment while the question. The first question is from the line of Prayesh Jain from Motilal Oswal. Please go ahead.
Prayesh Jain
Yeah, good morning everyone. Firstly, on this yield part, while I understand that the adjustment of the one big renegotiation has happened, any further renegotiations that are expected in this year or early of next year that can impact the yield further? That’s first. Second, on the yield front itself, as these new customers, particularly Geo Blackrock kind of scales up, do you think that your yields can be under pressure? Because what we understand is most of these new wins have a very low fees in the initial part, in the initial two or three years. So yeah, that’s my first question on the yield front.
Second is on the, you know, the non MF businesses, you know, particularly Camspay, which has seen a sequential decline in this quarter. What would you attribute that to and how should we think about this? Yeah, probably. And thirdly on profitability between the MF business and non MF business. If you could spell out the EBITDA margins both ways, those are the question. Thanks.
Auj Kumar
Sure. Thanks. Fresh. So I’m sure you appreciate that our guidance with respect to prices, yield depletions, et cetera, plays out almost exactly the way we predicted for you in the last four or five years, which is that we don’t want any asymmetry to exist between what we are anticipating in terms of events happening and what you see. We believe that with this large contract, 90% of that adjustment being in the base for the next about between a year and year and a half, there’s nothing else, nothing much else to be dealt with. They could be very small events.
But from a large price correction perspective, I do remember that we were the first ones to indicate this in the month of January. So from a price perspective, like RAM said, about a 3% annual depletion is something you can estimate to be in the base and nothing much beyond that except the balance 7, 8% of this price adjustment will you see coming in. That’s point number one. Point number two from a new AMC and GEO blackrock perspective, yes, a large number of them have now are going live and will go live. Typically their accretion to overall fees and overall profitability, etc.
Is small. In the case of BlackRock, their ambitions are very large. So we will see how that scales up over a period of time. It is not true that we have given some very large price remissions. Typically one or two of these elements are given at more, I would say competitive pricing. But it is not that we have done anything very significant for these new logos. So we will see how this goes. Typically our expectation is that the AUM build out of these new ANC is very slow amongst the new ones takes several years, four to five years for them to scale up.
So for them to have any material bearing on the PNL of CAMs always takes time and I don’t think a lot of that is going to change perhaps with the exception of geo. So that’s point number two from a camps pay perspective, what you see. So you, you will appreciate that on a basis we are 26% revenue up, which is good news from a quarter on quarter basis there were some volume reductions in insurance insurance, you know, peaks in the fourth quarter. So whatever activity, heightened activity the insurance companies see, we partly mirrored that because all of this is subset of the, you know, the payments part of the insurance business, including autopay.
And we are expecting some of that to come back as the first and second quarters progress. There were some lower volumes from key clients. One, largely because we are trying to migrate that very large MF distributor from other alternate platforms to our platforms, which means that the existing ACH mandates, et cetera, have to move from place A to place B where we Had a plan. The execution has been slightly slower just given the multiple dynamics in migrating these ACH mandates. But all of that will happen. And the third is that, you know, the growth, the setting up and growth of the payment gateway business was slightly slower, was about two or three months lower than what we were thinking.
So our expectation is that from this quarter, the quarter that we are sitting in, July, August, September, you will see build back into the camps pay business and therefore any wrinkle that you saw from 4 to 1Q was a temporary wrinkle. And it’s unlikely that you’ll see anything like that in the ensuing 3/4 of the year.
Ram Charan Sesharaman
The only one question that was on the possibility of non MF and MF, I think they continue to be on, you know, what we used to be, the non MF profitability as we said, is always between 10 and 15 percentage. They were a little lower set on this at 12 percentage probably in the current quarter. MF continues to be, you know, 45 plus percentage. So that’s the split up on the MF, not MF, not with probably a little lesser this time. Keep in mind the overall company margins are a little lesser, but nothing that’s swung it either way.
Prayesh Jain
Really appreciate the kind of guidance you have been giving us on the yield trend and the way it’s panning out. Thank you for keeping us updated on that.
Ram Charan Sesharaman
Thank you.
Auj Kumar
Thanks Prince.
operator
Thank you. The next question is from the line of Devesh Agarwal from IIFL Capital. Please go ahead.
Devesh Agarwal
Good morning everyone and thank you for the opportunity. Just further clarification on the yield part, sir, if you can tell us X of this larger EMC where you had the repricing, what would have been the impact on the yield for us?
Ram Charan Sesharaman
So Devesh, if you see the Yield depletion was 0.12 bids I think and the bigger AMC actually contributed 0.09 of it. So it’s almost predominantly everything that that’s kind of the way that has played.
Devesh Agarwal
Out to 75% is because of that repricing.
Ram Charan Sesharaman
Yes, yes, that’s correct.
Devesh Agarwal
Right. And you did mention there’s no more repricing or 95% of this large AMC repricing is in the base. But when you say there are no more repricings are expected, are you saying like over the next three to six months or for the next two years, how should we see about it?
Ram Charan Sesharaman
Well, let me clarify that. You know, it’s not as of no repricing. Meaning when I say repricing, I mean usual commercial negotiations Post the end of the pricing tenure will happen and that’s business as usual. What we indicated was that there’s not going to be anything major that’s going to come around and this is probably for the next two years you will see stability on this and I’m not saying you won’t see stability post that but I think we have visibility over the next 18 months. 18 to 24 months.
Devesh Agarwal
Right sir. And when you use a guide for this three three and a half percent depletion beyond FY26 I’m assuming you’re accounting for all these new ANC’s and they gaining size including Jio, BlackRock or that will be over in above.
Ram Charan Sesharaman
So as Amit was mentioning. Right. I think if you look at our asset base it’s almost like 52 trillion, 53 trillion etc. So I think the new AMC’s ability to adversely or positively affect yields is very limited. So I think we are confident of retaining within the overall guidance that we have given.
Auj Kumar
From a mental perspective they will just think of it this way, that today when you see the asset base of 50 lakh crore, under 2% of this belongs to AMCs which were launched in the last five years. Which means whatever was launched in the last five years is significantly below 1 lakh crore. So either way price or any other growth metric what what you would expect in the next four to five years although the number of bills is very large, that at most we will see about let’s say 2 to 3% of AUM contribution from these people and therefore their collective ability to swing the P and L either way I think is very limited.
So I will hold whatever I’m said that beyond the next 18 to 24 months the 3 3.5% depletion is perhaps something which stays in the base because that is an outcome of telescopic and some element of negotiation. This was one large element that we had to set right. The dialogue was old. If you ask me it’s a good thing that we got past that event. It took us some time to get past it and given the fact that all of that has been now written on the base largely between 4Q last year and 1Q this year the cost has been managed well and therefore our ability to be a lot more predictable and accretive in the coming quarters is much much higher.
Devesh Agarwal
Right sir. So with this repricing sir that has happened, can we say at the end of 1Q your top three 4AMCs will have a very similar pricing will Be in a very narrow band or tight band.
Auj Kumar
Yeah. So if you see our spectrum of 22 clients there is a lump of five at the top which is consistently priced. There’s a lump of another 6 which is the MC number 6 to 11 and which are also in the similar band. So that is pretty consistent. And then as you go down, although those are smaller people but yes there are these three subgroups that you can think of the portfolio in and they are all very tightly packed.
Devesh Agarwal
Sir. And one last question sir on the. Non mutual fund business if you can again share your views in terms of the growth that we expect, what do you say next two, three years and the margin how we intend to ramp up and what is the share that you expect of non mutual fund business in your overall revenues in say next two to three years? Yeah, that is the last one.
Auj Kumar
So no Rashti, so like we said in the past we will get the anonymous portfolio to 20%. No questions about that. Inside of non MF there are very strong, strong points which is KRA payments and AIF which are significantly profit yielding and then there are elements which are not making money which is account aggregated insurance although insurance is getting somewhere towards breakeven but we are funding some of these things and then between think Fintukul, Ms. Central etc. We are still funding some of those things. So the normal business at the peak will be let’s say 35 to 40 EBITDA in the best and at the bottom maybe minus 10.
This is why it converges at about plus 15. I think what is at 40 will probably remain at 40. What is at plus 30 will remain at plus 30 and we are happy to keep those businesses there. The trick is to get the -10 -50 guys over the hump and get them to positive territory. And I can tell you that for example in insurance we are seeing that let’s say 25 to 27 maybe 30 crore revenue we will get to positive and account aggregator at about a 1011 crore revenue. We will get to positive in most platform businesses which have small labor.
That’s one of the fixed costs that we deploy between 10 to 15 crores. What I’m very positive about is that pouring more revenue into insurance, into account aggregator and business think NMS Central and MF Central is also not very far although we’ve been funding it for the last four, five years but we are very sure of getting to that point. So therefore 20% overall revenue contribution getting in the next three years non MF aggregate to be let’s say between 25 to 30% profit contribution and not between. Not around the 15% is really in the realm of reality.
You can expect that to happen.
Devesh Agarwal
Perfect. Sir, thank you so much and all the videos.
operator
Thank you. The next question is from the line of Udaypal from Investec. Please go ahead.
Uday Pai
Yeah, thank you for taking my question. Just one clarification on the yield side. So you mentioned that out of the 0.2 basis point depletion this quarter, a large part was or account out bat single anc. So. So the remaining was purely on account of telescopic pricing or did we have any other repricing from any other customer? That’s the first. And secondly, I would like to know the breakup of KYC revenue in terms of brokers and AMCs. So that’s the two questions.
Ram Charan Sesharaman
Sure. The first question, there is just one more customer who had a very small price reset that happened. So it was not significant. So you could consume. You would assume that a lot of this is because of the telescopic pricing. Again, as we said that going forward that could be zero price research will happen. No, when we say price research, it’s not a significant one. Every time there is a rollover there is some discussion that depending on the growth of the AMC there could be some, you know, moderation in rates that could happen. So I think that’s a BAU kind of event that has happened.
So. So nothing significant from that perspective. So predominantly it is the major customer yield location that you are seeing. The second part of it are if you see from the AMC to brokers perspective, around 30% of the KYC revenue will be from the brokers and VP’s perspective and 70% will be from AMC. And that is a metric that’s been trending upwards over the last few quarters.
Uday Pai
Sure, sir. That’s it from my side. Thank you.
operator
Thank you. The next question is from the line of Pijit Sakare from Kotak Securities. Please go ahead.
Abhijeet Sakhare
Hey, good morning everyone. I have just one question on OpEx. So this quarter, generally what we’ve seen for the last few years is that, you know, the first quarter Opex is roughly around the 25% mark as a percentage of overall OPEX for the year. So should we assume that to continue. This year as well, which automatically implies that, you know, the OPEX number broadly kind of settles at this level. Yeah. So any color on that would be helpful.
Ram Charan Sesharaman
So I’ll just split it into three. Right. So the major cost, you know, is the employee cost. Then there is the Operating expenses and other expenses on an overall year on year including depreciation. We have been probably between 10 and 11% growth in the current quarter which I think is a very moderate level. Now going forward, given the nature of the business, we do not see significant, significant addition in manpower that is happening. So we should actually have some cost increases happening from an employee perspective. But it will not be significant because the appraisal cost has actually been baked into this operating expenses, you know, is colored by op, right? And if you see in the current quarter also there’s been a reduction OP in the revenue as well as cost.
But if you take it away it continues to be around 13% of overall thing and other expenses are the first quarter. We’ll see the maximum because of AMC renewals, etc. So while we do not foresee any big increase coming up in the remaining part of the year on any of these exceptional things coming up any of these things, I continue to hold the view that we should be able to cut contain the cost increase at around 11 to 12 percentage worst case scenario or probably little less than that on a year on year basis for the entire year.
Whether it will be following the trend of first quarter, I think it will be with a small increase here and there because of, you know, some, some amount of employee additions that will happen. But overall if I were to project a cost increase on a year on year basis for the entire year, I would like to keep it at 10 to 11 percentage.
Abhijeet Sakhare
Got it. Thanks Ram. Secondly, the non MF businesses put together. I mean there are various ebbs and. Flows across the business lines but on. A full year basis for the entire. Non MF vertical put together, how do you think about this year’s revenue growth given the first quarter, how it has. Panned out for a couple of business lines.
Ram Charan Sesharaman
So I think Anu mentioned the reasons why the first quarter on a year on year basis I continue to see a reasonably good growth. So our aim is very clear and we have the roadmap to achieve this 25% growth in non MF revenue. Right. On an absolute terms we ended last year around 190 crores of non mutual fund and would be able to add 25% on top of it. I think we have the path to do it. I think we have the way to do it. So we stick to that guidance that it will be a 25% growth in non mutual fund on a year on year basis.
Abhijeet Sakhare
Thank you so much and all the best.
operator
Thank you. The next question is from the line of Deepanjan Ghosh from City. Please go. The current participant has disconnected so may I move to the next next participant? The next question is from the line of Madhukar Lada from Nuama Wealth Management Ltd. Please go ahead.
Madhukar Ladha
Hi, thank you for taking my question. So first, you know, really appreciate the upfront guidance on the yields. I think that was so very well done and very clearly explained. My question is, you know first, how many of the mutual fund customers and the large ones come up for renegotiation in the balance part of FY26 and FY27? If you can just sort of break down for FY26 how many are there and then FY27 how many of the customers do. And second question is on any guidance on CapEx for FY26 and 27 and the update on the technology transformation that you’ve been doing and moving the AMC stack on cloud.
So I wanted to get a sense of where are we and from next year onwards what sort of benefit it would result in in terms of our EBITDA margins and how should we also think about depreciation going forward. So these two would be my questions. Thanks.
Ram Charan Sesharaman
Okay, I will take two of this and on the rear probably I would request Anuj to add some views on this. See from a price reduction perspective the answer is any major coming up for innovation current year the answer is zero. Nobody is coming up. And for the next year towards the tail end that could be one or two customers who come in. But again it’s towards the end, tail end of next year. So you will, that’s why when we, when we kind of stick to the earlier question that we do see some amount of stability for the next 18 to 24 months.
I think one of the reasons was this which is that you know, last year has seen a poor activity in terms of prices and so we will see a period of stability for the next 18 to 24 months is our expectation. Right. From a CapEx perspective you will see that I split into two. One is obviously the regular CapEx that we do given that we have to keep pace with the growth in transaction volume, with the requirements from SAP perspective from data centers, etc. VCB etc. So that on a yearly basis we project the current year CapEx to be around 60 crores.
We have spent around 15 crores of it, so we’re on target in the first quarter. So we will end up spending around 60 crores plus or minus a few crores. That’s the expectation on the rear or the new Platform perspective and that’s where the bulk of the capex additions would get added once the modules start going live. On a few cumulative basis we have spent around 50 crores on the platform so far. And I say cumulative, I mean for the last more than a year. Right. It’s not in the last quarter. Last quarter we would have spent probably 14 crores on it.
So once the first module starts going live, which we expect probably 4Q of this financial year or 1Q of next financial year, we will start amortizing that and the amortization, we expect that the yearly amortization of the first module we would have spent probably 100 crores in the first module and the yearly amortization will be in the region of 15 crores plus. Right. I think that will be the yearly amortization that you take. So that will be the increase in depreciation cost that you will start getting from most likely from next financial year or pair of it could be in the last quarter of the current financial year that will start impacting depreciation from that perspective.
But we are also confident that the benefits that will start accruing to the business will start off make it, you know, over a period of at least not immediately over a period of a year or two, I think the payback will be more than adequate for people to see and the margin depletion will be negligible, if any. Over a period of actually the projection shows the margin depletion will be negligible and if you do get outsized benefits, as we hope we will, then I think it will be accretive to the margin. But it’s too early to call a specific number as what could be the benefit in the EBITDA margin because I think we have to wait for the first quarter to go live.
We do have internal budgets and workings, but I think it’s too early to expose that as a coming from our side. We will track it very closely and as we get closer to the first module going, we will be able to give you a better picture on what is the benefits. But we are very clear that this will have a positive impact on the profitability going forward, whether it is going to accrue directly from FY20 or from FY28 I think something that we have to wait and watch. But overall it’s going to be very beneficial to the margins on the progress of rearc.
Auj Kumar
So overall on the rearchitecture project I think things are in very good shape. We signed a contract in June, July last year with Google Cloud, we started building a team. So today we have over 150 engineers, about 170, 180 external hires. A lot of them from, you know, blue blooded institutions like the IITs, some MTACs, four or five doctorates, people who are applying for patents. Because some of this is very structured and we know what is to be done and some of that is from a tinkering approach in terms of experimenting with various things. And I think you will start seeing some announcements from us in about maybe by the end of August in terms of what the team is doing.
We haven’t done any PR yet, but just to give you an example, the amount of efficiency this will add, one is just to the engineering, coding and platform process and the other is to the operations process. Just to give you an example today, we may have a couple of hundred people today who do reconciliation for us because we download bank statements, do matching in the the system and do literally hundreds of activities to make sure that the 300 lakh crore that traverses our system is completely pristine and done properly in terms of reconciliation unit allotment, once an automated platform of the kind that we are thinking comes in, the intensity of labor will go down to half.
Or less than half. Similarly for every process, we signed 300 crore SMSs in a year today. For if one or 100 of those SMS’s have to be reconciled, when were they sent, when were they opened, if they bounced, why did they bounce? There is a lot of manual effort in trying to figure that out. All of that will be at a click for a button. Similarly for analytics, controls kind of things, risk management, all of that will get into the purview so of the new platform. So very happy with the way things are going. I think we haven’t exactly yet put out any margin workings.
I think what you guys are waiting to hear is that will this become kind of a cost zero proposition in FY27 and if yes, by what margin? And my guess is that we will be ready to share all that with you in the next maybe three or four months. There is just a vast sweet of areas in which productivity will go up, accuracy will go up, rest will come down, finance will go up and we do want to talk to you guys about that, but we don’t jump the gun. I think broadly from an operating perspective, very good progress.
From a specific guidance on margins and net cost on this, give it another two or three months, maybe by the month of October we will start putting things out which you guys can consume and then obviously we can continue comparing. No. In terms of whether that progress is achieved or not.
Madhukar Ladha
Got it, got it. Just Ram, I think you mentioned the maintenance capex for FY26 at 60 crores but I don’t think you gave me like the total sort of other capex amount as well. So the total re architecture capex for 26 and similarly if you could give FY27 also some broad color on capex.
Ram Charan Sesharaman
Sure. So yeah, I think from a react perspective I did mention that we have spent from a capex perspective around 14 crores in the first quarter in Q1 and expecting the course of the year this will accelerate and we will spend close to 100 crores in the current year. The spend next year will be on similar lines. The spend next year will be on similar lines because we have reached almost like a peak capacity from a people perspective and from a design perspective. So you would expect overall the cost of the project is expected to be around 450 to 500 crores.
So you will end up spending by the end of this year it will be around cumulatively around 125plus crore. So we expect a similar amount to be spent in the next year also from a depreciation perspective. I would just like to alert that once we start amortizing this, which should be after the first module goes live, probably 100 crores of cost gets transferred from work in progress to your asset and we start amortizing. Obviously amortization period could be higher than three years because it is going to be a very valuable platform. So that’s why I guided that probably you should look at a 15 to 20 course depreciation incrementally per year on the.
Madhukar Ladha
Understood, Understood. All right, thanks. Thanks a lot for the responses and all the best.
Ram Charan Sesharaman
Thank you.
operator
Thank you. The next question is from the line of Deepanjan Ghosh from City. Please go ahead.
Dipanjan Ghosh
Hello. Am I audible now? So good morning. So there’s few questions, you know you mentioned on the reduction in pricing asymmetry on the mutual fund side of the business and I understand, you know there have been couple of repricing by this large player in the last few years but let’s say two years out, you know, 24 months from now when this particular player looks at this, you know, mutual fund RTA yields and let’s say on the more dominant portion of the book, which is equities, you know, do you think that they will feel comfortable when they compare them with the other large three or four players, let’s say 24 months, 36 months from now.
So just wanted to get a quantum of whether the repricing and the stabilization is done more from a long term perspective or is it just like relative divergence have narrowed for now? Second, in terms of the nature of these contracts, I just wanted to understand, you know, are these open for ad hoc repricing also? I mean, if can a particular player always come up for renegotiation even if the contract is currently ongoing? And third, will be on the alternate business. If I look at the revenue transaction for the last four quarters, it has revolved around that, you know, nine and a half to 10 crores quarterly run rate despite multiple new logo wins.
So just wanted to get some sense of what’s happening out there.
Auj Kumar
So broadly. To answer your first question on whether the. And sorry, when I said asymmetry, I meant what vibro versus what you. You guys know we want zero asymmetry there and feel happy that we’ve been able to kill that. The mutual fund market typically honors contracts and out of turn requests for adjustment. I mean it’s not that it’s impossible, but don’t happen very often. So broadly from a principal perspective, you can take it back. That’s the way the market works. From this contract that we have discussed more than once on these calls, I think our way of servicing, when it was a world of physical paper and checks and all of that, it had come to almost 90, 95% digitally executed operations.
And therefore the request from the client was that since whatever they paid in the past, they paid in the past because of a different style of working, now there’s a style of working after Covid is more or less the same, why not look at a uniform pricing? So while you can say that it was out of turn, that dialogue started maybe in 2122, it took us two or three years because it was a large quantum to set right. And like I said, I’m happy that. That is not behind us. With that being behind us, I think what one principle that most of these clients believe should apply to them because scope differentials are very small, there was a time when scope differentials were deeper. We were doing ABCDEF for someone, we were doing ABCDEF and GH for someone else. So someone else had 30% more scope, was willing to pay. The answer was yes. And that’s how the market went. In a digital era, there could be a client who does 100% digital and they could be someone who does 85%, but I don’t think we have any 80% digital client.
So the kind of work, the amount of work more or less is converging and therefore parity becomes an argument from their side and parity in a size cluster. So if you are in a size cluster of the top five, the next five, the next five, the next five and the tail beyond that. Do we look similar is a requirement. You guys also have access to Scheme accounts so you can take a look yourself from our side. I think one thing that we’ve done now is that anything which can look like a wrinkle in that principle largely does not exist.
You can also take a look once these chemo cards come out. So I think that’s one large objective that we have achieved. And we also made sure that in some of these new clients you may have seen one logo that we had one, let’s say at a price of 100, the competitor had offered 80 rupees and then walked away saying he doesn’t want to cut. Three months later the same guy goes back and sells that 60 rupees. And we’ve said we’ll let them go. We said we’ll let them go. We will not talk about, you know, repricing, etc.
With someone we’ve not even started business with. So I think that principle we’ve been able to establish and underwrite quite well.
Ram Charan Sesharaman
On the afr, the Panjan actually if you look at the core AF business, I think they have grown pretty well. I mean year on year basis I think they have grown if you take away the principal size of things only from including Gift City they were actually I was just looking at the numbers once you asked the question. They were actually around 840 lakhs per quarter in the last 15 years. They have now come up to around 970. So pretty okay, meaning it’s not going to be a 50% growth business. I think that we have been very clear with you also.
I think a 12 to 15% growth business is what we think AIF to be and upside coming in terms of Gibbsity. I think it’s played out that way. We’ll continue to feel that it’s a 15% growth business. It’s still a 50% growth business and if gibcity does ramp up significantly then that could grow closer to 20%. But otherwise, you know, we feel that it’s probably largely in line and it’s a highly competitive industry but we still make it our leadership portion. We’re getting 50% plus market share and AIM has also grown reasonably okay.
Dipanjan Ghosh
This one small follow up, you know I appreciate, you know, on the AIF part it was lower in the last quarter base but if you look at from 2Q onwards, which is last four quarters, it has been around that 9 and a half to 10 crores. So in case, you know, you were to get to let’s say 15, 16% growth on last year’s base, you probably have to kind of scale up the current run rate by at least 10, 12% over the next few quarters. So is that visibility kind of out there for you guys?
Ram Charan Sesharaman
Absolutely. We are winning a lot of new logos. I think we also have a lot of logos from the city perspective. We are also getting more into fund accounting. So I think we are confident of Getting this over 15% growth over a period of year. I think on a quarter on quarter I think it could be 10, 11, 12, that’s okay. But on a year, on year basis I think we are confident getting to the 15% growth. The new logos that we are winning are for full service as Anuj was mentioning. And the pricing is largely, well, it is not what it used to be two years back for sure.
But I think we are getting a reasonably, you know, stable pricing for at least, you know, compared to what it was in the initial stages. So I think 15% growth is something that we aspire, but I think we have, we have ability to get that.
Dipanjan Ghosh
Got it. Thank you everyone and all the best.
Ram Charan Sesharaman
Thank you.
operator
Thank you. The next question is from the line of, from Unified Capital Private Limited. Please go ahead.
Sabil Dabhoya
Thanks for the opportunity and congratulations on. The resilient setup numbers. So I just had one question first on the yield part, sir. So in the last quarter we had given A guidance of 6 to 7% YUI decline from a 4Q FY25 end yield. And this had been now sort of Revised to about 8 to 9% is my understanding correct.
Ram Charan Sesharaman
So I think what I had indicated in the last earnings call, if I remember right was yes, it was around. I think on a year on year basis you will see a 7% decline in yields. I think it will be a little higher than that. It could be 8%. But again this is an estimation of what happens in the remaining three quarters. So I think the range is broadly. Okay,
Sabil Dabhoya
okay, okay sir. And another question was on the MF. Non asset based revenue. Just if you could highlight anything unusual that happened this quarter.
Ram Charan Sesharaman
So two things actually, three things. Number one is the NFO revenue, you know, significantly down compared to the last quarter. And that’s something that we have limited. There are more NFOs in the next quarter we do get additional revenues. The second part of it is, you know, OP expenses. And we’ve always said that, you know, OP is more an accounting thing, which is that you have to show that you build a customer, you show that it as revenue and then you show it as expense. Also that’s come down significantly largely because of the lesser mail traffic and some special audits that we did on behalf of AMC’s last quarter and some bulk purchases we did for their stationary, etc.
All of it actually the OP has come down a sequential business, more than 2 crores. But that’s something that should not worry, doesn’t worry us for anybody because, you know, that’s a corresponding reduction in the expense. Also, it’s not a margin accretive business. There is some amount of, you know, when you say price reduction of the amc, there is some amount of impact of price reduction on the transaction fee also. But overall the transaction fee has remained broadly stable. There has been some reduction in OPE and NFO fees, etc. Which has kind of crossed this blip in quarter to quarter number.
But there’s nothing exceptional that you need to know. This OPE is something that you know, entirely driven by the spend pattern of the particular quarter and depending on campaign campaigns that ANC’s are running, depending on audits that we need to do which are reimbursed by the clients, etc. Or some, some of the stationary expenses. So that’s predominantly causing this difference. This is a two and a half crores and reduction quadrant quarters only because of op.
Sabil Dabhoya
Okay, thank you so much.
operator
Thank you. The next question is from the line of Sanket Goda from Avendus Park. Please go ahead.
Sanketh Godha
Yeah, thank you for the opportunity. If I understood it right, you are at 2.16 BIC yield today. So every quarter for the full year it is 3.3.5 percentage. Is it fair to say that 2.16 yield will be maybe every quarter, kind of 1% depletion to arrive at year of 3 to 4%. Is that a fair assumption?
Ram Charan Sesharaman
Yeah, I think the next quarter could be a little higher as we said. But you know, post that, I think that could be. We are actually in my computation around + transaction of 2.25 only on AUM or on 2.13, 2.14. We would expect at least 0.03 or something decline coming in the next quarter. But yes, overall I think your assumption is valid.
Sanketh Godha
Got it. Perfect. And my second question is with respect to payment business, if you can Break up that payment business into MF and non MF point number one. And second, even insurance played a role to drive the growth. And now you are getting into the cards as a payment gateway and given it is highly competitive, how do you see it to play out? Whether we will still remain predominantly MF and maybe insurance a bit or you think we will make meaningful inroads in cards with respect to payment.
Ram Charan Sesharaman
So we have, as you know the history historically it’s been entirely mf but over the last few years we have diversified successfully. My current recollection is it’s around 50% plus MF and you know 45 to 50% of non mutual fund is the split up of the revenue. I don’t get the exact number across to you but it’s broadly these numbers. Especially given that we have signed new insurance companies. This is trending upwards from insurance companies or from a few education institutions that we have signed on. The focus sanget is to diversify and to get non mutual fund related business in.
And I think the cards is one of the attempts at that. And we have got life cars. I think the possibilities are huge especially from if you want to do some insurance perspective for premium. We have traditionally stayed out of cars because of mutual fund that was not very relevant credit cards. But now we have got into it. We have got our own payment gateway setup integrated with Master Visa rupee and then we have started operations. We have done a lack of transactions already in the last quarter. So I think the cars will grow, we will grow the current quarters.
I think we are on track to make this 60% non mutual fund and 40% mutual fund as we go forward. Probably in a 12 to 15 months from now. The margins could be something that we will watch out for because cost transactions margins are little lesser than what we used to in ATH model. But I think overall perspective we are confident of maintaining the 15 plus percentage margins as well as growing this business. The current last year we ended around 50 crores. So our internal target is to get it around 70 crores in the current quarter.
And I think we have enough tools in our hand to take it to that level.
Sanketh Godha
Got it. Is it fair to say that 25% growth what you are saying the heavy lifting probably will be done by the payment business.
Ram Charan Sesharaman
It is true that payment will contribute a lot to it but I think insurance will also grow well and we’ll have to see whether you know the account aggregator and I think analytics also keeps base. But yes it is true that a lot of it is on These two just insurance growing and payments growing and KRA is staying stable.
Sanketh Godha
Got it. And probably the Last one till 360 has seen a bit of revival and it’s probably a little bit to that point in the call initially. So this 4.5, 4.6 crore run rate, what we are looking at once you force 360 and will it hold up in subsequent quarters and second, just on absolute basis, any additional revenue coming in360 is a bit accuracy or not or it comes at a cost.
Ram Charan Sesharaman
All right, what was the second question.
Sanketh Godha
Coming from additional revenue, what you are getting?
Ram Charan Sesharaman
I think we are at a stage where, you know we are close to break even. Think analytics. I think the 4 1/2 crores run rate that you are seeing will sustain and we are hoping that it will improve in the course of the year. One of the reasons why we see the non mutual fund margin margins will increase going forward is that a couple of the businesses such as insurance as well as quick analytics in the course of the year will turn profitable. Definitely be breakeven, but hopefully will also turn profitable. The run rate will sustain and probably there could be a small upside to it and incremental revenue.
I think their run rate is if you get to say crores a quarter, we start making money from Think analytics. So I think that will happen in the course of the year.
Sanketh Godha
Got it. Perfect. That’s it for my. Thank you.
operator
Thank you ladies and gentlemen. We’ll take this as the last question for today. I would now like to hand the conference over to Mr. Ramcharan sir for closing comments.
Ram Charan Sesharaman
Thank you. And thank you to all the participants for their continued interest in cams and for the questions that were asked. Please do reach out to MUFG or to Anish Sarlani in case you have any questions and we’ll be happy to address those. Thank you once again for your time.
operator
Thank you on behalf of Computer age Management Services Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.