Computer Age Management Services Ltd

NSE:CAMS

Earnings Call Analysis

Company Reports Robust Revenue and Profit Growth

The company's financial growth narrative for the quarter is marked by a robust 29% year-on-year increase in SIP collections, outpacing the industry's 19% growth. Innovations such as UPI auto pay are set to expand NPS numbers. Revenue surged by 18.9% year-on-year, with mutual fund revenue also climbing 15%. On a quarter-on-quarter basis, revenue and mutual fund revenues both grew by over 5%, driven largely by a high growth in assets under management (AUM). The company has seen yield improvement from a favorable equity mix, with a slight quarter-on-quarter yield increase. Non-SMS revenue soared 23% year-on-year and 7% quarter-on-quarter, reaching INR 40.8 crores, signaling a strategic success in the diversification of revenue streams. Operating EBITDA reached INR 129.6 crores, up nearly 20% year-on-year, and profit after tax (PAT) grew over 21% year-on-year to INR 89.21 crores, highlighting the highest profitability margins to date.

CAMS Earnings Call Summary for Q3 FY '24: Sustained Growth and Expansion of Services

The earnings call for Computer Age Management Services Limited (CAMS) for Q3 FY '24 saw the participation of company executives including Managing Director Anuj Kumar and CFO Ramcharan. The call encompassed a review of financial performance, segmentation growth, and strategic initiatives driving the company's development. Management highlighted key macro trends driving the industry, such as historic highs in Systematic Investment Plans (SIPs) and an increase in equity new investor count.

Financials Indicating Strength and Resilience

CAMS reported a robust revenue growth of 18.9% year-over-year, with mutual fund revenue growing by almost 15%. Equity AUMs and net sales also showed significant increases, with a slight margin increase in yields contrary to expectations of compression. The company's Operating EBITDA grew by 19.7% over the same quarter last year, with a strong absolute and proportional increase in profitability. Moreover, CAMS concluded Q3 with a healthy cash surplus of around INR 580 crores, reflecting a strong balance sheet.

Rising Non-MF Business Margins and Future Projections

CAMS' non-MF businesses saw their EBITDA margins improve to circa 15%, a step-up from earlier single-digit margins. Management projects a further climb to approximately 25% in upcoming quarters, predicting a gradual increment in non-MF margins but warned against expectations of margins reaching close to 50% anytime soon due to planned investments and industry-standard salary increments.

Strategic Business Segments and Market Share Growth

The company demonstrated strategic growth across several segments. The EIA (Electronic Insurance Account) is not yet a significant revenue contributor but holds a potential 15-20x market compared to current levels when factoring in future industry regulations. Outsourcing services have increased in EIS (Enterprise Information Systems) with potential for further client expansion. The company is also enhancing its offerings like the BMA Central platform for insurance, and is vested in scaling its alternative investment funds and account aggregator services.

Closing Remarks and Continued Commitment

Concluding the call, CFO Sesha Ramcharan expressed gratitude to the participants and reiterated the company's commitment to transparency and investor relations. Management emphasized the availability of additional clarifications through their Investor Relations contact, reflecting their ongoing commitment to stakeholder communication.

Earnings Call Transcript 2024-Q3

[Operator]

Ladies and gentlemen, good day, and welcome to the Q3 FY '24 Earnings Conference Call of Computer Age Management Services Limited hosted by Orient Capital. With us today, we have Mr. Anuj Kumar, Managing Director; Mr. Ramcharan, CFO; and Mr. Anish Sawlani, Head of Investor Relations. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Ms. [indiscernible] from Orient Capital. Thank you, and over to you, ma'am.

[Unknown Analyst]

Good morning, everyone. Welcome to the Q3 FY '24 Earnings Conference Call for Computer Age Management Services Limited. Before we proceed to this call, I would like to give a small disclaimer that this conference call contain forward-looking statements about the company, which are based on beliefs, opinions and expectations of the company as on date. These statements are not guarantees of future performance and involve risks and uncertainties, which are difficult to predict. A detailed disclaimer has also been published in the investor presentation, which will be released to the [indiscernible]. I hope everybody had a chance to go through the presentation.

I will now hand over the call to Mr. Anuj Kumar, Managing Director. Thanks, everyone, and over to you, sir.

[Anuj Kumar, executive]

Hi. Good morning, everyone, and thank you, Shivani. Good morning to everyone who's joined this 3Q earnings call of CAM. I appreciate you taking your time out. We will follow the standard format for this call, which means that there is a structured presentation. I'll take you through that several slides. I hand over to Ramcharan for his commentary on financials. And then we should have about 45 minutes available for taking Q&A.

So I will begin. And on the chart, if you download in the past, this is Chart #6. I'll start by sharing with you that [indiscernible] mandate of Unifi Capital, as you know, Unifi is a very prominent payments provider based in Chennai and has aspirations to operate a mutual fund, they were 1 of those 10, 11 entities, which had applied for a license in the last about 18 months. So very happy to share with you that this has recently got announced and adds to the set of significant and marquee new logo wins in the [indiscernible] in the last 8 to 24 month period. So this makes it of the last 7 new mutual fund mandates, which have been declared in the market. Overall, from an AUM perspective, you are aware that we still significantly during the last 9 months and mutual fund assets stand at about just short of INR 34 trillion. This is a 22% growth year-on-year. You would have seen in the release. Our overall market share stands at 68.2%. What is significantly heartening is that equity AUM has scaled much faster, which means it has scaled ahead of the market, and it was scaled ahead of our normal base growth. This now stands at INR 16.9 trillion. It registered a 31% growth. And when you compare it with the rest of the industry growth, equity as to our equity AUM growth, the 31% is significantly ahead of the 24% with the industrial achieved. From a market share perspective, equity gaining market share, we grew by 120 basis points on an annual basis and about 40 basis points quarter-on-quarter to tax 66, you would know that this number has been creeping up steadily for the last 2.5 to 3 years, but at 66% is a fairly significant number to core. Also you're aware that SIP collections and SIP registrations are really the formative elements which are driving the growth of this market from a SIP live book perspective. which basically covers the countries that we have. This grew 29% year-on-year, again, at a significant delta industry grew by 19%. We grew by 29%. And as you hear, this really adds helped to monthly collections, net sales, AUM growth and all of that. So again, every foundational number to continue watching. And as I come to collection numbers sector, you will see how this number of a registration that live book are really influencing asset numbers. Also the fact that of the quoted out elements out of those 5 wins. Helios, [indiscernible] met live during the quarter. And again, fairly raising a way towards the finish line, Helios grew to about -- very close to a INR 1,000 crore AUS number. Now you know that for which we want to grow to INR 1,000 crores at uptakes years, not just [indiscernible] sometimes even longer than that. So for them to achieve this in a short while and a fairly significant milestone from an achievement perspective, both in mature funds went live during the quarter.

If I move a little to beyond mutual funds, which is the nonmutual fund businesses, you are aware that we've had a sustained focus on expanding share of non-mag in the overall book. Also, we've stated to you that we will continue scaling none ahead of the book. Again, very happy to share with you that year-over-year, we've grown about 33.3% to 30 basis points. Share of nonmass is in the rate of 13% now. What comprised of non-MF and what significantly scaled 1 of course of alternatives. And I'll talk about alternatives as we move forward, but at a broad pullet level, grew 21% year-on-year, added a significantly large number of new mandates, which is 32, this includes 4 [indiscernible] cities. So again, from a market win perspective, a very satisfied quarter across all the stats. The other business, which has done extremely well and where we have sharpened our offering and also sharpened go-to-market route is [indiscernible] you've seen that we've declared over 100% revenue growth [indiscernible]. From an entity, which used to largely cater to CAM service future funds, we've gone to beyond cap service mutual funds across all of them. But now that alone, from a fintech brokerage, wealth advisory perspective. All these entities need [indiscernible] services and CAM has brought in a large number of customers in the last 12 months to both broaden our clientele and scale revenue, which is why you see that to some of the smaller days. But that notwithstanding the revenue or growth over 3% in the year -- in the quarter a year ago, is a very, very significant achievement.

Moving forward from an insurance repository perspective, we have declared that CAM has gained entry, and you know that the Non-life segment also now has KYC as a battery step before you purchase insurance. So we have 1 mandate for Oracle Insurance to do KYC for them, this [indiscernible] is a joint go-to-market and a joint offering with CAM [indiscernible] and in 360. As you know, I think 360 has had this product called Quick ID, which was selling quite well. in the financial services, which is NBFC and banking arena, but this is a nice entry into insurance. So that is what CAM [indiscernible]. And also very pleased to share with you that just broadening of the business for CAM Spain. We have won an exclusive partner status from LIC to execute customer out authentication. This is largely third-party verification of accounts of people who wanted to buy insurance and are cutting in digitally. But again, a fairly happy contract, and that's an exclusive partnership riding on all these wins and all the tailwinds that we have faced from a SIP growth and AUM growth perspective. The financial highlights are upgrade. CAM's overall revenue book grew just short of 19% at 18.9%, within the MS revenue grew 4.6% year-on-year. non-MF grew a staggering 59% year-on-year. If I take up the impact of, I think 360, which is still a onetime to the book, we still grew about 41% year-over-year on a non-not basis. Four out of the 6 non-MS businesses grew by more than 20%. So that's a significant achievement of the [indiscernible] growing by over 20%. Ride-on the revenue growth, EBITDA grew 19.7% year-on-year EBITDA percentage is historically at the highest. You would do on a number of 44.5% in the last quarter. And a year back, that number scaled up to 44.8%, so it's about 30 basis points down. And profit after tax grew in absolute terms 21% in percentage terms, grew 40 basis points year-on-year. So that's a very solid set of financial metrics, just riding on strong sales and operating performance almost across the board.

I will move forward. You would have download in the past, you would have seen that there is a significant financial data. I will just cover the Chart #7, and then what is there on [indiscernible], I will leave it to you for reading, but on Chart #8. You will see that we saw historic highs in actions. And the continuing lift and SIP numbers, equity new investor count, all of which like you know our foundational macro and our overall SIP registration for a lifetime high of 43.9%. So broadly, a 9% in volume growth growing from short of 141 million to 153 million. We'll be getting all the activity which is happening in aces equity AUM, like I said, grew significantly ahead of RBS growth and the market growth of quite equity from 12.9% in last year's third quarter to 16.9% now. Equity less sales, which is a good measure of what is the fraction of net sales coming to us through CAM service fund was in 3D was 73.2%, still holding quite absolute growth of 26%, but holding share. And like I said, our equity AUM market share is 66 the net sales share is 5% or 6% ahead of that. It simply means that equity on share will go take on to grow. So that's a good number. SIP registration new SIPs, we crossed the highest single month number of INR 2.5 billion for 5 lakh as we registered in December of 23%. And from an SIP registration perspective, we were at a 61.8% market share in 2Q, which grew slightly by a small margin to 62, but still holding up quite well. [indiscernible], net of calculations in 3Q, this number was 3.3 million, which is again the highest ever and again, bodes very well for future collections and future type-related growth. 2Q, the absolute number of [indiscernible] was 40.5 million, a set grew to 4.9% in this quarter. And then SIP gross sales, which is the number you end up reading about every month as the releases come out, was 283 million in the second quarter. grew to about 312 million. So it crossed what is a magical number of INR 10,000 crores a month and is heading in the direction of INR 11 crores. And from a market share perspective, as that gross sales was just over 60% in 2Q and that scaled to 60.5% to grow. So all of those are nice growth numbers to consider backing us in the story beyond this quarter. And like I said, they are all foundational numbers, which will perhaps at define growth as we move forward. After these 2, I'm just skipping Chart #8, 9, 10 and 11, assuming that you have a coffee and you want to [indiscernible].

I will take you through individual businesses, just chart by chart, maybe about a minute on each, starting with alternatives, where we are reporting a revenue growth 21% year-on-year. I spoke about 32 new wins during the quarter, which is a very sustained new logo onboarding performance. caps we continues to here the digitization more term in the industry. and has over 110 [indiscernible]. There is now enough trend to see that over 30%, something 40% of new customers in [indiscernible] are coming through the digital route. So that's just a revolution, I think, the way onboarding happens in this asset class. In GES, we now have over 15 clients. We added 4 new during the quarter. And then with Multifunds because we brought in the multi-country, multicurrency forecasting capability, moving some of the existing and new clients on that platform, just to gain experience and we help in that class. Also from a into perspective, you know that [indiscernible] as building these large platforms, connecting custody programs of large banks with domestic PMS and then followed by domestic [indiscernible]. The first of these programs has -- with a very large bank has just gone into life. They are onboarding the AMC on the B platform. And all of this is now growing beyond just AIS and PMS and is growing into things like FPI, ForEx and treasury services. So [indiscernible] has been able to other take some time, have been able to build these 4 platforms, which have multiple components of assisting large custodies to integrate with FPIs, integrates with sand PMS as we believe that the offtake in terms of onboarding will now start getting momentum. Also, overall, we've declared a 2.2 trillion as on reserves for our alternative [indiscernible]. From a comp perspective, I spoke about NIC onboarding CAM as an exclusive partner to execute customer authentication services, Transpara registered strong revenue growth year-on-year, onboarded a significant number of new clients for UPI Autopay. UP Autopay is now emerging as a preferred mode. It has got significant strength and this quality is over the traditional [indiscernible]. So that portfolio continues to grow. And from a overall volumes and revenue perspective, it's been a strong quarter for transfer. I'll go to the next, which is CAM [indiscernible]. We have said it has performed I mean, has delivered a very strong performance, growing over 100% during the quarter over last year. You would have seen enough news in PR around our 10-minute KYC, which I think is the foundational component because helped us penetrate brokerages and fit tax. So a large component of new plants or -- which is really the become powder that [indiscernible] have started coming from all these other sectors outside of domestic retail funds. Also from an EI embedded offering perspective with the assisted [indiscernible], OCR, [indiscernible] check, lanes, APIs, et cetera. We are finding that. [indiscernible] is now getting accepted across the board as a [indiscernible] product in the marketplace. And the growth than just mitigates all of them. There are 25 new financial institutions of various colors, shoes and types, which have stopped which have now commenced business with us because in [indiscernible] and on ordinary now the front end of the journey is powered by things we. So that's a product which has earned spurs across banks and NBFCs. Now you're using it as a standard front-end onboarding while CAM provides all the patent services that are cereal.

Going to the next on CAM [indiscernible]. We spoke about CAM [indiscernible] entry into KYC and of the [indiscernible] with a parental insurance. to do all the -- because the entire digital city process through CAM. This again is powered through things -- also from a BMA center perspective, although progress isn't as fast as we had expected. The first few insurance companies are not fully integrated on to the Master program. And this app is now available in the AppStore and the PlayStore and there's something on front. From an EIA perspective, we continue to maintain a market share of 39% for policies and 31% of the EI [indiscernible].

As I move forward, I'm on Chart #16, on CAM [indiscernible]. We've shown a sustained expansion in market share. You would have seen that we have started with single digits. And now happy to share with you that we've grown to over 13% in the ecosystem in terms of share. We have a preferred partner when the account aggregator thing started. Very few people expected that things like F&O account opening will become a large use case. We are now the preferred partners in the industry servicing multiple number of brokerages for this particular use is where a bank account has to be refreshed every year for all life account. 25 FI clients were live in -- and then we continue to report a number of new deals, both from an A and DSP perspective. So a solid quarter, still small revenue. But from a market share, total number of pools, penetrating various segments, demonstrating new use cases or things like Fan now personal finance management, I think a very clarifying period for the team. I will move forward from a in 36 perspective, you will remember that we have declared that for the flagship product, which is Algo 360. We have signed a deal with SPI, that engagement is now live, which means [indiscernible] begun and this was a very marquee customer for users of this product. So we're expecting clear dynamics to now continue showing us plan for vessels. Similarly from a digitalization perspective. We now have contracts with 3 of the top 10 public system banks there for overall digitalization. This is largely the 3 journey. This is now fully kind of Canara Bank to on -- these are both analytics, address management contracts, 1 with [indiscernible] and the other with DCB for augmenting the overall risk analytics expertise. CAM and [indiscernible] 360 also built a product called 360, which is a geographic data product, which helps business strategize in terms of understanding buying power of the consumer and how they do [indiscernible] across [indiscernible] in core. So that product is now ready for the bulk.

And lastly, I will talk about [indiscernible]. We've seen our 2x growth in overall account year-on-year. We continued to hold the #2 position in overall new E&PS sales. our overall innovation in terms of making the gas enabled, UPI auto pay, all of those things continue to be playing out in the market. And then from a POP perspective now, we are linked with several POPs and almost 3/4 of the overall traffic is now getting contributed by the 4Q, as you know, is this season for NPL. So we're expecting to continue broadening out and expanding the numbers as far as NPS is concerned.

So I will pause here, hand it over to Ramcharan for his commentary on financials. And then once you are done, then you will take questions.

[Sesha Ramcharan, executive]

Thank you, Anuj. The financials, which touched up on the highlights in the earlier part of the presentation. I will just try to get into 1 level of detail of this. From a revenue, as indicated, we have kind of had a strong revenue growth during the quarter, 18.9% year-on-year at the back of growth in assets and the mutual fund revenue. The mutual fund revenue grew by 15%, almost 14.6 percentage again, on the back of growth in assets. On a quarter-on-quarter basis, our revenue grew by 5.3% the and mutual fund on a quarter-on-quarter grew 5.4%, which is again backed by high growth in AUM. This is actually a good point to us. If you remember, over the last few quarters, we have been indicating from a yield pressure perspective, it was a common question from a lot of people, that the onetime reset of the 1 large set of the [indiscernible] with 1 of our major customers has been completed, you will see the impact of this in the next few quarters. Happy to say that it's played out like that in this quarter, and you see yield compression in this quarter. And thanks to the equity mix being favorable. The equity mix for cans is 50% almost 9% were, in fact, on a quarter-on-quarter basis, seeing a very, very marginal increase in yields, which is, again, playing out the way that we anticipated. And going forward, we also do not see any large depletion yields other than what will be driven by the telco big pricing. So from a revenue perspective, the asset-based revenue, which is a major part of the mutual fund revenue grew 13.2% year-on-year and 5.1% quarter-on-quarter, and this is INR 212 crores of asset-based revenue. The non-SMS revenue on the back of a good lineup in transaction revenue as well as miles and applications value added that we sell to our customers both had a very smart growth rate. So which means on a year-on-year basis, we grew 23% and on a quarter-on-quarter by 7%. So our non-SMS revenue is currently at INR 40.8 crores. So INR 20.8 crores. The overall revenue stands at INR 252 crores for the quarter, again, up almost 15%. The non-MS revenue, I think the earlier slides were kind of getting into the detail of the individual business lines that we have. But the highlight is being that we continue to deliver on non-MS growth, which we had kind of suggested a big increase of around 60% is what you saw on a year-on-year basis on [indiscernible], which includes the revenue of [indiscernible] analytics, which we acquired at the beginning of this year, keeping that as the overall revenue growth is upwards of 40%. This is, again, tracking to our entire projection of getting the non-MS revenue to 20% of the overall revenue within the next few years. We are well on track to achieving that. On a quarter-on-quarter basis, too, the non-MF revenue grew by 4.3%. [indiscernible] conference Anuj touched upon in the earlier slides. Good growth on a quarter-on-quarter basis on a AAF,on a payment perspective, grew more than 100 percentage and the DSP. So we had 4 businesses, which grew more than 20% quarter-on-quarter with KRA doing very well with more than 100% growth when compared to last year the same quarter. So all in all, a very strong revenue growth of almost 19 percentage driven by growth in AR as well as in the non-invest statements, which kind leads to our profitability over the last second quarter, this has been kind of the highest profitability that we have seen. On operating EBITDA, we ended the quarter with almost INR 150 crores, INR 129.6 crores of operating EBITDA just -- which is almost 20% for the 19.7% growth over the same quarter last year. And sequentially, it was a growth of almost 6%, 5.8% growth. The margins it up again, as we had indicated, as and when the revenue starts going into the non-MF as the moment of operating leverage. We will have an operating increase which has again played out in the current quarter to as opposed to 44.5% in the earlier quarter, we are at a 44.8% operating PBT is in line with us. It's almost at 40%, 39.9%. And PAT, we ended the quarter with INR 89.21 crores of PAT and 29.8% good growth of 21% impact on a year-on-year basis and 5.7% quarter-on-quarter. As I said, if you take the last current quarter, this is the highest margins that we have seen, not only in terms of absolute numbers, but even in terms of margin percentages, which again indicates to a very strong financial performance. On the return on network, as I know we are used to the 40% kind of return on network, which we are continuing to see -- and we ended the quarter with a well cash and cash equivalent surplus of around INR 580 crores in our balance sheet. One item on the cost that we would like to highlight is the cost, comparable costs for this year just like we eliminated the revenue per tin because the comparable cost of almost INR 5 crores for the year. Hence, you will see some increase in the individual expenses. But that is the onetime. That is the inclusion of things for the first time in our consolidated financials. And also, we had the final tranche of the current ESOP scheme rolled out during the quarter. So you had a noncash charge of around INR 4.3 crores that is coming into the current quarter books, which was INR 1.7 crores more than what it was in the last quarter. So if you see overall from an expense creep perspective, if you consider the noncash charge of ESOP of INR 1.7 crores. And if you consider there is an increase in out-of-profit expenses of OPE, both from a CRE as well as enough perspective to the extent of INR 2.5 crores the expense growth quarter-on-quarter has been extremely muted, which is the reason why you see some amount of [indiscernible] margins. That is also playing out on a year-on-year basis. Year-on-year basis, I had the OPE expenses [indiscernible] almost INR 5 crores. If you actually take that out, we see a strong transmission of the increase in top line to the bottom line. That's the broad commentary on the financials.

I will now hand it back to Tushar, and we may open it for Q&A.

[Operator]

[Operator Instructions] The first question is from the line of Supratim Datta from Ambit Capital.

[Unknown Analyst]

So my first question is, you gave some color on how costs have tracked in this third quarter. But just if you could give us a split between the cost, how much of that is for the core FRP business and how much is for the non MS business, that would also help us understand how the profit the pro tracking in those 2 segments. That could be 1 of the questions.

The other question is on the KRA business, you indicated that you have entered into 25 new relationships with [indiscernible]. Now I wanted to understand that what is driving your ability to enter into these new relationships with fintech. Is it a product differentiation that is helping you here? Because from our record perspective, you are still significantly lower than the market leader. So I wanted to understand what's your differentiation there? Those are the 2 questions.

[Sesha Ramcharan, executive]

Okay. There are 2 parts. I will take the first part on the non-MF profitability expense, and then Anuj will comment on the KRA and what's happening in that for us to grow this much. See, I will give you broad guidelines in terms of how the non-MF use, and we had indicated in the earlier quarters, too, from an investment perspective. We are investing in [indiscernible], which is the CAM platform. We're investing in the AA DSP. We are interest investing in the CRA platform. And we're kind of in continuing to make enhancements from a payments platform perspective. A, we are launching new products. So what we had indicated was in the last year that the investments that we are making, and we do not kind of capitalize on [indiscernible] kind of take most of it to the P&L. On a quarter-on-quarter basis, our spend was projected to be INR 3 crores or INR 4 crores. So for the current year for all these initiatives put together, we have spent more than INR 5 crores, okay? What has changed is the top line growth. So what used to be very minimal, less than a very small revenue component from DSP is now almost tracking to INR 7 million per quarter. What is happening from an MS central perspective is tackling to over 6 to 700,000 per quarter. So things like that [indiscernible] growing 21%. A lot of it is because of the new ramp-up that's happening on the products. So from a cost perspective, I don't think it's very different from what it was in earlier quarters. We continue to spend on INR 5 crores, INR 6 crores on these platforms that we are building out. But the revenue has rep, which means that the profitability from a [indiscernible] perspective, Considering it it's not a homogeneous bucket, but just from an easier understand perspective. If you take the bucket non-MF business, the profitability has crept up, and it will be in the high single digits, high double digits, now less than 1%. So we'll be around 10 to 15 percentage of the bucket profitability, which is higher than what it was in earlier quarters. And as we get more and more revenue from a top line perspective, this to kind of get closer to the profitability. That's basically the understanding that we have. Whether it will happen in 2 quarters, 3 quarters, 4 quarters, it's how fast the revenue will ramp up, but that's the trajectory that we are foreseeing.

On the KRA perspective, Anuj?

[Anuj Kumar, executive]

So when you look at the KRA business, in corporate terms, it serves the entire capital markets. In the capital markets, the large participants or brokerages and deposits [indiscernible]. That they add customers at a pace, which is significantly ahead of what mutual funds had new customers at Historically, we had rooted this business and designed it to serve CAM Service mutual funds. So a subset of the total. In the last 1.5 years, especially after we brought in Navi as a customer, we have now been going after the entire set of mutual funds, but also large brokerages and large fintechs, some of these fintechs selling mutual funds and a lot of them are just registered brokers. So we have expanded the game to, let's say, declaring arena is 3 or 4x of what it used to be. And within the brokerage business, as you know, there are significant lumps, there are 5 or 6 entities which are very large. And then there is a medium-size set of entities and there's a long team. So as you go after these, and we just can't go after these through sales effort because your products and your overall servicing turnaround times, quality of onboarding, time taken, et cetera, has to be world-class. We have built all of that, which is why we're seeing gain in share. Now are we going to become the #1 very quickly? The answer is no. because it takes a period of time. The delta between the #1 and #2 today is significant. There is an incumbent number one. But what I can certainly show you on is that there is not a flash in the pan performance. We've grown revenue 100% on the back of onboarding new plans. When these investor plans are reused either in the MS market or through for brokerages of opening [indiscernible] accounts, that is really revenue accretive. So we are doing the right foundation of things for the business. This year, the revenue growth is 1 indication. But my expectation is that we will continue to see this sustained in the same manner. You will see the gap lessening between the lead and us when do we scale up to really challenge the leader, et cetera, that may take some time. But I think the initial metrics of onboarding high potential customers, expanding the number of pads in our armory and being able to sell them to reflect on revenue, I think those are great momentum causing events which have happened in the last 4 to 5 quarters.

[Unknown Analyst]

Got it. That's the first question, investments. So on the [indiscernible] side, I understand your spending INR 5 crores to INR 6 crores additionally, some of these initiatives backlist. Now going forward, should we continue to see this [indiscernible]?

[Anuj Kumar, executive]

I may ask, can you just repeat the question? And because the -- I was not able to hear you fully because the voice was not very clear. What was your question or if you can please repeat it for us?

[Unknown Analyst]

Yes, yes. So on the -- just a follow-up on the first question. So on the investment, so you said INR 5 crores, INR 6 crores towards new initiatives. Just wanted to understand how should we think of it going forward? Should it continue at this level? And what would be those initiatives that you would be spending on this INR 5 crores to INR 6 crores. And on the MF side, if you could list how was thinking about the investment work to be some of the things that you would be investing in the MF side. That's been my question.

[Sesha Ramcharan, executive]

So what we have kind of said consistently and will continue following is that the investment amount would not go down. while this is a journey, this is not -- not reach the destination in terms of where we want to be in terms of the product. So basically, we will continue to invest in new products in AF. We already have rolled out the onboarding platform. We are doing the well track and we are doing the undercounting platform. Similarly, from other businesses, the CRA platform will get further [indiscernible]. We are doing various journeys on that. We will get -- we have started the PET, we will get the government and other teams and flavors into it. And from ASP, several use cases are emerging. We are taking a lot of these things. So the investments and this will not slow down. We will continue to invest this money in the platform that we are speaking about and we will see the beneficial impact in terms of ramp-up in the revenue. But you should assume that the same amount will continue to get invested on a quarter-on-quarter basis. Adjusted for obviously some inflation in salary costs as we go forward.

On the second question of investments in MF on what we are doing.

[Anuj Kumar, executive]

So like Ram said, you've got well in the marketplace until you build cutting-edge products and until you've taken them to market. So sales and product development. and some degree of just PR is putting the news around are just natural investment. You've said in the past, non-MF that will be in the range of INR 15 crores to INR 20 crores a year, which I think continues. The point that Ram has made is that against that, they used to be small offsetting revenue. as increasingly the offsetting revenue increases because those markets are growing. You've seen that in PRA in AIF and in account aggregator definitely. We will see that offsetting revenues grow. And therefore, the quantum of the investment remains constant, but it becomes revenue accretive.

On the mutual fund side, there is a significant amount of work that we continue to do to scale up at our leadership, which is, of course, leadership and manpower. But from a risk antifraud, cybersecurity, BCP, just the way we treat data and we are able to organize data and get analytics and insight from them. Those are standard, I would say, now you can count them as run rate investments inside the P&L, they continue to happen all the time. The sophistication that we need, let's say, from a security perspective continues to scale up in this world where you have to guard your perimeter very effectively and make sure there is no inclusion. So that will continue. But inside the P&L, I don't think you should read it as a separate line, which is kind of on to the growth of the business with us in codes to the growth of business and will continue. Does that answer your question?

[Operator]

So I think it's disconnected. We'll move on to the next question. Next question is from the line of Sanketh Godha from Aventus Spark.

[Sanketh Godha, analyst]

Now my question is just if you can give you an indicative number since today, you are at EBITDA margin of 4.7%. If I want to split the EBITDA margin of MS and non-MF how it is? And as Anuj highlighted, if the growth starts picking up in the non-MF business, and how you see the overall EBITDA margins to play out from the current levels? Or we see -- or what the numbers what you are looking at are like those numbers, significant expansion you don't expect to happen? Just some outlook on that. And my second question is largely on non-MF revenue. If you look at your business or [indiscernible] business, it seems to be plateauing on sequential basis is around INR 70 crore to INR 75 million even can pay. Just wanted to understand how to see these numbers to pan out though on year-on-year basis, this looks healthy, but on a sequential basis, it seems to be holding up at these numbers. Just if you can give a little better outlook on these businesses will be helpful. And lastly, on fund accounting, I think our competitor is a little aggressive on that particular piece. So if you can speak a little more on fund accounting as a new source of revenue, how you want to build this, it will be great.

[Sesha Ramcharan, executive]

So I'll answer the question on margin first, Sanketh, I think the questions that you asked, I'll just take the margins 1 first. So yes, we have seen a creep up in our noninterest margins. What used to be -- even as a single bucket, and I would like to clarify again, we are not a homogeneous business or a unit. But for the purpose of ease of understanding, suppose we kind of club them under a single bucket and say that's not enough bucket. Our margins now on an EBITDA perspective, are less than 15 percentage, right? What used to be a single-digit number has now kind of gone up to close to 15 percentage and so the MF is kind of much more than the 44% is [indiscernible] when your average is 4.8 percentage. Now going forward with trajectory, again, this is again, consistently what we've been saying for the last few quarters is that we will get the margins of the non-MF business creeping up as and when the revenue starts ramping up, whether it happens practically over 1 or 2 quarters or over 4, 5 quarters is what the market would tenders. But our trajectory of the non-MF margins, given that the spend is going to be plateauing and the revenue is going to be increasing. We expect that they will get 1 towards the 25 percentage in the next few quarters, for sure, right? There is no going to be no dilution in margins assets from a pay perspective because of some investments, AF margins could come down a little. But [indiscernible] starts and some revenue starts kicking in and the other DSP businesses. and sterling software, external businesses could actually give us an incremental 10 percentage increase in margins as we go forward. So that's the expectation. And obviously, I would just like to caution you with 1 thing, which is that the April quarter has always traditionally been the quarter in which we had a close 2.5% increase in cost because of the annual appraisal. Now whether that is 2% or 3% or 2.5% on when that will happen, it's obviously a decision to be taken closer to April. But I know the long-term rent suggests better increment on quarter 1. This is across the industry, not obviously unique to cans, it's going to be around 2.5 percentage. So keeping that in mind, I would not kind of predict that operating EBITDA will go to 14%, 50 percentage. But what we are confident of doing is see this creep up in the EBITDA, and we keep us with the salary increments for a moment to see this EBITDA creep-up by what we are thinking is 20, 30 basis points. over the next few quarters for sure. So that's the expectation. And we will see, we obviously hope and think that the revenue ramps up further, we will see a further ramp up in EBITDA. But I would still not suggest that we will be close to 50% in any time soon.

[Sanketh Godha, analyst]

Yes. But now...

[Sesha Ramcharan, executive]

Sorry, you have a follow-on this topic, or want to go to the next question?

[Sanketh Godha, analyst]

So basically my simple point is that means if I include even the annual prices in FY '25, then you're saying that current margins can potentially be at least at least it's 20, 50 basis point improvement in the first quarter. Then we can see probably a 1% better margin than what we can expect in FY '24 is what I wanted to just check.

[Anuj Kumar, executive]

So historically, in case you've seen that operating EBITDA has grown by about a year. That is irrespective of the puts and takes, whether we've made investments, the revenue has grown or not grown at the same pace. So just extrapolating the past into the future, you'll know what to expect, right? With what you said 30 basis points in the quarter than the 30 basis points rebate itself in all the 4 quarters. I think the only point as was saying this, in the first quarter, we always start to repeat the act. We are at it and expecting about a 1% increase in the year. Just from a historical perspective, is just part of the post. It happened for the last 4, 5 years, likely can happen in the next year too.

On CAM's [indiscernible] and AIS, I think the formative metric you should look at is what are the pace we are wearing at. Are we able to hold our prices? And are we introducing new products into the market? Because if you're doing these 3 or 4 things consistently in any marketplace. And then you know that we come from a place of leadership. Then it is not tough to acquire revenue. It can always have a quarter which may not look the most stratospheric. But I would just encourage you to look at the numbers that we've shared. We said that 4 of the non-MF businesses grew over 20%. Alternatives on a large base at about 21%, pay even higher. So a manual comparison, just in terms of overall growth, I think it's a good number to look at. We've shown you that we are business won almost 32 new clients. look at the scale, our digital onboarding now has over 114 customers. And these all revenue yield in contracts because revenue sale is we it's in line with what it used to in the past. So I'm quite confident that we will continue delivering the growth numbers that we have spoken about in the past for non-MF, non-MF is a lump, we want to keep it over 20%. And from what I see coming, I think there is significant confidence that, that will continue happening.

On fund accounting, today, we service almost 70 to 80 unique consumers from a fund accounting perspective. Earlier, this was done in a certain way. 3 quarters back, we decided to bring in the Multifunds platform, which is now going into production at about 3 or 4 of the clients are going to migrate on that. So again, very confident that we have the right offering, the right go-to-market strategy and the right teams to continue scaling this, that is how I would characterize fund accounting. I'm personally very excited with the automotive business, both what the Gas team is doing and what different double team does and collectively between them, we are quite positive about the acceptance of the products in the marketplace and how we would scale.

[Sesha Ramcharan, executive]

Sanketh, I think from a [indiscernible] perspective, the quarter-on-quarter growth is not bad. It's I think upwards of 10%, if I'm not mistaken. So I think the foundation metrics at [indiscernible] is giving number is also decent from a quarter-on-quarter growth of AIF.

[Sanketh Godha, analyst]

Got it. And last one, given this multifund platform, I'm believing it is built completely in-house. So if you try to cross-sell to more AIS or other funds, think do you expect the revenue realization from the existing funds? I mean given the cross-sell opportunity, I believe you are largely in PA transfer agency at business in AIS. Now undercounting, do you see this will play out much better than what we are anticipating or the run rate could be a little better because your ability to cross-sell?

[Anuj Kumar, executive]

So cross-selling was always happening. Like I said, we have about HP unique consuming entities, which were buying fund accounting. The gap in the offering was and we did not have multicurrency. So think of someone who's trying to redomicile themselves from an overseas location into, let's say, get, et cetera. We did not have multicurrency reporting, et cetera. [indiscernible] therefore, closes out that gap. So it is a niche. It is a part of the overall fund accounting offering. Will it create revenue scale of this one. The answer is yes. will it make us more favorable? The answer is yes. But from a base perspective, that business will continue. And in domestic, pure single currency was a particular way set.

[Sanketh Godha, analyst]

Perfect, sir. And this largely will be keeping to AIS, right? You want to expand this platform beyond AIS?

[Anuj Kumar, executive]

Yes. Right now, I think 1 thing at a time, you know our approach, right? We don't .100 players at the same time, 1 thing at a time. We want to make it a success, have a number of marquee customers talking booting about us. And then if you're thinking of pension and MS, et cetera, it's a natural sequel, but we just want to get it first right in the base among the AS and then move forward.

[Operator]

The next question is from the line of Abhijeet Sakhare from Kotak Securities.

[Abhijeet Sakhare, analyst]

My first question is coming back to the non-MF businesses. Just putting all of them together, how would you kind of characterize the recurring or annuity nature of revenues versus something that is driven by volumes or transactions if you can kind of give us some sense, broad sense on that piece of the business?

[Sesha Ramcharan, executive]

So if you are asking whether there is a connected to scale or recurring sale component?

[Abhijeet Sakhare, analyst]

Yes.

[Anuj Kumar, executive]

I would say some of things businesses which are more project-based, you win a 6-month or a 12-month analytic outsourcing contract, will perhaps characterize for that. But I would say that that's under 10%. If you want to see the annuity character, [indiscernible] is the best example, where once I have, let's say, a base of INR 2 crore pants, these individuals can go and open accounts anywhere. But the exchange of the pan information of the KYC information that I store is revenue accretive. So theoretically, you have stopped selling for a day or a month, that revenue continues. Similarly, you see came and you see the insurance policies that we have on the base. They continue to be revenue accretive because we continue charging an AMC. Even if critically, I were to stop selling for some time. So a similar trajectory goes through in payments, for example, if I have, let's say, a few crore SiPs in the base, so the sites have to be triggered every month or every week, if I theoretically stop selling to new clients or stop downloading new SIPs, that means in the base. So the project may if non-annuity self-sell revenue, which I would characterize it as not more than 10% to 15%. The rest of it is base revenue once you bought a logo in and once you matched up these basic metrics, yes, most of it is not AUM related. Most of it will be transaction-related but those transactions are recurring in nature and the prices are fixed that I see it as annuity revenue.

[Abhijeet Sakhare, analyst]

Got it. That's helpful. Secondly, I think Ram mentioned a couple of times on the account aggregator business, something like a reworking of the platform. So if you could talk a little more about it because I thought -- I mean, this was anyways sort of a fresh investments that has happened in the past couple of years. So from a monetization point of view or from a revenue accrual margin point of view, do we see this platform sort of the monetization getting right shifted because of whatever investments that are happening?

[Sesha Ramcharan, executive]

So let me clarify. So what I meant was with the several use cases and onboarding of various customers, we're just kind of making changes in the platform, which will make it easier to onboard new customers. And then obviously, be a rationalization of could as we go along in terms of scalability, in terms of capability. So it's not as we are taking and crushing the platform and building a new platform. I think it's more kind of an enhancement that we do and make it more efficient to keep onboarding or adding for us currently to take a customer go live is when things start getting interesting. Sign-ups are okay, but [indiscernible] when we start getting revenue. So this entire go-live process with all the disparate IT systems of so many people would require some amount of reorientation from a platform perspective. That's what I was mentioning. And it was in the context stuff, why further investments would be made in these, I think that was the question. So in that context, I was saying that this could be what we are doing. However, we don't entertain the platform, building a new platform and obviously, it's a cloud-based scalable platform that we have, we continue to enhance that platform. And there is no -- in fact, we are at a very interesting place from a monetization perspective. The rates have sort of stable, the sign-ups are happened and now the go-live is happening for male customers, use cases are evolving. So there's no asset change in the model of monetization or the trajectory that we foresee from monetization we have grown 100% quarter-on-quarter. And there's nothing that driven from repeating that peak in the next few quarters. So it's in a good shape now. The usual investments will continue to happen in seeking the platform, making more efficient for boarding.

[Abhijeet Sakhare, analyst]

Got it. That's helpful. One couple of again, smaller data point questions. Would you have the period-end AUM handy by any chance, overall and equity?

[Sesha Ramcharan, executive]

Period end. So can I just repeat and get back to you [indiscernible]?

[Abhijeet Sakhare, analyst]

Yes.

[Sesha Ramcharan, executive]

[indiscernible] increasing ticket, your question is going to the my numbers will show that have it's much less than the period closing [indiscernible] question, but I'll get back to the exact number.

[Abhijeet Sakhare, analyst]

No problem. No problem. And then 1 more, again, sort of a clarification. When I look at the non-MF revenue breakup, for AIS, particularly, the -- the 21% number seems to be higher than what we get when calculating the number using the mix that you have closed, I think the calculated number seems to be somewhere around 4%, 15%. So...

[Sesha Ramcharan, executive]

Something I'll just clarify. So from our perspective, the segment is ,we will probably meet the change in the presentation. So the people also does semis to the same segment. So that put together a 21% that we are talking about.

[Abhijeet Sakhare, analyst]

Understood. Understood. And then last 1 is that under insurance depository, the EIA piece that you mentioned, that -- that's not -- that doesn't make money, right? It's the piece, which is where you make revenues on a per policy basis, right?

[Sesha Ramcharan, executive]

So I'll just take a minute. Yes, on a margin basis, I think the entire insurance repository business is close to breakeven. It's not making money. On the insurance repository, which is your EAA account and the per policy billing that we do, it's not at a critical stage where it's starting to make money. That is accurate. The other business which we have in the outsourcing business, which is a more pure outsourcing kind of a play where we do some policy servicing, persistency, [indiscernible], et cetera, and implant of resources. So that's the thing that is making a small margin. But the A segment, which is just the AMC for the policies that we have, the policy conversion targets that we have and the transaction charges that we have, currently is not making money. And that's why we're looking to the BMA Central platform, which should already started integration with a couple of 3 of the insurers and 1 has gone live. By April 1 when it's kind of a little more rounded in terms of an offering and transactions start going in. We hope to kind of see breakeven and start making money from the first quarter of next year.

[Operator]

And the next question is from the line of Santosh Kesari from [indiscernible] Finance.

[Unknown Analyst]

Am I audible?

[Sesha Ramcharan, executive]

Yes.

[Unknown Analyst]

Okay. So I have 2 questions. One is about 1 question and 1 summation actually. So the question is about EIS business and your [indiscernible]. So if you can share with us what is the total addressable market that we are trying to handle in terms of 2 years down the line, 3 years down only it would be very helpful in valuing this business? That's one. And secondly, in terms of position, I have this that now that the CAM [indiscernible] part of businesses, if we can share data points around these businesses in the PowerPoint itself in the presentation that you have were in the profitability of the different businesses and the operating drivers are also placed. It would be very helpful in terms of consistency of the information that is coming from your team, and we been able to look up quarter-to-quarter, year-to-year, [indiscernible].

[Anuj Kumar, executive]

Okay. So from an EIA perspective, Think of it that you've seen in the past some statements made by regulators of there being a [indiscernible] regime potentially to be offered into insurance. That is when the entire effect of PIA and electronic policies will kind of play out. That count of policies in the country is close to INR 55 crores, which means if you want to look at the base of business, which at 1 time could accrue to insurance repositories, that's about INR 55 crore policies. What accrues to them today is about INR 3 crores. So that's about 5% of potential, which means the [indiscernible] 95% is not been realized. Also the fact that because it does not become as popular as it could have. and the level of integration with insurance companies, et cetera, is what it is. One ability to transact, which is to either select a new policy or to make a claim, or to pay premiums or to look at a single screen and look at all your maturity values, et cetera. It isn't where it is, and that is why the transaction revenue is also not kicked in. So that market is potentially a 15 to 20x market compared to what you're seeing today, taken to the [indiscernible] that as a normal consumer movement, it has been going at a certain pace, making it mandate free at the regulatory industry level will have a completely different part. When will it happen, we can all collectively guess. So that's one.

EIS on the other side, have been significantly embracing outsourcing. You will see that from a total registered count perspective, there are almost 1,000 as in the country. Everybody may not have launched. We service about 200 of them. A lot of them may have outsourced or may have bought outsourcing services only for onboarding and peer kind of services. Now of course, you know that demand will become under. So that and then fund accounting and other fund administration services. I would still say that the non-outsourced part is still quite large, it are sitting there. Most of the new funds that get launched are getting launched in a captive manner, which means that they are right, they're not coming to us, still they scale to let's say beyond 100 or beyond a critical mass. So that, again, from an outsource versus non-outsource revenue perspective, you can say that we've perhaps touch less than 50% what is out there. Most of the large AIFs, of course, have outsourced. So they are customers, but there is a significant number, several hundreds of them, which can potentially become clients over the coming years. That's fairly the addressable market for you.

[Unknown Analyst]

Okay. Okay. Great. And regarding my suggestion on giving information in a tabular format for different businesses in the PowerPoint.

[Sesha Ramcharan, executive]

So yes, thanks for the question. So we will give a tablet comment on the revenue. And the other part of it, we will definitely have a look at it at the end of this quarter. Yes.

[Operator]

That was the last question. I would now like to hand the conference over to Mr. Ramcharan for closing comments.

[Sesha Ramcharan, executive]

Yes. Thanks, Tushar, and thank you for the participation and continued interest in CAMS. We appreciate your time spent on this. And for any clarification, please reach out to our IR NC, Orient Capital or Anish Sawlani, and we'll be happy to answer any questions that you may have. Once again, thanks for your time.

[Operator]

On behalf of Computer Age Management Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

[Sesha Ramcharan, executive]

Thank you.