CMS Info Systems Q1 FY26 Earnings Analysis

- CMS Info Systems aims for robust growth aligned with historical rates through FY ‘25 to FY ‘27. - Services revenue is expected to grow at a CAGR of 14% to 17% over the next two years. - Cash-related businesses are projected to grow at a 10% to 13% CAGR. - Managed Services and Technology Business Units target a strong growth rate of 25% to 30%. - Software business, currently 7% of revenue, is forecasted to exceed 10% by FY ‘27. - Growth drivers include expansion in retail cash logistics, remote monitoring (Vision AI), and integration of new technology solutions. - The company is gaining market share due to sector consolidation and aims to increase recurring revenue with longer-term contracts growing at over 20% CAGR. - Order book execution is picking up, with a healthy pipeline of Rs. 1,400 crore orders for the year. - Retail segment expected to be a key growth driver through cash automation and secure logistics.

- CMS Info Systems targets robust growth from FY ’25 to FY ’27, aiming to continue its historical growth rate. - Services revenue CAGR is expected between 14% to 17% over the next two years. - Cash-related businesses projected to grow at 10% to 13% CAGR. - Managed Services (MS) and Technology BU expected to grow strongly at 25% to 30%. - EBIT margins maintained around 19%-20%, focusing on overall company EBIT as a trend. - The company focuses on maintaining a 25%+ ROCE profile consistently. - EBITDA drag from prior investments (like debt collection pilot) is expected to ease by FY ’25. - Order book execution to be completed by September 2025, supporting revenue growth. - Expansion in recurring long-term contracts (7-10 years) leading to more predictable revenues. - Dividend payout ratio at about 42% of PAT demonstrates strong cash flow.

- FY ‘25 CAPEX was approximately Rs. 130 crore, significantly lower than the earlier guidance of Rs. 300 crore. - For FY ‘26, CAPEX is guided to be in the range of Rs. 300 crore to Rs. 325 crore. - This includes around Rs. 163 crore lying in Capital Work In Progress (CWIP) as of FY ‘25. - The company continues to ramp up tech and automation investments aligned with long-term strategy and changing business mix. - CMS has focused on building a strong M&A pipeline, having screened hundreds of companies and shortlisted 65, aiming to scale especially through acquisitions in payments, software, valuable logistics, and banking services. - Bullion business, currently contributing about 1% of revenues, is internally incubated and expected to scale rapidly mainly via M&A. - Future growth will be supported by executing a robust new order book and ongoing investments in technology, automation, and consolidation efforts.

- There is no explicit mention of any current or upcoming fundraising through debt or equity in the provided transcript. - The company emphasizes maintaining strong financial discipline, with a robust balance sheet and strong cash flow generation. - They have improved operating cash flow to EBITDA to 76% and increased cash and cash equivalents to over Rs. 1,000 crore. - Focus appears to be on organic growth backed by internal cash flows and potential M&A for scaling newer businesses like the bullion segment. - No plans for new equity or debt fundraising were discussed or indicated during the call or in the Q&A section.

- Order wins in FY ‘24 amounted to approximately Rs. 1,950 crore, largely from public sector banks. - Execution of the order book was slow initially (~15% in H1 FY ‘25) but improved to 52% by March 2025. - Expectation to complete full execution of this order book by September 2025. - New order wins during FY ‘25 were around Rs. 1,200 crore, with 60% from private banks. - Order win momentum improved significantly in H2 FY ‘25 with Rs. 800 crore of wins; Q4 had Rs. 500 crore of order wins. - Pending order book and recent Q4 wins aggregate to a healthy Rs. 1,400 crore to be executed in FY ‘26. - The market is consolidating, favoring leading companies like CMS for market share gains moving forward.