Thank you very much. We will now begin the question-and-answer session. The first question is from the line of Madhukar Ladha from Nuvama Wealth. Please go ahead.

Hi, sir. Congratulations on the good set of numbers. My question was more on the non-MF side of the business first. So, this whole CAMS-KRA, we have seen a good rebound over here and I think in your presentation, you mentioned that you added 38 plus sort of new clients and which are primarily non-MF. So, I want to understand which is the client category or which type of clients are getting added over here? Second, of the KRA revenue, how much of it will be sort of new account creation and how much will be fetch numbers? And then finally, on the rate that we get for a new account creation fetch, can you give some color on that, what are the rates there and what is the comparative pricing and what are the total number of records that we have? So, that is on the KRA side. And second, now in light of this, again, discussion paper by SEBI which came in last evening, there seems that again the TERs are getting cut, at least there is a direct sort of five basis points impact and then also sort of 15 basis points deduction on TER, but there is also some benefit on GST, etc., that will come. So, I know it is too early to ask this, but the worry is obviously there that again, AMCs come and cut yields. So, what will be sort of your reaction and how do we sort of alleviate these fears or how do you think about this? Yes, these would be my broad questions. Thanks.

Sure. So, let me start with the first part of the question, which was on CAMS-KRA. We have now total close to 2 crores PANs. With the induction of NSE-KRA, this will go to increment by about 13- 14 lakh PANs. So, that when you think of us in the coming quarter, think of us like CAMS-KRA having about 2.20 crores, PANs, that is sustaining this commercial activity of approximately Rs.50 crores annually of revenue. Today, I think when you look at the market, you know that this activity is a lot more intense in the non-MF segment than in the MF segment, for obvious reasons, MF account opening has been at a much faster clip for many years, which is both DMAT and broking. With F&O, that number increased. This part, just think that in the last three years, this entire about 28% to 30% revenue contribution to CAMS-KRA is brand new. This did not exist if I take you back to let us say FY22, we did not have this segment. This 30% contribution has got built. In this segment, I would say the real scale trick is to win one of the top-10 clients and get them to stay with you, because frankly, 28 or 30 or 40 clients are typically let us say fintech clients, smaller DMAT clients, smaller broking clients, but the mass, it is a long tail business, the mass sits in the top-10 or top-15. So, our focus always has been to get those clients, never too easy. Like you know proposition always is to get someone to start working with us, not for price, but for quality and delivery reasons, ask them to contribute 10% to 20% to CAMS-KRA uploads and downloads, and then move from there. So, that is really the focus of the theme. I think the redeeming feature is building from zero about 28% to 30% of revenue contribution from non-MF has been a big thing. So, think of it as about building 8% to 10% a year. If we can do this for the next three years, I think that is a great growth trajectory because most of the CAMS-MFs will continue to work with CAMS from a KRA perspective, but this is brand new and this is what is driving growth. So, that is part one of the answer. Do you want to add something?

Just on the rates, Madhukar, I think the rates have been very stable. So, without getting into specifics, we have seen the rates to be very stable from upload and download in IOP perspective. So, we see no big concern on that. If at all there is some data reduction that may happen, that will obviously be driven by volumes. But as of now, the rates seem very stable for this.

Understood. And just on the KRA part only, what percentage of the revenue is for the new sort of records that got created? And of the now 2.2 crores approximately and 20 lakhs are from the acquisition, so of the 2 crores organic CAMS KRA, how many records would we have added in the last three years, and are we seeing any material increase in the record addition now, because I think longer term, the person who has more record is in a better position, right, so is that the way to think about it, how do you think about it?

So, approximately, you will probably have uploads of 10 to 12 lakhs PANs a quarter, 10 lakh PANs is probably a good estimate to have, which is the fresh PANs that gets into the system based on CAMS. So, the 2 crores, you keep adding that organically. But obviously, the PAN potency depends on how many times they get drawn against, the download revenues dependent on that. The thumb rule is that every PAN gets downloaded at least three times in new accounts, post the first upload that happens. So, obviously, this is an industry that is driven by the stock, right? So, we are progressing on growing that stock from organic and also from an acquisition of NSE perspective, it is getting around 12 to 13 lakh PANs from them. So, this is going to be the driver of the business going forward and we are actually inching up in terms of the number of PANs that we are adding. And given that some brokers also added out of a customer list, I think this is also going to add a disproportionately higher rate going forward. So, that is kind of looking good from the overall PAN addition perspective.

I will only add dimension to this, Madhukar. I am sure you are looking at the KRA business. Here is the way I look at it. That part of the mix is to continue getting these uploads, which Ram said on a base of about 2,20 crores is about 40 lakh a year. Currently, that's about 17-18% close to 20% of the base. The second is that existing PANs and new PANs should be consumed with speed, which means I can create, I can create inventory, but I may not sell. I have to continue selling them at least at the same rate as I was doing in the past for my revenue to kind of hold at the historical rates and for my revenue growth to match the PAN growth count. And the third is pricing should remain stable. So, those are the three components. I think that is the way I look at the business. If there is any other question on this, I am just happy to answer.

And just one question I think got left out, of the 38, most of them you are saying are fintech, I know that you got one of the top three brokers, any addition in the top-10 amongst the 38?

Yes, you can say one where we have a contract, we are just trying to make sure that they migrate volumes to us, that they start off with 10%-15% upload and download contribution. So, yes, one of them, it has to kind of operationalize properly.

Got it.

So, that was part one of your question. Part two of your question was on the consultation paper. Frankly, we had a board meeting till about 9.30 in the night. And this has just come out. Our belief is that there was a longest TER discussion from let us say mid of '23 to mid of '24. And then that TER discussion got deferred. It had various components. Components of security trading tax, GST, and brokerage paid above a cap on the sale and purchase of securities by mutual funds were three elements which were focused on at that time. But then that did not kind of progress to conclusion. I still have to look and understand what this one is about from a consultation paper perspective. Like we have always said in the past that, I mean, part a) of the story is that we made our entire delivery extremely efficient. You can see it from the pricing, either from a VIFS pricing or from a pricing per account folio perspective. It is also a fact that we are a large participant in the overall ecosystem. We eat off the same plate. So, I think we have to establish whether this is materially impacting to the AMCs. If it is materially impacting to the AMCs, that is something that we have to estimate. Will they make requests to discuss rates, etc., I think it is a subsequent step. I cannot guarantee that that instance will be zero, but I think it is just too early to conjecture and come to a conclusion at that point.

Understood, sir. All right. All the best.

Thank you.

The next question is from the line of Sucrit Patil from Eyesight Fintrade Pvt. Ltd. Please go ahead.

Good morning to the CAMS team. My question is, as India's financial infrastructure expands through new platforms and investor segments, how do you see CAMS evolving its role to stay central and differentiated in this ecosystem?

You only have to watch what we are doing and you will see that we are very, very closely aligned. We are a commercial organization, but very closely aligned to the agenda. We are closely aligned to the agenda because the agenda, I mean, produces a lot of opportunity for us. We are a domestic- focused company. Our eyes are focused on just this one part. We are creating infrastructure, so think of it this way, that we have the largest infrastructure in mutual funds for the last 20 years. That is a great vindication of our intent. We today have the second largest infrastructure in customer onboarding and verification, which is the KRA business. We have a large, I would say, financial services-focused infrastructure as far as payments are concerned, all formats of payments for banking, non-banking, insurance, mutual funds, that is our business. When you look at insurance, we are one of the central figures in DEMAT of insurance. DEMAT has not really progressed as much as it could have. There is no utility in the country like Bima Central. You do not have a utility where you can go and monitor your portfolio of insurance. You can see today's maturity values or surrender values. There is no place where you can apply for a mark a lien and ask for a loan against securities or initiate a claim. There is no unified single place except for Bima Central. Apart from all of this, we built utilities around account aggregators. You may have seen us announcing ConsentPro, which is ahead of the times in terms of the implementation of the DPDP Act. Frankly, we are not doing this because we are looking for license businesses which give price protection. To be frank, a lot of these businesses may be licensed, but they give no price protection. Our account aggregator business today has the revenues at 4% or 5% of where they were four years back when we started. But we believe it is an opportunity. We believe it is an expertise of the company rather than going everywhere, we just want to stay in this one place. So, I hope that just the actions that we have taken in the last five years and last many years are a good vindication of this. If there is anything else in your mind, I am happy to answer?

My second question and final question is to Mr. Ram Charan, sir. Looking ahead, what internal levers or cost planning do you see as most important for sustaining margins, especially as service mix and volumes evolve?

Okay. So, we have repeatedly said that this is a fixed cost kind of a business, but there are some levers available for us and big ones at that. The biggest thing is automation and automation from a process perspective make the process more efficient on a daily basis and try and make it as automated as possible. And we have achieved a significant progress and success in most of the processes, right from the posting to your reconciliation to transaction acceptance, etc., A big initiative in that regard is the entire RE-ARC project that we are doing, the re-architecture of the platform. The new platform is kind of stated to go live in phases starting from the end of this financial year. I think once that goes live and we are working for it, this will have a disproportionately higher impact on the way that we approach things and it will just make the process more efficient and more automated, AI-enabled, and various other things which will kind of lessen our dependence on manual labor going forward. So, we do have many levers that we are working on, primarily being the automation of the process, the new RE-ARC platform, making things more efficient than what it is. So, I think all those things will be very useful and we are confident that our margin profile will be absolutely maintained even in the face of some cost pressures from an inflation perspective and from a yield pressure, we will be able to hold margins. I think that much of an assurance that we can give.

I just want to add one thing on this theme which we have not spoken about too much, but I am sure most of you would have noticed that back in the month of August, we unveiled the brand of CAMS AI. We have not changed the company's name yet. We have not done any high decibel PR because that is not a habit where we do a lot of things and not do much. We were preparing ourselves for the last year and a half, you can think of it as all of '24 and perhaps all of '25, to really have the spine, the capability, talent, tooling, the structure to build AI-rich solutions. So, we took time to unveil the branding. So, you have seen the launch of CAMS AI. You will very shortly see two things. One is the composite, a very wholesome deployment of artificial intelligence inside our operation, which means the operation, it is a large platform which has been built over 30-years. You will see that deployment will obviously be conducive to managing productivity, which means you will see a PR. That is one. The second thing you will see is deployment for some of these solutions outside our core business, which means inside the core business, obviously, we will continue solving the problems that we solve to become more efficient, faster, quicker, doing thing with lower risk and more finance.

I think that is good guidance from your part with regard to AI. And I wish the entire team best of luck for the Q3.

Thank you.

The next question is from the line of Lalit Deo from Equirus Securities. Please go ahead

Good morning sir. Just two questions. Firstly, for the non-MF business, could you give us what would be the overall EBITDA margin in this particular quarter as we have already highlighted that it was around 12%, just wanted to understand that? And how are we tracking in terms of different sections?

If I may just ask you, what is your question on the margins for the non-mutual fund businesses, because you are not very clear, obviously disturbance. Okay. So, as we have said that inherently, all the non-mutual fund businesses are platform-based businesses, which means the platforms have been built and the investment phase are largely over in terms of all the platforms, for example, a Bima Central or a pension fund or an account aggregator, etc., So, as the revenue increases, the margin profile keeps increasing. We have said that the margins are currently between 10% and 13% EBITDA is what it keeps happening. The current quarter’s margins are on the same lines, although payments margin has increased a little because of the higher volumes that we are seeing from a payments perspective. But overall, we are at a sub-15% EBITDA margin, and our stated aim and expectation is that this will go to a 25% margin in steady state, given that our incremental investments are going to be muted, but the revenue is going to flow directly to the bottom line. So, we are at a sub-15% EBITDA now and we expect that we will reach 25% within the next couple of years.

Just look at it this way, that the mature, scaled, non-MF businesses, which is KRA, where the margins will be in the 30s, payments, where the margins will be in the mid-20s, and AIF, which will also be in the mid-to-late 20s, demonstrate that on a Rs.40-50 crores portfolio, it is possible to make 25-30% EBITDA margins in KRA, higher than that. There are investment businesses where we are putting money, which is account aggregator, which is NPS, which is insurance, and a few smaller ones, including MF Central. Those are the ones which have to get to some scale. We have said in the past that our experience is that it takes about the initial Rs.10 crores per annum of revenue for a business to break even. Insurance, for example, would have a much later break even because the costs are larger. Somewhere between Rs.10-15 crores of scale, the business will break even. Above that is the profitability line. Then as you scale up to Rs.25-30-35 crores of revenue, the profits can become very handsome. Like you have seen in a Rs.50-60 crores business, it is possible to cross 30% EBITDA. We do not expect non-MF to easily become a 45-50% EBITDA business, but it is our desire like Ram said for it to become 25-30%. We are very confident that the current line from, let us say, 15% at portfolio level to 25% at portfolio level will happen in the next couple of years.

Actually, just lastly, on this insurance segment, within Bima Central, we have added Tata AI as the fourth insurer over there. I just wanted to understand, what should be the broader economics over there, how do we make money in this segment?

Okay. So, the revenue model for insurance repository is threefold. One is when you convert or take a new policy online, we get paid, and every payment is done by the insurance company, none by the final policyholder. We get paid some money, and then we get paid AMC from year two on all the policies that get converted under a part of our platform. And thirdly, we get transaction revenue. Now, the way that things have panned out before this integration is that our revenue was entirely dependent on the initial conversion as well as the AMC revenue. But now that we have four insurance companies and more on the pipeline who get integrated, more and more transactions are flowing through the Bima Central platform. The transactions could be in terms of not only change of data, but also, for example, a premium payment. And once we go live with additional features like a lien marking, etc., the transaction count is going to increase disproportionately. So, we have now touched a transaction volume of almost 1 lakh a month and sometimes more. What used to be a negligible number is now kind of ramping up rapidly because of these integrations. So, our monetization will involve around three things. One and two already in place, and third is an increase in share of the overall revenue. Given the number of insurers are getting integrated, number of policies are getting increased, the number of transactions also will increase, and it almost has a beneficial impact on the overall revenue. So, that is the way that we monetize this platform.

Thank you.

The next question is from the line of Devesh Agarwal from IIFL Capital. Please go ahead.

Good morning, everyone, and thank you for the opportunity. My first question is on the MF yields. What would be the number for this quarter?

Devesh, it is a very tough number to predict in terms of this. But what I can tell you for sure is we do not expect a depletion in the yields. Obviously, there could be some mix impact, which could be plus- minus, going to see new customers, meaning the customers who run smaller size growing more than larger ones, etc., So, it is very difficult for me to predict, but I can tell you we do not expect the yield depletion to be more than 0.02 bps given the current trends, Our expectation is that I do not think it will be more than 0.02 bps. We will try to see how much within that range it is actually.

No, sir. I was actually asking for 2Q, the quarter gone by.

The quarter gone by, we had a yield depletion of points. We said 0.03 to 0.04 will be the expectation and I think we are at 0.04 depletion when compared to the last quarter, which is probably on expected lines. And we have taken the entire impact of the SBI price reduction on this and hence, we do not see a further yield impact more than the telescopic pricing.

Understood. So, it should be somewhere around 2.12 basis point, if I am right?

This time it is between 2.0 and 2.10.

And so, now that 100% of the SBI repricing has been captured in this quarter, would you share what would be the pricing difference between the top three mutual funds in 2Q?

So, I think as we had indicated very clearly in the last few calls, the entire reset of pricing happened because the parity had to be reached. And if you see the published accounts and if you actually compare it to yourselves, you will see that among the top three, two do not have any difference, the third has been reset from April. So, currently, based on the pricing that we have, we can confidently say that there is no big difference between the prices of the top three, which will involve any renegotiation or any such activity. We are almost on parity levels. Obviously, there will be some differences because of asset mix, etc., which is unavoidable. But broadly, I do not think there is any difference that will kind of cause for a trigger of a repricing or, etc., among the top three customers.

Right. And so, in the next two years, how many contracts are up for renewal among your top 10- clients?

As I said last time, we are in for a period of sort of stability. We do not have any major customers up for renewal. We do have some midsize customers coming up for renewal in the next financial year and the year after that, a few of the large ones will come. So, as I said last time, we will have at least an 18-month of stable prices where there are no big renegotiations happening or repricing happening or even renewals happening, every renewal period will not amount or will not result in a repricing. I think that is kind of an impression that I need to correct, which is that a lot of the contracts get rolled over also without any change in prices, including large ones. But purely from a renewal perspective, we have nothing major coming up for the rest of the year. A couple of midsize customers coming up for renewal in the next year, and the year after that will be where a couple of the larger customers will come for renewal. What it actually amounts to in terms of repricing, I think we will have to wait and see. But again, I would like to caution that does not mean that it is going to be every time there is a renewal, there is going to be a big price giveaway, I don’t think that is going to happen.

Right, sir. And, sir, a more strategic question. Even if you see ex-office regulatory changes, AMCs may always ask for additional discounts. So, what can you do to put a floor to the pricing, is there anything that we can do?

So, we have said this in the past, Devesh, that this is a market which does not have too much competition. There are two domestic providers. The thought of putting a floor on price, doing anything else that concentrated providers do, has not happened in the market. I think all the time we have tried to demonstrate value to our clients. And like Ram said, more than half the contracts, which could have been negotiated, just get rolled over because clients see value. I think essentially the way I look at it is that our ability, and we have said this, that our ability to grow our business at current scale, we are a Rs.1,450 1,500 crores company, for us to grow revenue at the rate of Rs.150 to 200 crores a year is perhaps the most acid test that I look for. I know that you are looking for pricing dips and stability of pricing dips. I am just taking you a little away from that and trying to kind of share my point of view on how I think about running this business, that our attempt is to scale this business, let us say, by 200 crore, 50 crores of non-MF, 150 crores of MF is almost a given if we have assets growing by 8 to 10 lakh crores a year. Our current base has crossed 50. If I have assets growing at 8 to 9 lakh crores a year for the next three years, we will get to 150 crores of MF increase. Non-MF, you have seen, we have crossed over Rs.40 crores of revenue increase last year. We will cross over Rs.40 crores of revenue increase this year. We believe that our cost increases will always be in the range of 60, 70 crores and not more than that. Operating EBITDA therefore, growing by Rs.100 crores is really how it works. And in most of these platform businesses, when we are pouring revenue from the top, a lot of that goes to the bottom line. I need not illustrate it for you because you can see it happen yourself. Within this is a big question that you ask me very often in the past, that can we fix a price, floor it down somewhere and say that we will not fall in bps anywhere below that? Possible. We have not yet gone down that route. But yes, prices have become very fine. It is a viable thought. We have not implemented anything like that yet.

Understood. One last one. For the new AMCs, as I understand the pricing is very competitive for some of the new AMCs. Could you share one, what is the additional cost that you have to incur whenever a new AMC starts an operation? And once we have this 8-10 AMCs who start operation, what could be the drag on the margins or the profit for us? Like what you shared on the non-MF side that there is an initial 10-15 crores cost for the business, any number for a new AMC that starts operation, is there a cost for us?

So, Devesh, I just want to answer this question in two parts. First is that new AMCs are deeply discounted or any new ones are deeply discounted. Since you, all of you and you yourself now track scheme accounts, please look at two AMCs that we won from competition; one is Navi and one is Taurus. And you can take a look whenever the scheme accounts are available to you on whether we discounted those. We are actually charging more. You can say it is a subset of our win, but it is a relevant subset because somebody wanted to come to us and we told them we will not sell it at a lower price. This is clear evidence that will be indisputable. Kindly do take a look. For one, you will have to wait till next July, for the other, there is evidence available in front of you. For all the others, we have won new ones in the past, I will not name individual contracts, but there was a contract we won, let us say, at the end of 2022, went live at the end of 2023, you have seen scheme accounts. That deep discounting does not exist. We may have a support period of six or nine months, maybe a year, at which time the AMC is only Rs.1,000 to 2,000 crores, but it is not that they are enjoying any freebies for five years. Just to answer your question, a typical new account goes live with a team of about 12 to 13 people. We are liberal. We do not want our quality of service to deplete, so it goes live with 12 to 13 people and will have its own database and its own app server, etc., and PCB site, etc., all those things are there. If you want me to estimate what is the cost of running a new AMC, it will probably be Rs.2 to 3 crores. It would not be more than that, which means that if they get to Rs.1,000 crores revenue and we get just basic yields, we will start offsetting that cost. That is really the cost. Six of these are, by the way, live. I just want to point out that six of them are in the base. Choice you can ignore because it went live over the weekend, but the other five have been in my base, most of them for 4Q of last year, some of them again in 1Q, and then mostly everything was live in 2Q. So, if you believe there is additional cost incurrence because of these, even if your argument is correct, which it is not, there is no fresh accretion of cost, three more have to go live, most of the others, which are six, are live in the base.

Just to just reiterate the last point, Devesh, you will see that the margins of mutual funds are very stable, right, are very stable over the last few quarters, barring if you take away the impact of the price and it I getting back to what we think is the normal company margin of 45-plus percentage. So, as Anuj said, if you have six AMCs who have gone live and supposedly deeply discounted pricing and a lot of costs getting incurred, I am sure you would have seen the impact on the margins, which you are not seeing, right, which you are not seeing at all. So, I think that is again one of the misconceptions that we will need to correct. So, what we have in the base is already there, what we are getting revenue is already there, and still your margins are stable if you just equalize for a moment the last few quarters of the price discount that we gave. And they are also getting back to what is actually the margin historically also.

Understood. Thank you so much and all the very best.

The next question is from the line of Dipanjan Ghosh from Citi. Please go ahead.

Hi, good morning, sir. So, just a few questions from my side. First, if I look at the alternates business, obviously, there have been a very, very strong pickup in momentum on a sequential basis. But if I look at last year also, between 1Q and 2Q, there was a decent improvement of almost 10%-plus and then it kind of again fell off. So, just to get some sense on whether if there is any seasonality in this business or incrementally, we can think of more like 11 crores to be more than that to be like more of a steady state run rate in that segment? That was the first question on the alternates business. Second, I just want to go back to one of the previous participant's questions on the KRA business. This sequential offtake that you have seen, how much of that would be, let us say, because of new DEMAT account getting opened and incrementally when you see the visibility for let us say, October also, I mean, because we are towards the end of October, do you see this run rate sustaining? And my last question is, again, going back to the mutual fund business. You mentioned that, two years out, somewhere around FY28, you would probably see multiple large asset managers coming up for renegotiations. Given that at that particular stage, the absolute quantum of money that some of these asset managers that will be paying to you, depending on that AUM at that point of time, would be a very, very significant number, do you think that there can be a case that, given that it will be almost three decades of your operation, that some of them might want to move to more of a cost plus sort of a model or some different sort of a revenue model compared to the AUM linked model that we have today? Those were the three questions.

Okay. Great, Dipanjan. I will perhaps answer your questions in a different order if you are okay, starting with MF, and then I ask Ram to chip in if needed. See, as far as the MF business is concerned, you have to think of it and believe that it is an infrastructure business. It is not IT services. It is not BPO. It is not a per transaction business. Today, for example, like we have said in the past, I do not give a very long answer, if a regulatory change happens or if a new product comes into the market, our charging remains at asset level. For SIF, I may have built a lot of new things, because the regulation said that the mutual fund cannot let it masquerade as a mutual fund product, the font size has to be different, the website should be different, customers should know it is a different product. Everything is designed and built by us. We do not build on instructions. We are not expected to seek somebody's help. So, it is a very bespoke our design product. The platform belongs to us, the entire intelligence, the infrastructure is ours, and the operations whatever labor we incur is part of that. It is not amenable to be run as an IT services or any services business, which is cost-plus. Where a change happens, the buyer asks for a price, we give a price, so the nomination methodology is going to change. You will have to now give us a video starting 1st December if you do not want to nominate someone. The mutual funds do not have time, and we do not have time for them to come to us with these changes and say what is the change going to cost? That is how services work. That is how a cost of model works. Despite this not being a cost-up model, I think today you have to look at the pricing. And again, I will repeat what I have said in the past, that today we have about Rs.11 crores folios with balances, Rs.1,200 crore-plus of MF revenue. We sell each folio at Rs.110 or Rs.120. You pay Rs.300 for your DEMAT account. The provider, the principal pays for ISIN for downloading the Benpos, for doing corporate action. There are 100 ways where you pay money to the other equivalent cohort entities, you do not pay that here. So, the equivalent pricing is maybe one-third of what comparable domestic pricing is. And I think therefore, while there are potential arguments saying, oh, why do not we insource, can we build it ourselves, we are so big, can this go to cost-plus? I am not saying the instances of those questions are zero, but they are very few. I think the industry believes in outsourcing. The industry believes that they have been able to scale this to this level and declutter their lives by letting the advisor do what they are doing, letting the sellers and banks do what they are doing, and letting the RTL do what they are doing, and giving us enough independence to design the outcome and not just take instructions. I think that is an abiding belief system in the industry. Unless that changes at a transactional level, I do not see either a cost-plus mentality coming in or an insourcing mentality coming in. That is one of your questions. Do you want to take -?

Yes, yes. So, Dipanjan, if your question was how much of your new carriers are coming because of your share brokers, etc., as against the mutual fund, the estimate is between 25 and 30 percentage. There is actually new PANs coming from that. Of course, the exact numbers I could have a look and ask Anish to kind of get back to you on the number, but this is the estimate that we have. You had a question on the AIF business similar to what you had last time. And my reply remains the same, which is that we see that this business is strong enough to grow this 15% a year. On average, yes, 1st Quarter was a little disappointing in terms of this. Even this quarter, a few of new logos addition, and also from an expendable number, the number is very healthy. And GIFT City is doing well in terms of the overall revenue, broken even in GIFT City also. So, I think the prospects are bright for us to reach this target of a 15% growth year-on-year. We stick to that estimate. And I think there will be no seasonality on this on quarter-on-quarter basis. We expect that this will kind of hold true for the rest of the year.

So, just one small question if I can chip in. Any inorganic plans in the horizon I mean barring the one that you are already ongoing?

I would say we continue to scan the market. There are a lot of opportunities available in the payment space. Like you know we have not decided that that is the way we want to scale the company. Because some of that is just pure technology sales, that some of it is a per transaction payment company kind of architecture. There are very small opportunities available. You can buy lumps of Rs.20, 30, 40 crores of revenue. You will not easily buy 100 crores revenue. Payments, of course, you can buy multiples of Rs.100 crores. So, we continue to look at the market. There is nothing immediate which can hit us in the next two or three months. But yes, I must say that beyond the target of growing the company by Rs.200 crores through existing business lines, we continue to look at the market carefully. We have the cash. We have the management bandwidth to do this. But you would not hear anything in the next couple of months.

Got it. Got it, sir. And thank you for all the detailed explanations and all the best.

Thank you. Thank you very much.

The next question is from the line of Siddharth from Vittae. Please go ahead.

Good afternoon, sir. Thanks a lot for the opportunity for me to connect. So, I just want to give a get a quick idea as to lot of PMS are rolling out with their, AMCs at the moment. And you do have a good share in the, upcoming AMCs which are to be rolled out. Just want to understand what kind of revenue contribution to the top line can be possible from that? And how much on a relative scale that do you have the share of the, upcoming AMCs? And also would like to get an idea about the geographical presence that you are planning to have in the future scales at the moment as it was highlighted on the, previous concall?

Sorry, can you just come back with your third question? Your third question was on -?

It was regarding your geographical presence. Correct me if I am wrong, was getting to an outlook of, you are venturing or stepping into new markets to, expand your global presence as well. So, just wanted to check in on that part as well after mainly checking with the new AMCs rolling out?

Got it. No, you are right. We do have higher share of the new AMCs and a lot of them are PMS players as Anuj would have mentioned in the first slide itself that we did get the biggest one and a few more are in the pipeline. So, from a revenue contribution perspective, the way the industry works, the industry size currently is upwards of 70 trillion and our assets under management is almost like 55 trillion. For a new AMC, it will be an initial few years for everybody is a little kind of a tough year in terms of ramping up their AUM. So, even at a very decent pricing for them to even get to Rs.10,000 crores in a couple of years or three years' time is a very big task in this market and we have seen the new launches getting to that level in probably three to four years' time if not more. So, the revenue contribution that comes from the new PMS who have come into AMCs or the new AMCs for that matter is always going to be a little on the lower side, right? The game is that once they reach a scale of, say, more than Rs.15,000-20,000 crores, that is when they start contributing and not only do they start making money, they also start contributing from a profitability perspective to the service providers like RTAs. This is more future-proofing our market share, right? We are pretty sure that with all the wins that we have had in the foreseeable future and beyond our market share, we are going to be the market leaders in this place, and that is kind of the new logo ensure that more from a short-term revenue or a profitability perspective where the contribution will be a little lesser given that it will take time for the AUM to ramp up. On the question of geographical stuff, I think we have repeatedly said that we are focusing on the domestic market. We continue to believe in the potential of the domestic market. We continue to see a lot of upside and market share given the various metrics on penetration, launches, etc., We feel there is a lot of room to grow, not only from a mutual fund perspective, but also the other businesses that we have forayed into from a non-mutual fund perspective. So, the business that you saw from an international perspective was a more inbound that we got from Sri Lanka. And I just like to stress that the same platform with minimum customization has been used for that also, so which means that it was not as if we made a separate product offering and invested a lot for that particular sales or from a product process. So, we continue to kind of cater to such inbound, we would probably do a couple of things which our existing customers take a foray into other geographical regions we may go with them. But as a strategy, we continue to be fully domestic-focused, not only from a mutual fund, but non-mutual fund perspective also.

Okay, got it. So, thanks a lot for the clarity and yes, we can take this forward. Thank you.

The next question is from the line of Prayesh Jain from Motilal Oswal. Please go ahead.

Yes, hi, everyone. Just, on this question, somehow you answered earlier, but just trying to get more insight into it. So, if, for example, AMC, which would have been giving you a certain fee at Rs.1 lakh crore AUM today, let us assume that it's just an equity AUM, the new AMCs that you have enrolled, would they be, in case they reach that Rs.1 lakh crore equity AUM in the next couple of years, would you still earn the same amount of fee that you would be earning today on that Rs.1 lakh crore AUM? Just trying to understand, is there a pricing gap between what you are earning today and what are you giving the pricing to the new AMCs?

Absolutely. See, we have no reason to discount the base. You would not do it if you were sitting in my place. You would not discount the base. The base is a loyal long-term franchise, which can see if I discount another base. It will be a bad strategy on our part. Like I have said, you can take a look at whatever clients we acquired. So, three large acquisitions, FT in '21, Navi in '23, Taurus in '25, some of them, the new logos have gone live. I know a lot of scheme accounts are not available, but the ones which went live in '23, at least one of your scheme accounts are available. Take a look at all of them. We can do a call separately. We do not want to do that. To be honest, we are okay to let some of the new logos go because just think about it. They might grow to Rs.1,000, 2,000, 3,000 crores, maybe Rs.10,000 crores. On a busy day, sometimes my AUM moves by Rs.50,000 crores. So, I must exercise judgment that in a haste to get new logos, we do not make mistakes and start discounting a base. That just does not make sense. A base is the most precious part. Like I have said in the past, that if you take all AMCs launched in the last five years, the revenue contribution to the RTA business for the marketplace is perhaps 1%. You take all the AMCs launched in the last 10 years, the revenue contribution to the RTA business will not reach 5%. It takes time to kind of grow that. So, therefore, for us, in a quest to get that 1% or 5% with us to deeply discount the base just does not make sense. There is enough evidence. If you find contrary evidence, we can have a conversation.

Got that, got that. Second is, from a profitability perspective, you all mentioned that the non-MF businesses profitability will improve to 30%, 35% in the next couple of years. Should that kind of lead to the overall company level EBITDA margins inching towards more like a 47%, 48% kind of margins or do you think that you will be able to maintain at 44%, 45% given that there could be some compression in margins on the mutual fund business, so just trying to understand that?

Historically, if you see over a 10-year period, we have incremented EBITDA margins by more than 1% a year. If I take out this one event of price equalization, that is how things happened. Non-MF was not a big part of that story because non-MF was, I mean, we seriously started scaling non-MF, let us say, from FY22 or four years back and that is the time period for which we have got this 28% revenue compounding. When you look at non-MF, first look at one lump of three, which means look at alternatives, KRA and payments. That is the scaled part. And like I said, that is producing between 20% to 35%, depending on business line already. Already at a current scale in those three businesses, we are perhaps very close to 30% of operating EBITDA where we are putting in money, I am still investing in MF Central, investing in the NPS business, investing in fund aggregator, probably investing some money in things like Pentopal and Think, building out new products like ConsentPro, etc., that is where we are investing money. So, the fact that we can produce 30% in non-MF is demonstrated by the big three. I have just got to take some of the others and insurance is somewhere in the middle. Building scale is not very easy. So, it is perhaps a business between 25 to 30 crores right now, but it has some component of labor. Otherwise, insurance would have been part of the mix. So, a part of non-MF, a scaled part is already making 28% to 30%, some businesses are making losses. For them to cross the, let us say, Rs.14, 15 crores revenue, that's like crossing the Rubicon, once they cross that, you will see profits there. So, therefore, on an average, for us to increment company level operating EBITDA by about a percent a year, I think it is a reasonable expectation that you should have and I have.

Just balance this one thing, Prayesh, is that the share of non-mutual fund revenue as a proportion of total revenue is also something which we are hoping to increase and which are working to increase, right? So, which means that from a weighted perspective, if it becomes 20% with a 35% or even a 30% margin, and the remaining things have whatever margin it is. So, it is not fully from that perspective. Mathematically, also, you will have to see the weighted where the margins will not be 48%, 49%.

Right, right. And the last question is on again the MF yields, right? I think, again, this has been discussed in the call earlier also. But given that it has just been a two-player market, and I am sure that it does not appear that any third player can make an entry here, what is the kind of restrictions that you have to kind of protect your yields from falling further, because I think that is the concern, which has always been there, whether we again come to a 3.5-4% yield decline on an annual basis or at any given point of time, again, there could be an episodic event where we will suddenly feel that the yields are falling by about 10% again, right? That is the biggest fear that we have with respect to yields that whether this yield fall of 3.5%-4% is a number that we should work with, or there could be risks to that?

No, we have always guided that that is the telescopic part of our contract, that is the part of price depletion that our clients take in their co-business. So, philosophically, that principle still applies and should continue applying that there will be some basic yield depletion because of telescopic rates. The one incident while it has happened, I think you should also appreciate that within two quarters of having implemented that, we are back to the highest ever enterprise revenue. And my hope is one month is gone of this quarter that we will be at the highest ever MF revenue by the end of this quarter too. So, we have recovered very quickly. I understand that that recovery is because of circumstances and some efficiency that we have. Will it happen again? It happened once in 30-years. Will it happen again? I do not know. I would say that it is a rare set of circumstances will lead to an event like that. I would again say that if you focus on our ability to continue keeping this character of this enterprise at platform revenue, running it at small increments in operating cost, a very small increment in cost of sales, our ability to drive revenue of absolute rupee. Look at the next three, four years. I mean, after that, we will have this discussion every quarter. But when I think of the next three, four years, I want to grow this company by at least Rs.500 crores in the next three years. We believe that we have a very solid paper solution to that. We know that not even half of that will be consumed in cost. So, margins will improve. That is the broad way we look at it. And I think any large price correction of the kind that you have seen one in maybe three decades is not a very likely event.

I would just like to add one thing to that is what triggered this as you know is similarly sized customers and parity of price, right, which is broadly in the same range. I think we are at a stage and you will see next year when the scheme goals are published that, we are at a stage where similarly sized customers do not have a big variance in price. So, I think the root cause has been addressed from this particular exceptional event that happened. So, that is where we stand as a company.

Got that. Thank you and wish you all the best.

Thank you. This was the last question for today's conference. I now hand the conference to management for closing comments. Thank you and over to you.

Thank you. Thank you to all the participants for spending time with us on this earnings call and your continued interest in CAMS. If you have any queries, as usual, please feel free to reach out to MUFG or to Anish Sawlani and we will be happy to address the questions or take your calls. Thank you once again.

Thanks.

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