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Aditya Sharma    


Mumbai, India

I am a MBA students and simultaneously reading on capital market to get some knowledge on fundamental research where I more focus on business model, opportunity size of the industry and their related parameters who help me out to find out great businesses for the investment. Nevertheless, I always look forward to learn about grow further into the same.

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Contributor since: 2022

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CMSINFO

Comments: 0 | Likes: 0 | Current Price: ₹ 370.15


CMS Info Systems Limited

Q3FY23 Result Analysis


Q3 Business Highlights

  • Business points for cash management at 120,000, up 9% YoY
  • Highest ever quarterly currency throughput at INR 3.3 trillion, up 10.7% YoY
  • Robust orderbook build up: 9M FY23 (YTD) additions at INR 800 crore
  • Won a large contract from a leading bank for our propriety ATM security software solution
  • AIoT Remote Monitoring business crosses 20,000 live sites milestone 

Financial Highlights

Segmental Performance

Cash Management

  • Business points for cash management at 120,000, up 9% YoY
  • Highest ever quarterly currency throughput at INR 3.3 trillion, up 11% YoY
  • On-track on compliance targets

Manages Services

  • Robust orderbook build up: 9M FY23 (YTD) additions at INR 800 crore
  • Won a large contract from a leading bank for our propriety ATM security software solution
  • AIoT Remote Monitoring business crosses 20,000 live sites milestone

Consolidated Financial Highlights

 

Concall Highlights

~ 3.3 lakh crore the company had  a highest ever quarterly throughput of currency.

~ Cash usage in metro cities have grown 15% YoY in 9MFY23 and which is out pacing the growth of semi urban and rural; which was grew single digit.

~ AIoT remote monetering business - In AIoT Remote Monitoring business, the company is happy to announce that they have crossed 20,000 live installations, making this one of the large IoT implementations in India. In their software business, CMS won a prestigious order for their Algo software, AIoT-based ATM security application for a large bank. This will be implemented over 15,000 ATMs. 

~ Opportunity in Banking System - Private sector banks are poised to add maybe 12,000 branches in the coming year across the country. There is severe under-penetration in Tier 4, Tier 5, Tier 6 towns in India. And these will need branches, ATMs, micro-ATMs, DBUs and whatnot. 

~ On financials - The revenue has grown by 23% to INR 1,413 crores. EBITDA has grown 39% and EBITDA margin profile is at 27.9%. PAT has grown by 36% to INR 217 crores, which is almost equal to their full year PAT of FY '22. All of this is a reflection of the company's market leadership, execution capability, a methodical expansion strategy and right to win for large complex end-to-end outsourcing deals in the banking sector.

~ Opportunity - At INR 3.3 lakh crores where the company had the highest ever quarterly throughput of currency through their network in the company's history. This represents an 11% growth on a year-on-year basis. Further, in FY '23, over for the last nine months, the company have seen a trend reversal with currency usage growing in metros by 15% year-on-year, outpacing the growth of semi-urban and rural. The business network has expanded, and currently service 120,000 business points.

As the largest company in this sector, remain committed to investing in their network and infrastructure to comply with the RBI and MHA guidelines. As shared in prior calls, two-thirds of their estate will be compliant by the end of this fiscal year. This feel is going to be a key
differentiator in keeping their quality and reliability of service offerings to the banking sector. 

Comment by Mr. Rajiv Kaul (CEO) - He said, “Despite macro challenges, we have delivered a strong Q3 with industry-leading growth and earnings, which are up 26% YoY. This clearly is a reflection of our strong client engagement, robust business model and our employees' unwavering dedication. We continue to prioritize facilitation of seamless commerce through our integrated business services platform to BFSI and Retail sector. Our technology led solutions will enable growth as we focus to expand our market share. Looking ahead, and
beyond, our longer-term business forecast continues to be strong."

With the banking sector reporting robust growth in credit and healthy margins, banks are refocusing on expanding and capturing a wider deposit share and deepening geographical presence. Banks are on a branch addition spree as they look to follow a ‘physical plus online’ approach as we have seen leading banks invest in adding new branches, particularly in under-penetrated tier-4, tier-5 and tier-6 centres
according to RBI data. 

Disclosure:

I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure:

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Stocx Research Club). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure:

Source - Company's investor presentation, press release, analyst conference call. Disc - Not an recommendation.

Disclosure legality:

I am not a SEBI Registered individual/entity and the above research article is only for educational purpose and is never intended as trading/investment advice.

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