Goal: ₹600
CMP: ₹444
CMS Infosytstems Q3 revenue rise of seven per cent y-o-y missed estimates because of weak product sale.
However, we’re enthused by progress in a number of areas: ATM money administration outsourcing is picking-up, largest competitor defaulted on debt, CMS prone to break into Fast Commerce section with RM-services, ATM interchange could also be hiked.
It might additionally diversify into bullion-logistic and debt assortment. Outsourcing in ATM money administration section is prone to pick-up with SBI placing up bidding for about 10k ATMs and different PSUs can also line-up. Given the funding lining-up in fast commerce section, we see this as a robust alternative within the medium time period – we await readability on sizing of this chance from administration.
CMS can acquire market share because it leverages its wider attain, operational edge, stronger stability sheet, partnerships with main banks and enlargement into new verticals like distant monitoring methods and brown- label ATMs (BLA). Like international markets in money administration, India may also consolidate additional, and CMS must be a beneficiary of this phenomenon.
Publish correction of 23 cent in previous 4 months, valuations look enticing at 16x FY26 PE and with improved outlook, we really feel inventory can re-rate and ship wholesome 17-20 per cent earnings development. We proceed to see CMS amongst our top-mid-cap picks with Purchase ranking and PT of ₹600 primarily based on 18x Dec-26E PE.
