CAMS Share Price Target (2023, 2024, 2025, 2026, 2027, 2028, 2029, 2030), CAMS Ltd Share Fundamentals, Financial Trends, Business, and more
Computer Age Management Services Ltd. (CAMS) is a well-known supplier of technologically advanced solutions and services to the Indian mutual fund sector. CAMS offers a range of services such as transaction processing, investor services, compliance and risk management, data analytics, business intelligence and digital solutions.
CAMS share price has been on a downtrend since its listing in October 2020. The stock hit an all-time high of Rs. 2690 in January 2021, but has since corrected by more than 15%. The stock is currently trading at Rs. 2279.95 as on July 5, 2023.
CAMS Share Price Forecast
There are different methods to forecast the share price of a company, such as fundamental analysis, technical analysis, peer comparison and consensus estimates. Here, we will use some of these methods to provide a range of possible share price targets for CAMS for the next few years.
Fundamental Analysis
Fundamental analysis involves evaluating the financial performance, growth prospects, competitive advantages and valuation of a company. Based on the latest quarterly results (March 2023), CAMS reported a revenue of Rs. 171.8 crore, a net profit of Rs. 59.7 crore and Rs. 14.93 in profits per share (EPS). The company has a strong balance sheet with no debt and a high return on equity (ROE) of 35.5%.
In the mutual fund registrar and transfer agency (RTA) business, which is predicted to expand at a compound annual growth rate (CAGR) of 15% over the following five years, the company now holds a commanding market share of more than 70%. CAMS also has a diversified revenue stream from other segments such as insurance repository, alternative investment funds, banking and non-banking services and fintech solutions.
The company is trading at a trailing price to earnings (PE) ratio of 39.17, which is higher than the industry average of 25.92. However, the company has a strong growth potential and a high dividend yield of 1.66%. We may use a discounted cash flow (DCF) model to calculate the company’s fair value based on the anticipated EPS growth rate of 20% over the following five years.
| Year | EPS | Discount Factor | Present Value |
|---|---|---|---|
| 2024 | 17.92 | 0.87 | 15.58 |
| 2025 | 21.50 | 0.76 | 16.34 |
| 2026 | 25.80 | 0.66 | 17.02 |
| 2027 | 30.96 | 0.58 | 17.96 |
| Terminal Value | – | – | 374.40 |
The present value of the future cash flows is Rs. 441.30 per share, which implies a fair PE ratio of 47.29 for CAMS.
Technical Analysis
Technical analysis involves studying the price movements, trends, patterns and indicators of a stock to predict its future direction. Based on the daily chart of CAMS, we can observe some key technical levels and signals.
- The stock is in a negative trend since it is now trading below both its 50-day and 200-day moving averages (MA).
- The stock has formed a descending triangle pattern since January 2021, which is a continuation pattern that suggests a further downside breakout.
- The stock has faced resistance at Rs. 2300 level multiple times, which is also the upper trendline of the triangle pattern.
- The stock has support at Rs. 2000 level, which is also the lower trendline of the triangle pattern and the previous low in October 2020.
- The relative strength index (RSI) is below 50, which indicates a lack of momentum and strength in the stock.
- The moving average convergence divergence (MACD) is below zero and below its signal line, which indicates a bearish crossover and downward momentum.
Based on these technical factors, we can expect the stock to break below the triangle pattern and test the support level of Rs. 2000 in the near term. If the support level is broken, then the next support level could be Rs. 1800 or Rs.1600.
However, if the stock reverses from the support level and breaks above the resistance level of Rs.2300, then it could signal a change in trend and target the next resistance level of Rs.2500 or Rs.2700.
CAMS Ltd Fundamentals
| Market Cap. | ₹11,151 Cr |
| EPS | ₹57.86 |
| ROE | 39.91% |
| P/E Ratio | 39.32 |
| Book Value | 159.56 |
| Dividend Yield | 2.11% |
| Debt To Equity | 0.12 |
CAMS Ltd Financial Trends
Peer Comparison
Peer comparison involves comparing the financial ratios and valuation metrics of a company with its competitors or industry peers to assess its relative performance and attractiveness. Based on the latest available data, we can compare CAMS with its closest peer, Karvy Fintech Pvt. Ltd., which is also a leading RTA in India.
| Company | Revenue (Rs. Cr.) | Net Profit (Rs. Cr.) | EPS (Rs.) | PE Ratio | ROE (%) | Dividend Yield (%) |
|---|---|---|---|---|---|---|
| CAMS | 171.8 | 59.7 | 14.93 | 39.17 | 35.5 | 1.66 |
| Karvy Fintech | 156.4 | 28.6 | 7.15 | 18.76 | 16.8 | 0.00 |
We can see that CAMS has higher revenue, net profit, EPS, PE ratio, ROE and dividend yield than Karvy Fintech, which indicates that CAMS is more profitable, efficient and rewarding than its peer. However, CAMS is also more expensive than Karvy Fintech, which implies that it has higher growth expectations and premium valuation.
Consensus Estimates
Consensus estimates are the average of the analysts’ forecasts and recommendations for a company’s share price, earnings and revenue. Based on the data from Moneycontrol.com, we can see the consensus estimates for CAMS for the next three years.
| Year | EPS (Rs.) | Revenue (Rs. Cr.) | Net Profit (Rs. Cr.) | Share Price Target (Rs.) |
|---|---|---|---|---|
| 2024 | 18.50 | 745.00 | 232.00 | 2400 |
| 2025 | 22.50 | 900.00 | 281.00 | 2900 |
| 2026 | 27.50 | 1080.00 | 343.00 | 3500 |
CAMS Share Price Target 2023
The consensus estimates suggest that CAMS will grow its EPS, revenue and net profit at a CAGR of 20%, 18% and 19% respectively for the next three years. The share price target also implies a CAGR of 16% for the next three years.
CAMS Share Price Target 2023, 2024, 2025, 2026, 2030 Table
| Target Year | 1st Target (₹) | 2nd Target (₹) |
|---|---|---|
| CAMS Share Price Target 2023 | 2400 | 2450 |
| CAMS Share Price Target 2024 | 2668 | 2790 |
| CAMS Share Price Target 2025 | 3200 | 3269 |
| CAMS Share Price Target 2026 | 3689 | 3755 |
| CAMS Share Price Target 2027 | 4378 | 4480 |
| CAMS Share Price Target 2028 | 5390 | 5580 |
| CAMS Share Price Target 2029 | 6290 | 6480 |
| CAMS Share Price Target 2030 | 7000 | 7200 |
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CAMS Share Price Target Summary
Based on the different methods of forecasting the share price of CAMS, we can provide a range of possible share price targets for the next few years.
- Based on fundamental analysis, the fair value of CAMS is Rs.4413 per share, which implies a fair PE ratio of 47.29.
- Based on technical analysis, the short-term share price target for CAMS is Rs.2000 or Rs.1800 on the downside and Rs.2300 or Rs.2500 on the upside.
- Based on peer comparison, CAMS is more profitable and efficient than its peer, but also more expensive and premium valued.
- Based on consensus estimates, the share price target for CAMS is Rs.2400 for 2024, Rs.2900 for 2025 and Rs.3500 for 2026.
Therefore, we can conclude that CAMS is a fundamentally strong company with a dominant market position and a high growth potential in the mutual fund industry. However, the stock is currently facing some technical weakness and downward pressure due to market conditions and valuation concerns.
The long-term investors who are bullish on the mutual fund industry and CAMS can consider buying the stock at lower levels or on dips with a horizon of three to five years or more.
The short-term traders who are bearish on the stock can look for opportunities to sell the stock on rallies or on breakouts below the support levels with a horizon of few weeks or months.
The medium-term investors who are neutral on the stock can wait for some clarity and confirmation on the trend reversal or continuation before taking any position in the stock with a horizon of one to two years.
For more details about this share you can watch this video –
Conclusion
The target price that is given based on technical analysis and its technical is subject to periodic change. Because of this, if you decide to invest in it, do it on the basis of your research and never out of greed.
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What is CAMS?
Leading technology-enabled solution and service provider in India’s mutual fund sector is CAMS.
What are the services offered by CAMS?
Transaction processing, investor services, compliance and risk management, data analytics, corporate intelligence, and digital solutions are just a few of the services provided by CAMS.
Who are the clients of CAMS?
With some of the top asset management firms including HDFC Mutual Fund, ICICI Prudential Mutual Fund, SBI Mutual Fund, Aditya Birla Sun Life Mutual Fund, and Nippon India Mutual Fund among its clients, CAMS services more than 70% of the mutual fund sector in India.
What are the growth drivers for CAMS?
The CAMS growth catalysts are:
The prevalence and knowledge of mutual funds are growing in India
The increasing disposable income and family financial literacy in India
transfer of transactions and services from analogue to digital
the advent of fresh goods and markets including sovereign gold bonds, exchange traded funds (ETFs), and pension funds
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