AgenciesRelated
JM Financial has buy call on CMS Info Systems with a target price of Rs 350. The current market price of CMS Info Systems Ltd. is Rs 259.05. Time period given by analyst is one year when CMS Info Systems Ltd. price can reach defined target.
CMS Info Systems Ltd., incorporated in the year 2008, is a Small Cap company (having a market cap of Rs 3975.08 Crore) operating in General sector.
CMS Info Systems Ltd. key Products/Revenue Segments include Sale of services, Automated Teller Machines (ATM) and Sale of Products for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 405.23 Crore, up 8.29 % from last quarter Total Income of Rs 374.21 Crore and up 21.37 % from last year same quarter Total Income of Rs 333.88 Crore. Company reported net profit after tax of Rs 60.24 Crore in latest quarter.
Investment Rationale
CMS Info Systems (CMS), India’s largest cash management player and one of the biggest managed services providers, will be a major beneficiary of emerging industry tailwinds such as a) increase in number of ATMs (replacement/new), b) ongoing industry consolidation (top 2 players enjoy c.72% market share vs c.60% in FY18), and c) increasing compliance requirement and, hence, better pricing scenario (price hike ~30-40%). On top of this, CMS possesses a) an unparalleled pan-India presence of vans/branches that serve ATMs in 96% of India’s districts, b) strong customer relationships, c) ability to diversify into allied businesses, and d) excellent balance sheet management (post tax RoIC>30%), brilliant cash flow generation (FCF positive in all the past 8 years and future), and net cash balance sheet (since the past 5 years). Notwithstanding the sharp rise in digital payment penetration, we see a sharp jump in CIC in the past 2 years (apart from macro disruptions such as GST/Demonetisation in the past) reflecting sustained co-existence of cash and digital payments. The brokerage estimates CMS to post a robust 27% CAGR in PAT and 26% CAGR in FCF (FY21-24E). It initiates coverage on CMS with a BUY rating and a Mar’23 TP of INR350 (~35% upside from CMP), basis 17xFY24EPS (adequately backed by DCF valuation methodology). Key Risks: a) Sharp reduction in CIC, and b) delay in implementation of compliance requirements.
Promoter/FII Holdings
Promoters held 63.38 per cent stake in the company as of 31-Mar-2022, while FIIs owned 9.54 per cent, DIIs 11.09 per cent.
CMS Info Systems Ltd., incorporated in the year 2008, is a Small Cap company (having a market cap of Rs 3975.08 Crore) operating in General sector.
CMS Info Systems Ltd. key Products/Revenue Segments include Sale of services, Automated Teller Machines (ATM) and Sale of Products for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 405.23 Crore, up 8.29 % from last quarter Total Income of Rs 374.21 Crore and up 21.37 % from last year same quarter Total Income of Rs 333.88 Crore. Company reported net profit after tax of Rs 60.24 Crore in latest quarter.
Investment Rationale
CMS Info Systems (CMS), India’s largest cash management player and one of the biggest managed services providers, will be a major beneficiary of emerging industry tailwinds such as a) increase in number of ATMs (replacement/new), b) ongoing industry consolidation (top 2 players enjoy c.72% market share vs c.60% in FY18), and c) increasing compliance requirement and, hence, better pricing scenario (price hike ~30-40%). On top of this, CMS possesses a) an unparalleled pan-India presence of vans/branches that serve ATMs in 96% of India’s districts, b) strong customer relationships, c) ability to diversify into allied businesses, and d) excellent balance sheet management (post tax RoIC>30%), brilliant cash flow generation (FCF positive in all the past 8 years and future), and net cash balance sheet (since the past 5 years). Notwithstanding the sharp rise in digital payment penetration, we see a sharp jump in CIC in the past 2 years (apart from macro disruptions such as GST/Demonetisation in the past) reflecting sustained co-existence of cash and digital payments. The brokerage estimates CMS to post a robust 27% CAGR in PAT and 26% CAGR in FCF (FY21-24E). It initiates coverage on CMS with a BUY rating and a Mar’23 TP of INR350 (~35% upside from CMP), basis 17xFY24EPS (adequately backed by DCF valuation methodology). Key Risks: a) Sharp reduction in CIC, and b) delay in implementation of compliance requirements.
Promoter/FII Holdings
Promoters held 63.38 per cent stake in the company as of 31-Mar-2022, while FIIs owned 9.54 per cent, DIIs 11.09 per cent.
(Disclaimer: Recommendations given in this section or any reports attached herein are authored by an external party. Views expressed are that of the respective authors/entities. These do not represent the views of Economic Times (ET). ET does not guarantee, vouch for, endorse any of its contents and hereby disclaims all warranties, express or implied, relating to the same. Please consult your financial adviser and seek independent advice.
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