CMS Info turns ‘cash chips’ as stock doubles from IPO price

Shares of CMS Info Systems have been on the rise on on Friday hit an all-time high of ₹474.20 on the BSE, as analysts remained bullish on the stock due to its strong fundamentals, besides future growth potential. The stock closed at ₹465.25 — a gain of 115 per cent for its IPO investors.

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Jefferies, global investment advisory firm, said Revenues can grow at 30 per cent+ CAGR and share could rise from 5-7 per cent of total with good margins. CMS is set to ramp up remote monitoring system that is on stronger platform & applied at 25k+ ATMs, bank/ NBFCs/ insurance branches & retail outlets. “Scale-up of RMS, diversification into bullion-logistics and collections with cash management growth will aid 20 per cent CAGR in profit,” it said. Jefferies remained Buy on the stock with a price target of ₹600.

The company is into cash management and is engaged in installing, maintaining and managing assets and technology solutions on an end-to-end outsourced basis for banks, financial institutions, organised retail and e-commerce companies in India. It launched its IPO in December 2021 with a price band of ₹205-216.

Brokerages upbeat

Asian Market Securities, in a note, said: “We maintain a Buy rating on the company and revised FY26E P/E multiple from 16x to 18x, considering strong revenue visibility and order book wins, resulting in a target price of ₹560 based on FY26 EPS estimate of ₹31.”

The company has a dividend payout ratio of about 25 per cent, it said adding that CMS Info has demonstrated strong market leadership positions, with attractive margin and return profile.

According to IIFL Securities, which also maintained its Buy stance on the stock with a target price of ₹520, said CMS expects FY25 revenue in the upper half of ₹2,500-2,700 crore. Management highlighted significant growth opportunities in Retail Cash Management (RCM) and AIoT remote monitoring while stating its intent to expand into collection services and specialised logistics.

Another domestic brokerage DAM Capital (formerly IDFC Securities) said: “Our thesis on CMS Info Systems as a cost-effective partner for non-core operations for the BFSI industry remains intact. Size, scale benefits and debt free/cash rich balance sheet provide it an envious competitive advantage in CM – a growing, cash generating business – which in turn is helping it deepen its reach in various MS verticals while also increasing wallet-share with existing clients.”

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JM Financial believes CMS continue to remain on a strong footing given its robust business model, significant market leadership in the CM segment (market share improved from 39 per cent in FY19 to 49 per cent in FY24), strong track record of diversification and strong earnings growth and return profile (FY25E RoIC >35 per cent).

Axis Securities CMS Info’s customers for cash management include India’s Top-5 PSU banks and Top-3 private banks. It is also attempting to cross-sell its managed services offerings to these customers and has been successful with banking-automation products, and remote monitoring offerings.