LIC-Backed Stock CAMS Announces Rs 10/Share Dividend: Buy?

In the financial services industry, Computer Age Management Services Ltd. (CAMS) is a mid-cap company. For more than 25 years, CAMS has provided technology-driven financial services and infrastructure to mutual funds and other financial organisations. The company has declared its financial results for the quarter ended 30th September 2023 along with an interim dividend for FY24.

CAMS Dividend

"As informed in the intimation filed on 16th October,2023, the record date for Interim Dividend of Rs. 10/- per equity share, declared by the Board at the meeting today will be 17th November, 2023," said the company in a stock exchange filing.

CAMS Q2 Results

The company reported revenue from operations of Rs. 275.08 crores, in Q2FY24 up by 13.5% on a y-o-y basis while its net profit for the quarter under review was Rs. 84.51 crores up 17.1% on a y-o-y basis and PAT margins reached 29.7%.

Mr. Anuj Kumar, Managing Director of CAMS said, "It is heartening to share the company's strong performance, both on the financial results front and around operational excellence. We have posted an impressive PAT of Rs. 84.5 Crore, a 17% Y-on-Y growth, on the back of robust annual revenue growth of 13.5%. The second quarter was marked by historic highs and key milestones across multiple operating dimensions, for Mutual Funds serviced by CAMS. Our overall assets under service touched a life-time high of Rs.32.6 lakh crore and our market-share remained steady at 68.5%. Equity assets recorded a 28 % Y-on-Y growth on the back of rising share in equity sales alongside steady market movement. Individual investors' participation remained vigorous and we added a record 16 lakh investors to our base to touch 2.83 Crore unique investors."

"Revenue from businesses beyond Mutual Funds posted a noteworthy growth of 7.4% in sequential quarters and 47% on a Y-on-Y basis. CAMS KRA's market outreach with the wider capital market began to see deal closures and sustained usage. Alternatives services scaled to Rs. 2 lakh crore worth of assets under service and won over 15 new logos in the quarter. We are excited to announce the beta launch of Bima Central, an Insuretech initiative from our Insurance repository (CAMSRep) which aims to bring a new paradigm in the realm of policy holder services. Account Aggregator business CAMSfinserv's momentum continued with 40 new signups and a market share of 9.5% (in linked accounts) during the quarter," he added.

"We are enthused by Think360.ai being selected as the only Indian company in the Top 100 AI Fintech companies globally. The company signed on 10 new clients and piloted its first Generative AI client project during the quarter. Fintuple is set to roll out a large transformational project with a leading private sector bank bolstering its technology stack offering for the BFSI segment," stated Anuj Kumar.

CAMS Share Price Target

Mandar Bhojane-Equity Research Analyst at Choice Broking said, "CAMS is currently trading near Rs 2390. The stock recently experienced a breakout and subsequent retest of a daily trend line, accompanied by a significant increase in trading volume, indicating a bullish trend. On the weekly chart, the price is trading within a wide range of Rs 2230 to Rs 2680. In this range, the price could potentially move sideways. If the price manages to close above the Rs 2680 level, it may have the potential to reach near-term targets of Rs 3000 and Rs 3200 in the short term. On the other hand, immediate support levels can be found at Rs 2230."

"The Relative Strength Index (RSI) is currently at 51.14 and is trending upward, indicating increasing buying momentum. The ADX is at 29.5, further supporting the idea of a bullish trend. Additionally, the price is trading above the 50, 100, and 200-day exponential moving averages (EMA), which also suggests bullishness in the stock. To prudently manage risk, it is advisable to set a stop-loss (SL) at Rs 2230 and consider buying on price dips around Rs 2350 and Rs 2280 levels. These precautions will help protect your investment in case of an unexpected market reversal. In summary, considering the technical analysis and current market conditions, CAMS appears to offer an attractive buying opportunity for those targeting a Rs 3200 price target, provided that appropriate risk management measures are in place," stated Mandar Bhojane.

KKunal V Parar, Vice President - Technical and Algo at Choice Broking said, "Recently the stock has given a healthy correction from its top at 2650, and now it is facing a strong resistance of its 50 days moving average which shows a weak trend for the time being. However, if we talk about the Weekly chart then the stock has taken good support of its 50-week moving average which shows a positive trend on a longer time frame."

"A daily momentum indicator MACD is trending with a positive crossover but below its Zero line which points out a weak trend in the counter. Based on the above technical structure, if the stock is sustaining above its 50-day moving Average we can see a good move in the counter upto the level of 2640-2700 while downside support comes at 2220.00," stated KKunal V Parar.

CAMS Shareholding Pattern

During the quarter ended 30th September 2023, CAMS reported promoters shareholding of 19.87%, FIIs stake of 38.61%, DIIs stake of 16.05% and public stake of 25.48%. As per the shareholding pattern of CAMS for the July-September 2023 quarter, insurance giant LIC held 22,91,717 shares or 4.67% stake in the company.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.