CAMS Boarded 3000 Corporate Subscribers In Q1 | NDTV Profit
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00:00Hello and welcome to NDTV Profit. My name is Rucha Somaiya and today we have with us
00:05the MD of Scams, that is Mr. Anuj Kumar. Thank you for joining us. We appreciate your time
00:11with us. So the company reported Q1 numbers, revenue was up about 27% on a year on year
00:18basis while net profits were up 40%. So what is your first take on the results this time?
00:24Good morning. Thanks for having me over on the show. I believe the results are strong
00:31and sustained now for a period of time. If you look at the quarter, revenue grew, blended
00:37revenue grew about 27%. This rode strongly on mutual fund revenues growing 26. But also
00:45non-MF continued firing on almost all cylinders and that component of the revenue grew 31%.
00:53All of this was done efficiently. So EBITDA grew upwards of 36%. Absolute PAT grew about
01:0142%. And just from an efficiency perspective, both EBITDA and PAT on a year on year basis
01:08grew about 300 absolute points in terms of margin contribution. So I think a sustained
01:14set of results and underlying this, there is strong operating performance across products,
01:18which is reflected in the financial results. Right. Last time we saw a lot of pressure
01:24on the yields in the MF part of the business. So what is your take on the MF side of the
01:30business? So on the MF side of the business, I think there's been a set of strong, some
01:38of those are once in a lifetime kind of metrics. Our assets grew gross 35%. Equity assets grew
01:45a staggering 55%. We got almost 70% of equity net flows. You know that equity net flow is
01:53perhaps the metric to watch in the market. If there's one metric you're watching that
01:58we had a contribution of about 71% overall over 90,000 crore of equity net flow. On the
02:05NFOs, we garnered almost 82% of all flows. On the SIP front, it was a lifetime high of
02:13about 93 lakh SIPs getting set up. So across the board, I think almost once in a lifetime
02:19aggregate metrics that I have seen. On the yields front, I think it was the most stable
02:25quarter, which means that aggregate, I think the yield performance, there was a very small
02:30compression, which was as per our expectation, but yields are holding out. Right. In the
02:36last quarter, we saw a bit of pressure because of the renegotiations on payouts with AMC.
02:42So what is your take on the kind of renegotiations and the pricing around that front?
02:50So you know that the pricing architecture is a small compression because of the telescopic
02:55pricing. It's like when you increase the bulk, you pay a little less, that is the deal for
03:00the AMCs. That takes out about 2 to 2.5% of price annually, we will take in that range.
03:09So think of aggregate compression to be in that phase. We have some contracts up for
03:14negotiation this year, but I think we are doing a reasonable job of making sure that
03:18yields hold out broadly in the long term.
03:22Right, right. So how big do you see the non-MF, if we move to the non-MF side of the business,
03:28how big do you see this kind of business going ahead? Because a lot of brokerages expect
03:33the non-MF business to rise in the next three years. So what's your take on this side?
03:38We are very happy with the performance of the non-MF portfolio. If you see the stuff
03:44that we've done over the last three years, I think the story is playing out almost entirely.
03:48And I'll just give you some snippets. So at the aggregate, we said non-MF will continue
03:53staying ahead of the MF growth that's held through this quarter too. So non-MF has grown
03:5731% in absolute revenue. Within that, if you see the performance of the KRA business,
04:04that's grown 100% year-over-year. Now that's a stratospheric number. It is playing out
04:09because we are now participating in the DP and brokerage segment. It was largely an MF
04:15play earlier. We believe that there's still steam left in the KRA growth story, and you
04:19will perhaps see similar numbers in the rest of the year, at least.
04:23Similarly, on the payment side, we came out to be one of the top three in India in the
04:27BFSI sector in UPI auto pay. So that's great mitigation of the effort and the investment
04:33we made in the product. Overall, the payments business grew 44% revenue year-on-year. And
04:39again, I believe there is steam still left for similar numbers to be posted, at least
04:42for the rest of this year, if not beyond that.
04:45Thirdly, on the account aggregator side, while the numbers are small, I think from a product
04:49innovation and market share perspective, we've continued to scale. So we have now 16% of
04:55overall consent-based linkages in the industry. This number, you remember two years back,
04:59used to be about 2% or 3%. So I think from a product and go-to-market perspective, the
05:04team has done a fantastic job in scaling all of that to be at 16%. And so those are three
05:10large or significant parts of the non-MF stack that have done well.
05:15On alternatives, we grew revenue about mid-teens this quarter. Our aspiration is to continue
05:20growing upwards of 20%. There was some old contract fall-offs, as you know, it's a closed-ended
05:25industry. So at some time, a contract which is seven, eight, or nine years old will come
05:29to an end. So we saw a little more of that incident in the current quarter, but we believe
05:34that for us to aspire for 20% growth in this segment, the domestic segment of AIFs, is
05:39completely reasonable.
05:40And the last thing I would say is that from an insurance perspective, while we still don't
05:44have large revenue lifts to report, I think from a product perspective, both growth in
05:50EIA, which is electronic insurance, and Bema Central have been very gratifying. In the
05:55quarter, we added over 1 million EIA accounts and over 1 million policies. We've never
06:02done this in the past. We expect similar numbers to come through in this quarter also. So I
06:06think the heft that we are creating in the overall insurance business is pretty strong.
06:11On Bema Central, we have about 1.5 lakh users of the product, about over 40,000 downloads
06:18of the app. So overall, that is also playing along well. So there are these four or five
06:24key segments in the non-MF play, which have done well. We've added a lot of investments,
06:30built out platforms, and created a go-to-market strategy for all of them. And I think that
06:35is playing out in the current year.
06:37Right. So just a follow-up on that, the revenue proportion from the segmental business, we
06:43have around 70% of our revenue coming from the mutual fund business and 30% around from
06:48the non-mutual fund business. So do you expect this kind of mix to change going forward by
06:53getting more revenue from the non-MF side because of the growth prospect?
06:58That's correct. Our stated position is, two years back we'd stated that we'll grow non-MF
07:04significantly faster than MF, bring the revenue contribution upwards of 20% of the overall
07:11mix. I think we are well on track, so we continue to hold that position and we'll continue scaling
07:16non-MF faster than MF to achieve that 20% diversification in the next three, three and
07:20a half years.
07:22Right. Also, on the global risk side, do you see any sort of risk in our business because
07:30of the global market selloff, which is happening and the crash, et cetera, which generally
07:36people are expecting to have in the near term?
07:39Does that affect our business in any manner?
07:44See, our business is mostly in the capital markets and whatever I may do, I can't take
07:49cyclicity out of it.
07:51You know, it's not for one man to decide to take cyclicity out of it.
07:55What I would certainly say is that we are building diversification.
08:00There is just significant attractiveness in MF and EIF as instruments of savings and
08:06investments for the individuals and families.
08:09So in the medium and long term, that attractiveness is not getting diminished.
08:14In fact, it is getting augmented.
08:15It is improving. So whether there's a selloff or there is a correction, I think we have to live with
08:20those things that are just part of being part of the capital markets.
08:23But broadly, we are very hopeful and very positive on the future of the industries that we
08:27operate in.
08:29Right. Just one last question from my end.
08:32Talk about the opportunity on the APY, which has opened up beyond protein as well.
08:38So how does that pose as an opportunity or a threat to us?
08:47It's an opportunity to participate in APY.
08:49This was a plea to the regulatory bodies earlier.
08:54They have consented to allow us to play.
08:56It's a mass market, almost bottom of the pyramid product.
09:00So you have to scale it significantly for that to show up in any meaningful manner in your
09:04revenue book or your profit book.
09:06But it's a great start we are making.
09:08So we're very hopeful of scaling it.
09:10Yeah. So this kind of update had actually come out last time.
09:13So can you give us any update which our company is doing on this front?
09:18Any sort of revenue or any sort of number that you can attribute to this kind of
09:23business?
09:25Too early to say that.
09:26Too early to say that.
09:27Overall pension is a small component of our revenue stack.
09:30It's under 1% or about a percent.
09:32So APY will be a subset of that.
09:34Those numbers are very small.
09:36OK. Got that.
09:37Thanks for wonderful insights, Mr.
09:39Anuj Kumar and was lovely to having you this time and all the best for your future
09:44quarters. Thank you for joining us.