Ladies and gentlemen, good day, and welcome to the Q1 FY 2025 earnings conference call of Computer Age Management Services Limited, hosted by Orient Capital. As a reminder, all participants' lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Shivani Kharvi from Orient Capital. Thank you, and over to you, Ms. Kharvi.
Hi, good morning, everyone. Welcome to the Q1 FY 2025 earnings conference call for Computer Age Management Services Limited. As mentioned today, from the management, we have with us Mr. Anuj Kumar, Managing Director, Mr. Ram Charan Sesharaman, CFO, and Mr. Anish Sawlani, Head of Investor Relations. Before we proceed to start the call, I would like to give a small disclaimer that this conference call may contain forward-looking statements about the company, which are based on beliefs, opinions, and expectations of the company as of late. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. A detailed disclaimer has also been published in the investor presentation, which was released to the top exchanges. I hope everybody had a chance to go through the presentation. I will now hand over the call to Mr. Anuj Kumar, Managing Director.
Thanks, everyone, and over to you, sir.
Thank you, Shivani, and good morning, everyone. I'm pleased to welcome all of you to this earnings call of CAMS. We will discuss the financial results of the first quarter. As has been the usual practice, I will take you through a structured presentation, going upon the highlights of the business, and then we'll hand over to Ram Charan, our CFO, to talk about the financials. All of this will take about 25 - 30 minutes, leaving us with about 30 minutes to go through Q&A. So I want to presentation on chart number six. I trust all of you have had the opportunity to download this for yourselves. I'm very pleased to share with all of you another quarter of what I would call strong, sustained performance from the company. Overall, revenues grew just short of 27%.
You see a number of 26.8, while MF was expected to grow because all of us know that the underlying assets have risen handsomely in the past one year. So MF revenue grew 26.3%, but I think the icing on the cake is the non-MF revenue, which is now firing across the lenders, and that grew just short of 31% at 30.7%. As we maintain our focus on expanding the non-MF franchise, not through just efforts made in a single business line, but across businesses, you're seeing those results. And despite the fact that MF by itself grew 26%, non-MF on a year-on-year basis expanded share to 13.3%, we stick and reaffirm our commitment to grow this scale this to at least 20% in the next three, three and a half years. I believe we are on track.
We'd like to grow this by about 2% every year, so about 0.5% every quarter. It also depends on how fast MF grows, but that's notwithstanding. I think very pleased to share that growth with all of you. All of this was done extremely efficiently. So EBITDA, absolute numbers grew upwards of 36%. So revenue growth of 27%, EBITDA growth of 36.6%, EBITDA percentage at 45.4%. Now, do keep in mind that this was the first quarter. Our expansion and employee cost and some other leases, etc., they get reset on 1st of April. So this was also the quarter traditionally where we eat a lot of that cost. We will drop that, and we still have a 320 basis points up directionally in terms of EBITDA percentage year-on-year. And then PAT grew just short of 42%.
So revenue up 27%, absolute EBITDA up 36.6%, PAT almost 42%. Despite eating the annual inflationary cost that happened in the first quarter, all these results have been achieved. Again, in line with EBITDA percentage growth, almost 300 basis points plus growth in PAT at 330 basis points. So all of this is just a compelling story of what's happened in the company in the quarter. You know that this has taken some time and a lot of effort in the making, but very pleased to kind of share the progress report with you. I'll flip to the next two charts, number seven. You know that we crossed the INR 40 trillion or INR 40 lakh crore milestone. This is an absolute AUM; if I just take quarter to quarter, that's about a 35% growth. It's also a staggering 55%+ growth in equity AUM.
You know that traditionally these numbers are in the 18-20 range. A very good year could be 25. So we are talking of significant scale on top of the base. Our market share in equity assets, I think, is very heartening. And again, like I keep saying, if there's one foundational metric in the market you want to see, this is the metric. We reached 66% in the quarter. Ahead of what it was about a year back, 65%. So that's a significant leg up in terms of that number. The overall equity market share. Equity net inflow, if you see, crossed INR 90,000 crore in the quarter. This was 70% of industry's equity net inflow. And of the INR 121,000 crore, this was INR 90,000 crore, so a strong number. Within this, new fund offerings, we were at a staggering 82% collection.
So this is a number upwards of INR 20,000 crore, upwards of 82% collection, and just vindicates the overall direction in terms of the market share and market growth. On SIPs, which are again a foundational metric, we've grown to almost INR 90+ lakh SIPs registered during the quarter. You know that this number was in the INR 40 lakh- INR 50 lakh range year-to-year to 60, but one year back, it was about half this number. So we've grown almost 100% in SIPs. Like we've said in the past, this still does not include any momentum. It could be built out by micro SIPs or these smaller ones, which may get some broad blessing at the regulatory and industry level in the coming days. You would have seen that we also announced a strategic partnership with Google Cloud. This is to rebuild our RTA platform ground up.
You've seen press, some of the PR, our exchange releases, stuff on LinkedIn, etc., and on our website. But we are planning to completely build a brand new system. It will be very, very accretive from an efficiency perspective, accuracy, freedom from risk, all of that. But it also creates very interesting possibilities of business expansion. The current platform, as you know, is several decades old. So as we build this, of course, it will take time, but I'm very excited personally. I'm very close to the project just to drive this, what could perhaps be one of the largest things I would have done in the company. If you see beyond mutual funds, CAMS KRA, I think, is a compelling story. A compelling story has posted over 100% revenue growth. Never easy to do that in any set of circumstances. And I think two engines that are propelling this.
One is just natively MF. Natively MF have almost double the count of new investors coming in. And as that happens, the KRA is a core business. And the other thing is, like we've said in the last year and a half, that we've started getting into servicing brokerages, depository participants, at least those two segments. That's perhaps still between 10%-15% of our revenue contribution. So it hasn't really been the prime mover. It's one of the two prime movers. But as we scale outside of the MF capability and franchise in KRA, I think I believe there's still steam to go like this for some more time, maybe at least in this year. So that's a very heartening story. On the alternative side, we reported a total of 36 wins. We got our first overseas fund. Largely an inbound.
People who would like to work with CAMS will seek us out. So this is one of those where an inbound call has led to a contract, which has now got signed. On CAMSPay, we posted a 44% revenue growth, again, led by the expanding count of SIPs, but also led by all the other stuff that CAMSPay has done. I think a very, very heartening 44% growth. We were merged as one of the top players in the country in BFSI for UPI AutoPay. Now, that again, position happened because we were the first to craft an offering for MF and first to scale it. And then we continued to take it to other places inside the BFSI segment. Very pleased to share that with you. On REP, we had a great quarter.
I still would not say that you should read a lot of revenue or profit contribution from insurance coming in yet. I think about all the market-led activities of everything. Stuff is very good. For the first time ever, we opened 1 million electronic accounts for insurance, added 1 million policies. Our traditional run rate used to be about 500,000 a year back. About a quarter or two back, we scaled this to about INR 700,000 lakh- INR 800,000 lakh in a quarter, without hitting over a million. Speaking to the same thing, this quarter, Bima Central has gone live. 40,000+ downloads, almost 150,000 unique active users coming with various requests to be performed on the insurance account. Actually, largely on the insurance account because from an insurer perspective, we have a small number integrated.
As we scale this from now, one or two insurers to about seven to eight by the end of the year, I think Bima Central should see significant scale-up and acceptance. Some of these transactions, etc., will be revenue-accretive. The policies are. So insurance is still slower than what I would have thought. But again, at the base level, very good work happening done by the team. Account aggregator, I think another great emerging story, what gives me a lot of happiness is to share with you that we've expanded from two years ago. I reported a 2%-3% market share. Last quarter, we were spoken about 30% and 16% market share of customers. Linked to the AA ecosystem continues to scale across offerings, including in the analytics-led Amaze offering, which is largely the personal finance management and the lending use cases.
Revenue is still in the range of INR 1 crore-INR 2 crore a quarter, so not a very significant number. But I think from a percentage growth perspective, it does please me that it's on the right track and doing well. So as you can see, as I've said, look at this as multiple cylinders firing. Core MF grew at about 26% revenue. KRA at 100%. P in excess of 40%. Account aggregator, as we're not reporting percentage revenue, percentage growth will be upwards of 100% in a small base. And this still then leaves insurance to kind of add to the kitty. Right now, there's not a lot of lift in the insurance business yet. It will happen, let's say, within this year. So very, very positive on the non-MS portfolio. We've said earlier that we'd like to scale MF 15, non-MS 20. Non-MS has scaled 31%.
I think for a quarter or two, we could expect mid- to high-20s, maybe up to 30% growth from non-MS column. Excellent. Some of the data you guys have seen, so I'm not going to spend a lot of time on this. I think one thing I'd certainly like to call is there are significant highs in transaction volumes, which is obviously from a relevance perspective, very good for us. From a readiness perspective, both staff, offices, BCP, data centers, processing capacity. We made the investments. We're continuing to make the investments. You're seeing almost 50% growth in transaction volumes year-on-year, which talks about by itself, talks about utilization because it's grown faster than assets have grown.
All the other numbers I've spoken about, I think the other number I'd like to call is that from a unique investor growth perspective, I call it a foundational metric because more unique investors you get in, the more is the chance that they will come and register the first SIPs and the next and the next of bringing money. We did very well. 28% growth versus 20% of the industry overall. I think apart from that, equity net sales, the fact that we are holding share at 71%, NFO, we were at 82%. Overall equity AUM, we expanded share. All of those are just good metrics to have an offer. We'll do next. Sorry. Chart number nine, I think is the stuff you know. I just skipped through this. Go again. Google Cloud. Hello.
I'll talk about the individual businesses or alternatives on the back of healthy signing, both CAMS Alternatives and from Fintuple . New client acquisition, almost 36 new clients. This is a mix of people who want to do AIFs with us. Also GIFT City. The onboarding platform, which is well served and wealth truck so essentially four of those offerings. I've all scaled. I spoke about the first overseas fund administration contract and GIFT. Fintuple's platform is doing well. It is already active with one of the large banks. The other banks are now, some of the private sector banks are expressing interest to broaden this out and to adopt the same offering. So very hopeful of signing a couple of new contracts with Printuple. They've also built an offering for pension fund managers and POPs, largely from an onboarding perspective.
And again, we're expecting to sign the first audit shortly. Just keep your eyes closed to this detail. But again, very pleased with the way the team's scaled up that business. Go to the next. On KRA, I think I've spoken. 100% revenue growth annually. 10% in subsequent quarters or Q and Q. Continue to sell. I think one of the things which is good and which will add heft over a period of time is that the fintechs are coming in large numbers to do business with us. Just broadly, I would say it's not just a CAMS KRA phenomenon. It's a CAMS KRA payment account aggregator, at least those three. And then we've now blended the onboarding journey, powering it through things. So I think that's become a compelling solution. 18+ million , about INR 1.8 crore, just short of INR 2 crore unique banks.
We're expecting to cross that sometime in the calendar year. Go to the next. On REP, I did share with you that we crossed for the first time ever in our history, 1 million electronic accounts, 1 million new policies. We still haven't done a lot of marketing from a Bima Central perspective or an EIA perspective. So this has gone well. We are reporting a market share of 40%. This is kind of over between 35%-40%, as you know. Our traditional base was getting 500,000 new policies. That's up to 1 million. We've done about just short of INR 8 lakh policies in the last quarter, expecting that we'll be able to hold this metric. Also, what was very heartening was that one of the leading life insurers just migrated their entire in-force policy book to CAMS REP.
These are those insurers who, instead of going to their customers one by one by one and inducing them to open EIAs, they just shake hands with us and say, "Why don't you open an EIA for everyone?" And then they move the entire policy base. So obviously, those are the kind of deals we like to do. This one was unique that the entire in-force policy base has come to us. It does impact market share and, of course, the attractiveness of the product. Several other contracts were added. And I think Bima Central is now active, which means it has, like I said, 40,000 app downloads, almost 7,000 people coming to do transactions. Although the number of integrations is still small, as we expand integrations, it will still take place in the October, November, December timeframe. It takes some time to do the integrations.
We are expecting a significant leg up in terms of number of transactions that we do. Move to the next. On payments, like I said, the product offerings are fortified quite well. We spoke about payment aggregation being a core business, adding payment gateway to that. Like we said, in a niche manner, trying to open the education segment as another niche in addition to MBFC. Of course, we will remain confined to scale and profitable niches in the payment business. The revenue up 44% annually. Very heartening, 21% quarter-over-quarter. I think digital payments and UPI in particular scaled very well. UPI is also becoming the autopay is becoming a popular instrument for payments of SIPs and regular insurance payment payments. So that part has done well. I think across the board, we continue to add clients, like I said, fintechs, non-fintechs, housing finance companies, all of that.
And you will remember in FY 2024, we had announced the deal with IC for authentication services. This is something that we are no longer doing. And this is all live, and we'll continue to scale over the times to come. So payments, I think, is just got the act right in terms of basic work. And while our stated position is to grow non-MF upwards of 20%, I think there is a possibility to continue growing, at least for the rest of both AIF and KRA, in the rate that we've reported, and they could continue to fuel non-MF growth in the year. Next. On FinServ, again, very pleased to share with you that we continue to add FIU users. We, of course, on the F&O segment were the first to start the use case.
But across people wanting to do the personal finance management use case, both RIAs and now you will see mutual funds. So our first couple of deals are actually signed with large mutual funds. You will see active participation from them in showing your portfolios on their website, doing some hundreds and product comparisons. I spoke about the 16% market share of customers successfully linked to the AA ecosystem. And then the data deliveries have crossed now at INR 32,000 lakh per day. It's almost INR 1.5 lakh. And on the bank statement analyzer platform, we continue to scale up with new signings, largely NBFCs right now, people in the lending space. Revenue growth looks stratospheric on a very small base. We would like to have similar numbers as we scale.
So we will talk about AI revenue, I think, starting next quarter in a more meaningful way, but very happy with it. NPS, I think, has been a slower portfolio for us. We got a first corporate client, by the way. So got the first corporate client and got about several thousand corporate subscribers. That's something that added to the numbers. We're also now becoming, just given the style of offering and the automation becoming more popular with the POPs, so trying to get the non-corporate business, the retail business, from the POPs. And of course, onboarding fintechs. So we reported, continued to report a number of new positions in ENPS at just under 7% market share. So that part is going okay. Slower than what we thought, but happy with the progress. Think360 has, as you see, we penetrated LIC through payments.
Now, Think has been enabled as a fintech enabler. We launched a product called Affluent360, which is a data analytics, a market-led data analytics platform for mutual funds. We won the first mandate. We continue to scale the TSP++ part of account aggregators made and sold by Think. So the GST analysis, the bank statement analysis, and the personal finance management, all these three use cases are built by them. And then KwikID continues to expand. You know that we are operating with some of the largest PSU bank. We continue to expand both banking and NBFC clientele. And KwikID is now becoming a standard kind of front-end module for all the KYC work that we do across the group. Next.
So I will pause here and again just reiterate that it has been immensely satisfying for me and for us as a management team to bring forth these kind of results. And like I said, this is segment after segment after segment which has performed. Of course, it's taken us more than three years to get here. We've made the investments in things like account aggregator and things like Bima Central and started building the payment gateway platform, MFCentral, those kind of things, and NPS. We started in all earnestness back in 2021, 2022, were times when we were scaling costs and scaling investments. But today we have sales teams very, very comparable and sometimes better products. A lot of times better products than fintech competition, which means the explanation here, the journeys are smarter.
The buyer just prefers us over others, not just in the traditional MF or MF-led segment, but in several of the newer segments. And we also believe that riding on tech product superiority, all of the controls posture, and the technological finesse of the group that we can continue sharing similar numbers with you. Of course, MF did support through the very large both the revenue growth and the AUM growth. But very satisfying for us as a management team to share these results with you. I'll pause here and kind of have this over to Ram Charan, and he'll speak to you about the financials.
Thank you, Anuj. I'll just take five minutes to go through the broad numbers. Most of it will be a reiteration of what Anuj said in the earlier slides in terms of growth and profitability.
Our revenue grew 27% year-over-year almost, which is on the back of the growth of the assets. The assets, as you would have seen, has hit INR 40 trillion for the first time, INR 40 lakh crore gross. So on the back of growth of assets of 35% year-over-year, we grew the revenue 27%. On a quarter-over-quarter basis, the revenue growth was 6.7%. The assets actually grew in tandem with that. So it's almost a INR 70 crore revenue increase on a comparable year-over-year basis, and most of it coming from the asset growth, which is the mutual fund revenue. And on a quarter-over-quarter basis, we grew with 7%, which is almost a INR 21 crore increase in revenue. The asset-based revenue, again, mostly in tandem with the growth in assets that you saw, grew 27% year-over-year. INR 242 crore is the number, and 7.7% quarter-over-quarter.
Again, the quarter-on-quarter number is almost in line with the growth in assets. We see that the yields, which we had guided earlier, would stabilize over a period of the last few quarters. We've seen that play out actually, and the yields have been largely stable with the quarter-on-quarter depletion being less than 1%, right? It's 0.7% depletion yields. We also had said that there's not going to be any disproportionate reduction in price or price discounts. Kind of the last few quarters have been in line with what we have guided. Of course, the equity mix is helping us in terms of the yields not depleting and being stable because the equity mix currently is upwards of 3%, which is kind of helping us in the overall mix perspective.
The non-asset-based revenue grew by 24% almost year-on-year, which is largely driven by increase in transaction revenue. Transaction revenue is almost 40% of the non-asset-based revenue. Both transaction revenue and their application revenue and their call center revenue, all of it grew more than 20%. In fact, the transaction revenue grew more than 30% and the call center grew more than 30%. So all that is contributing to a healthy growth of 23.4% on a non-asset-based revenue. The non-MF revenue, Anuj was mentioning that the heartening part of the entire picture is the non-MF revenue growth is outpacing that of the mutual funds for the second consecutive quarter. So the non-MF revenue grew by 31% year-on-year, driven largely by a very impressive growth that we have seen in both pay as well as in KRA.
The AIF and REP revenue growth is a little muted, but you've heard the plans that we have for both, especially with the REP with the Bima Central going live only in April and more and more integrations happening. We expect that the revenue growth will be more substantial going forward. However, overall, as a non-MF bucket, we grew impressively to almost 31% year-over-year, which is higher than what we grew from a mutual fund perspective. So from a revenue perspective, all-round growth we are seeing. Very satisfactory quarter, excellent quarter in terms of growth of numbers in both MF and non-MF segments. We come to the profitability. Excellent quarter in terms of profitability. We have completed the quarter with an INR 150+ crore EBITDA for the first time, which is a 45.4% quarter.
You will also understand that April is the time when most of the company goes through its annual salary increment. Traditionally, the impact of the increment has been upwards of 2% of revenue. So even keeping that cost, we are able to kind of come to an operating EBITDA of 45.4%, which compares with the 46.1% in the last quarter. So what generally is a 200 basis point drop is actually only a 0.7% drop in operating EBITDA. It's kind of highlighting the cost competency as well as operating EBITDA that we enjoy in the business. So overall, a very good performance from an operating EBITDA perspective. In line with that, the PBT is at INR 134 crore growth of 41% year-on-year, and the PAT has grown almost 42% year-on-year with a healthy rate of 32% in terms of margins.
So overall, return on net worth is, again, continues to be very impressive at 44.4%. And we ended the quarter with a cash and cash equivalent of INR 718 gross. This 718 gross is before the disbursement of the final dividend, which was around INR 81 gross within the last month. Very healthy cash and cash equivalent closing out around INR 718 gross. And the board was pleased to declare an interim dividend of INR 11 per share in its last meeting. So from a profitability perspective, in fact, on the incremental basis, the EBITDA grew almost 58% on the incremental revenue versus incremental cost. So we had a tight niche on the cost too, given that this is a salary increment, is almost more than 2% of the revenue. We have managed to retain the cost reasonable levels and the margins at a very nice level for the current quarter.
The remaining comparative trends are given in the presentation for you to have a look. We've all seen an increase in the trend in terms of profitability, in terms of growth, in terms of PBT and PAT, all just pointing to a good year coming forward, given that the assets continue to grow. With this, I kind of conclude this financial part of the presentation and hand it back to the moderator and open it up for any questions.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
The first question is from the line of Prayesh Jain from Motilal Oswal. Please go ahead.
Yeah, good morning, sir. Congrats on great set of numbers. So firstly, on this, the cloud thing that you are implementing, what are the kind of costs that will be involved? What will be the timeline period? And so this is basically the entire RTA platform that you are moving to cloud. So what are the customers on board with this?
So Prayesh, the cloud is a multi-year project. It's a re-engineering of the entire platform to make it future-ready. It's a re-architecture of the platform. It's expected to be a longer project. The entire project could get completed in four to five years. However, it's a module-based approach that we are taking, which means that we will not wait for the entire five years to go live with the entire platform.
It will be a staggered phase-wise implementation that we are doing. It will also give us enough time for us to test it out. Yes, the customers have been communicated, and they are largely on board. We have communicated to all the stakeholders. However, this is something that will take some time to be implemented. Even the first model will go live probably only a year from now, and the entire thing would take four to five years. As you know, this is a very complex re-architecture project, and we are very cognizant of the fact it needs to be future-ready. From a cost perspective, we have done the numbers, and we do not expect a significant on a net basis post the reductions that we get from the existing resources that we are deploying from an IT perspective.
We do not expect at any point of time the impact of margin to be more than 0.5%. It could be higher in the initial one or two years, closer to 0.5%, but going forward, because of the rationalization that is going to happen on the various resources that we are using for this platform, we expect that from the fourth or fifth year, this will become, in fact, very positive to us from an overall margin perspective. And even in the interim, I know it is not going to be a significant impact. At most, in a given year, you could have a 0.5% impact on profitability. Those are the numbers that we have worked on, and we are confident of kind of clearing up to those numbers.
Got that.
Secondly, on just a very basic question, with the markets correcting the way they are today, possibly any of the further correction here, it is a move back, right? The telescopic structure, if the AUMs correct below the threshold levels, you get a higher reset, right?
That's correct, Prayesh. Although it gives us more joy that the field is going up, but yes, on lower assets, which are higher, just like on higher assets, which are slightly lower.
Okay. Got it. And from an expense perspective, how do we see this year panning out? So employee cost that has come, should we maintain that kind of run rate? And also on the OpEx, if I look, the run rate has gone up significantly as compared to last three or four quarters. It's been moving higher. How should we look at this? And where is this bulk of it going?
The incremental OpEx, where is it going?
So I guess break it up into two, which is the employee cost and then the operating expenses and other expenses. So from an employee cost perspective, as we mentioned in the earlier part of the presentation, that this is the quarter in which you see the employee cost going up because of appraisal. Overall, on a year-on-year, it's gone up by almost INR 18 crore, if I'm not mistaken, out of which most of it is almost INR 8 crore of it is because of the increment that came. And part of it is because of the hiring that we have done. We have invested a lot on talent. There is a field program where we've invested by getting in people from IIM, IIT. It's almost 45 people out there. The new leaders who are going to take this company to the next level.
So we've continued to invest in talent. However, from a run rate perspective, if you had kind of modeled it in, I would say the current base cost will hold good. There could be an increment of probably INR 2 crore coming in the current quarter because of some part of the management team gets its increment effective from July. But apart from that, we expect that the employee cost would not go up significantly for the rest of the year. It will be the base that you could go up with. If at all there is an increase that happens, it will be largely driven by some investment in talent, which I think we have got on board the early part of the year.
So barring a couple of gross increase because of the usual increases in manpower over the next quarter, I don't think there will be a significant increase towards the base cost, what we have seen in the first quarter. The other part of it, yes, there has been. You would see that almost like all together, 10, 11 gross of increase of expenses. I think 12 gross of increase in expenses year-on-year happened on operating and other expenses. See, part of it is driven by the variable part of the cost. For example, you see the CAMSPay growing 40%, and most of the variable costs that incurred, which is the work we pay to these sponsor banks for its charges, etc., that will go up correspondingly. Similarly, there is this data entry cost, which goes up because there is a higher cost from an NFOs and folios perspective.
All our businesses, barring MF, is on the cloud. This is an entirely cloud-based model, office-based model we have for our pay business, for our REP business, for our account aggregator, DSP, CRA. Everything is on cloud now. There will be some proportional increase that happens. The only comfort I will give you is that generally, our variable cost, which is operating expense, including the OP, and if you see out of the 8.5 gross increase, almost 3 gross is OP expenses. It's got a corresponding revenue line item. Keeping that aside, our growth in operating expenses is generally static on generally correlates with the revenue variable. It's around 7%-8% of revenue is my operating expense, and that relationship has been there in this quarter too. We don't see any disproportionate increase there.
The absolute number, yes, you will see it going up because of the revenue increase on these particular verticals that I spoke about, which is the cloud-based verticals as well as the NFOs, as well as the expenses that pertain to CAMSPay. Apart from that, it's largely in line with the overall trend that we are seeing. The fixed expenses, yes, this time there was a few crore, I think more than INR 3 crore of increase on a quarter-on-quarter basis, sorry, year-on-year basis. Mainly, this is also the year in which month in which we kind of do some leases renewal. We do increase the insurance facility for our employees and some such travel, etc., or CSR expenses. So that's seeing this increase. Broadly, I do not expect this base to be altered drastically in the coming months.
The 12%, including OP and 7%-8% other than OP, correlation with the revenue will exist for the operating expenses. The fixed expenses, barring some 5% increase here and there, I don't think the base is going to change drastically.
Got that. Thank you so much. I wish you all the best.
Sorry, the only thing I would add to this is that just remember that we are also in a very competitive talent market. In that competitive talent market, this year we chose to give right-sized increment to what we've done because it's a workforce which has several options. Like Ram Charan said, we are now in a quest to modernize and transform the company. We're getting top-tier talent from the IITs, from the IIMs.
We are now, for the re-architecture program, we've hired doctors, people who applied for patents, those kind of profiles coming from Indian Institute of Science and IITs. All of that is foundational because when you get people of that kind, you can, I mean, one man will do five people's work, but you have to pay them the money. So the expansion in labor cost, I think, was well anticipated. It was in preparation for the future. The good thing is that all of that has happened in the first quarter. A lot of it has happened in the first quarter. I wouldn't say all, but maybe about 70%-75% of that expansion is already in the books. So you're seeing the results post that. The productivity from this workforce, the salience in the market and the wins, etc., will follow.
But I think it's just foundationally the right thing for us to do with what we've done.
Got that. Thank you so much. I wish you all the best.
Thank you. The next question is from the line of Abhijeet Sakhare from Kotak Securities. Please go ahead.
Yeah, thanks. Good morning. I hope I'm audible. Anuj, you mentioned about your excitement around the new business opportunities this new platform can create. So if you can elaborate on that, please. And the related question is that generally, we viewed the RTA business as a business model which has fairly stable fixed cost. But with Google coming on board, does it significantly variabilize your cost? And what does that mean in terms of what you charge to your clients and how clients also look at your profit margins? That's the first question.
So on the first part, I think of very interesting possibilities emerging from the platform rebuild because, like I said, the current platform is a few decades old. Our ability to bring in components of taxation, charges, currency, data management, querying the data, insights, and reporting will become significantly superior. Why will it become significantly superior? Because today, for everything, I have to create a server bank in-house. And then on these things, I may have the payload for a day or two or three every month, but I still have to build it, and it still cannot match the finesse and the scale of what you can do on the cloud. So one is just the heft offered by the cloud from a computing scalability perspective. And if you need temporary capability, that could be easily bought for a few days or hours, weeks, and a month.
But the second is, given the fact that we are rebuilding and reimagining everything from ground up, I think a lot of components that we had bolted on from outside, so think of WhatsApp communication, for example. You've got to bolt it from outside. But if you're natively building a platform, all of this can be just part of the base, which is how we are thinking of it and imagining it. So that's point number one. Point number two, at the levels of scale that we are seeing, so eight years back, when I joined the company, we used to register INR 3 lakh SIPs. In a month, we registered INR 30 lakh SIPs, and I don't know whether this will scale three or five times. So at some time, just given the volumes and the retailization, you've seen that the transactions are growing ahead of assets.
That's just one metric of retailization. We want a capacity model which can scale up as we need. And beyond the point, building your own data centers and scaling your own data centers is a job that most people have stopped doing globally, right? It's a specialized job. You either go into a co-located data center built by a global major, or you just think of cloud computing. We've been at the colo centers for the last five years. We've decided to now go into the cloud instance. And like Ram Charan said, every other business, although you can argue they're small, and none of them is even 5% the size of the mutual fund business, but uniformly across payments, insurance, CRA, account aggregator, MF Central, all of them are on the cloud. So we have enough experience in the group.
Does this change anything as far as the charging model is concerned? The answer is no because the charging models are neither predicated on our operating model nor on the model of the cost. So from a slightly CapEx-heavy model, which will morph into a more OpEx kind of model over the coming years. But I think as far as the marketplace is concerned, their belief and agreement is that we will be significantly more efficient, faster, more contemporary and modern in our capability to both ingest technology and deliver outcomes consistent with that. So like I said, when you bring a set of IIT graduates, postgraduates, and doctorates who applied for patents, it's our desire that we will deepen that effort, right? So to usher in that era into our operations, obviously, we had to do something different, which is what we are doing.
And I don't think from a marketplace perspective, this is going to materially alter the charging capability of this time.
Just to add, Abhijeet, if anything, and we spent a lot of time on the drawing board with this strategy. If anything, I think it gives us some flexibility on cost management, right, in terms of making this cost variable. So I think we have what it takes to kind of monitor that on a continuous basis. Obviously, cloud is a different animal altogether. So I think from a cost perspective, we will at least get flexibility on managing the cost as we go forward.
Hey, thanks for the detailed answer. The second one is on the alternatives. Just wanted to get some sense.
How is that market evolving in terms of pricing, if you could, with some examples around the large deals that you've done, whether these are the project-level pricing or license type of deals, or there are some AUM-linked pricing, if you could explain that will be very helpful.
So if you do have a closed-ended fund, and given the number of investors, it's not going to be more than 1,000 at any point of time. The preference for the market, and I know you're hearing a different thing from the competition, but the preference for the market very clearly has been to do this pricing based on number of investors, right?
Barring open-ended funds or Cat 3 funds or where there could be an upside in the terms of assets under management, we see a marked preference, in fact, a condition that the pricing would be determined by the number of customers. So the deals that are being closed are slab-based, but the slab is not determined by the assets under management, but determined by the number of customers onboarded, right? For example, zero to 100 could have INR 8,000 lakh-I NR 10,000 lakh or INR 1 lakh per fund. So it is always fund-customer-based, generally, customer-based kind of pricing that we are seeing in the market. And that's been the trend in the last few quarters, in fact, over the last more than a year for sure. And we don't see the fund managers being open to some other pricing module for such kind of funds.
That's the experience that we have had in this sector.
Got it. I have one more. I'll join back in a few. Thank you.
Thank you so much. The next question is from the line of Devesh Agarwal from IIFL Securities. Please go ahead.
Good morning, sir. And congratulations on a great set of numbers. I just wanted to dwell a little bit more on the non-MF business and continuing with the alternative question. So as you also acknowledged that this quarter, the growth was slightly subdued. So just wanted to understand, are there any one-time implementation fees that we generally have, and that can lead to quarter-on-quarter volatility? That is one. Second is, basis your revenue model where you said it will be on the number of investors. Do you get any benefit if additional capital is drawn from the existing set of clients?
Lastly, what is the expected growth for this particular segment that you think you can achieve?
So Devesh, I'll try and answer your question. If I do miss out, please do alert me. See, on the growth, yes, obviously, from a growth perspective, it's decent growth year-on-year. We did get to 12%-13% growth, but probably we would have liked it to be a few percentage points more than that. The nature of the industry, and we have been saying this, this is that sell kind of an industry, right, which is that the funds, unlike a mutual fund, will have a life, and the life will end, and the fund will shut, right? And then we'll have to be replenished. We'll have to be replenished, and we'll have to grow 20% more than that.
So the dynamics are a little different when compared to MF in this particular industry. And so there will be some period in between that you will see funds shutting down in terms of their life being over, not shutting down, as in their life being over and liquidated, and the new funds coming in. And then there is a lag between the two. So this will play out for some time. And we do not see this drastically reversing in the next few quarters too. So that's the outlook. The outlook is that we will try and kind of optimize the growth, but I don't think we will see a 25% growth in AIF over the next couple of quarters for sure. We will kind of maximize it and get it as close to 15%-20% as we can.
So that's the end of our internal year at least. From a billing perspective, we do not, barring the few funds, and less than 20% of our funds are priced based on AUM, barring the few funds that raise additional capital, I think the initial cost is built onto it. The way you look at it is, while we don't see the yields as the basis of billing, the effective yields actually remain stable, which is that whether you bill it based on the number of investors in a particular fund or based on AUM, the effective bids or yield always stays between this 1.25-1.5 kind of a thing on the RTA business, right?
I think that remains stable throughout, and the way we price and way we bill may be different, but the yield remains kind of stable on this business with respect to how we bill it. That's been our experience.
The only one thing I will add, Devesh, to this is that as a group, we don't like to over-engineer pricing. That means that we are used to long-term annuities. We are happy with long-term annuities. If there is an opportunity to break INR 100 of long-term annuity and get INR 80 of upfront price now, we don't do that because that just creates all kinds of lumpiness and trouble for you to understand and for me to explain. So we never do that. I mean, you've been watching our results for the last four years.
For the next many years, you will see that we do not, as a principle, create any lumpiness ever, even if it is in our control.
Yeah. Sorry, I missed that question. Sorry. It is that no, it is not skewed because of one-time implementation fee. Our model does not ask for a disproportionately higher implementation, just to add to what Anuj is saying.
Perfect, sir. That's very clear. Second is, sir, on account aggregator, although it's very heartening to see on a sequential basis we are gaining market share. But in terms of volumes and revenues, your expectation, say, for the year FY 2026, some sense if you can give us on that. So Devesh, what has happened there is, frankly, things are ahead of where I expected them to be. That's the first statement I would make. It's a great market where users are using this for several purposes.
It's a market where the user uses things, and he's willing to pay. Where is he using? He would ask for a bank statement, which I would give from my email at checkout and send him the password. He's using account aggregator for that. Like we said, the asset managers will now start showing you your portfolio live on their websites. They're going to pay for that. And there are multiple use cases, including what Think is building, which is producing a credit memo, which I sell for INR 20, which a bank will take a week to make. So that's a fantastic thing which has happened. Quarterly revenue, like I said, is still in the INR 1 crore-INR 1.5 crore range. So we will be lucky to close the year at about INR 7 crore-INR 8 crore.
This is the first time we are telling you the numbers because they were less than meaningful earlier. In FY 2026, we will certainly target to be double-digit. I mean, I'll be happy if I can get to INR 15 crore. It'll be tough. But an INR 11 crore-INR 12 crore number looks entirely possible from account aggregator as a family. At that level, we will be at a break-even. We may make some margin on the overall product. We've crept up the market share, which is a great thing. So the only thing we don't like about the market is that pricing is significantly lower just compared to the price. It is not that the buyer is asking for it. The buyer is getting a lot of value. But the sellers are scraping the price, and sometime that has to end.
What started as a INR 10 piece product fell to INR 1, and at times, we sell for less than INR 1. If it stabilizes INR 1 too, I think it's a great business to make. If it stabilizes to INR 20, then it's not a great business. So pricing will perhaps determine where this goes. But broadly, apart from pricing on every other aspect, I'm very, very pleased with what the team has done.
Very helpful, sir. Sir, one last question. On the non-MF side, you said this will be like 20% of your top line by FY 2027. So just wanted to know, given the strong growth that we are seeing on the domestic MF side, one, is there any rethink on this number? And secondly, how important would be the inorganic opportunity to achieve this number? That will be the last one from my side. Thank you.
So Devesh, I mean, you've seen the company closely. It's our endeavor that every year we should have a 2% swivel, non-MF. If it is 13.5, should go to 15.5 this time next year, which means I should be able to take half a percent of growth and move it to non-MF as percentage contribution to revenue. Now, that model, when we thought of, we were confident of growing non-MF, let's say 21%-22%. We expected MF to grow 13%-15%. It looked possible on paper to do that. When MF grows 26%, then non-MF has to grow 35%-40%. Never easy. This quarter, we were at 31%. Like Ram said, second successive quarter, we may repeat this in the current quarter too. So we will hold on to our prediction. We will hold on to 20% three years from now.
While this is not the objective why we would do an acquisition, the acquisition will lead this to as an end result. We will not do it just to claim diversification. I think, like we've said, there are interesting opportunities. Like we've always said, that while insurance is a part of our portfolio, it isn't yet doing what it should do, but it does not mean it cannot do. So that's one area where you could see us make a move. Payments is another area. And of course, alternatives remains the third. So you will see us do something. Will that scale up our ambition? I think it has the ambition to get to 20% in about three years' timeframe. That is the way I would look at it.
Perfect, sir. Thank you.
Thank you so much.
Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your question to two per participant. The next question is from the line of Supratim Datta from Ambit Capital. Please go ahead.
Thanks for the opportunity. Now, my first question was on this transition to cloud. Just wanted to understand what could happen with the data centers that you currently own and operate. So is there a thought process that these data centers will be done away with, and hence there would be some capital that would be freed up, and what would happen with that capital in that case? So that's the first question. And the second question would be on the AIF side. Now, I understand the growth was weak, but when I look at the AUM growth quarter-over-quarter, that has also been weak.
So just wanted to understand from a competition perspective, given this is a multi-player market, are you seeing anything different from competitors when it comes to pricing or when it comes to aggressiveness? Just wanted to understand that. Those were my two questions. Thank you.
Sure. Thanks, Supratim. So on the first one, think of it this way, that gradually, like in any other cloud implementation, we will slow down our investments in data centers. And over a period of time, we will migrate the payloads to cloud. Can I migrate a payload today? The answer is no. What can I migrate a year from now? I think a lot of our, for example, analytics, reporting, all of that can move in a year. Even after we migrate to the cloud, statute will require me to have a copy of the data on-prem.
I cannot get rid of all the data centers. We have three instances. We are setting up an ad up one, which is the fourth. Of the four, you will still see one continuing. For our core MF business, we will need to have a copy of the applications, I mean, fit to perform, and our database on-prem itself. But broadly, think of it this way. It is like any other implementation over a period of time, successively every year. You will see our investments come down. You will see us migrate payload to the cloud. Could we have fully done, let's say, in a 5-year timeframe? That's the first thing to expect. From an efficiency perspective, like I said, it creates scalability much better. You know that there are month-beginning and month-end payloads in our MF business for which we create 2x capacity.
Where do we create it? I create it in three data centers. So my baseline would be 80 units. My spike may be 100. I create 200 units of capacity in three different instances across the board. That scaling and the optimization of that scaling will become a lot, I mean, it will become easier in the cloud format because once I can predict that I will have data payload between the 1st to 5th of every month and the 28th and 30th, theoretically, I'll be able to manage capacity-led cost better than I would do at a 2x level in three data centers because once I buy a server or storage or a switch, I just have it, and I pay for it fully. I can't do part use of it. So that's how the entire thing will play out.
On the AIF, like Ram said, our expectation in line with the non-MF portfolio is to scale that business over 20%. This quarter was more like the mid-teens. Not that we could not scale revenue. I think the growth scaling was all in place because we have the oldest portfolio in the country. And this is a closed-ended business, which means no fund will remain for, let's say, more than 10 years. So any fund which started, let's say, in 2014, 2015, 2016, 2017, one of those will come to an end in 2024. When you come to an end, of course, the provider will go and would have launched another fund at some time, but we'll take these monies and pay them back. That impact of falloffs was a little more in this quarter. In the first quarter, may also be a little more in the next quarter.
Otherwise, I mean, so that perhaps explains best the 20%-15% growth. The 5% is on account of that. Are we seeing any other dynamic from a competitiveness perspective? Nothing specifically. It's a market which has already seen some price down. So we are expecting prices will stay here, but will further price down happen? Not expecting that to happen.
And our reading is that we have not, from a domestic RTA perspective, we have not lost market share. Obviously, it's very difficult to make out from published numbers of competition on what exactly is the win ratio of the share in the domestic RTA as such. But based on our market intelligence and our computation, I don't think from a domestic RTA perspective, we have lost share as such.
Got it. And just one follow-up to your commentary on the data centers. That was very helpful.
Just wanted to understand, currently, you own three of the data centers, right? And so when you slow down the investment and at 1.5 years down the line, you will be migrating all the data to cloud, then these three data centers will become redundant. So would there be a scope that you would be selling off these data centers anywhere, let me say, four or five years out?
So I don't think I got your question completely. If you think there'll be some salvage value of the stuff in the data centers, some small stuff will be there. But I mean, don't count it in any projections. That's not a material amount of money. Was that the question, or what the question was?
Yeah. Yes. Yes. I'm just trying to understand that what happens with those data centers once you migrate to cloud completely.
So two of them are sitting inside our premises in our buildings. Obviously, the space will be used for something else. One is in a colo center, which obviously is bound by a contract. We will decide which one to retain. One, like I said, we will have to retain. Is there significant salvage value of the hardware? The answer is don't even count it. I mean, there may be something, but we don't want to bring any focus to that number saying that's a P&L and answer for us.
Just to add what Anuj already mentioned, it's relevant for this question, which is the investments going forward in hardware will be moderated depending on our progress in the re-architecture. So that could be an impact that will play out as we go forward.
Understood. Got it. Thank you.
Thank you very much.
The next question is from the line of Sanketh Godha from Spark Institutional Equities Private Limited. Please go ahead.
Yeah. Thank you for the opportunity. I have a few questions. So first question is that if I look at our KRA business, the number of KYC records seems to have not grown in last three quarters. It's been stagnating at INR 1.8 crore accounts. So just wanted to understand, do you see this number going up, or are you continuing to mine these number of records to deliver the revenue growth going ahead? And the second question was with respect to non-MF asset-based revenue, which seems to have grown a little lower compared to the overall asset-based MF growth, which is around 45% growth if I do the math. Just wanted to understand how do you see the trajectory of this number to play out going ahead?
The next one is on Think360. This piece has declined both on quarter-on-quarter and year-on-year. Anything to read there? How do you see these numbers to play out?
Yeah. So Sanket, so I will take the second question, which is the non-asset-based revenue, and Anuj will probably give you details on the remaining. The non-asset-based revenue, as you know, consists of transaction fee, consists of the call center revenue, consists of our application fee that we charge for our software tools like MFDEX and Chapek, etc., and the OP, right? So it generally does not move in tandem with, and that's why we have a separate tandem with asset-based fee.
What we have seen in this bucket is, and obviously, this is not a single kind of driver for all these things, but what we have seen in this bucket is transaction fee, which is almost like 40% of the non-asset-based revenue has grown more than 30%, which is, again, a reflection of what's happening in the market in terms of transaction growth as well as the NFOs that are coming. Our application fee, which is the software license fee that we charge for a way to release that the customers use, has also grown by more than 21%, and the call center has grown by more than 33%. What will kind of bring it down will be the OP, and obviously, OP cannot be linked as such to the asset rate.
That would be a fourth quarter in which generally the OP expenses are much more, if there's a regulatory guidance, then the SMSs and emails are much more, if there is a risk-o-meter that needs to be sent in bulk, if there is some nomination communication that changes. So a lot of drivers are there for the OP, which is very difficult to kind of tie it up to one metric. But the overall transaction growth, I think we are seeing it is in tandem with the assets growth, which is more than 30%. And the call center is also growing well, given that people are adding agents from inbound and outbound perspective.
So I do not think that you can map it to the asset-based revenue, but given that transaction is 40% of the overall bucket, heavy growth in transactions, as you see, would translate into a higher non-asset-based revenue, but it cannot be mapped one-on-one to the asset-based revenue.
So, Ram, just if you can break down that INR 45-odd crore into OP and the core revenue kind of a thing, that would be useful.
Yeah. Yeah. So from the INR 45 crore, recoverable is more than INR 11.2 crore, which is the OP is more than INR 11.2 crore, and your transaction-based revenue is almost INR 18 crore, and application revenue is almost INR 8.5 crore. Call center is around INR 7.5 crore.
Perfect. Okay. Got it. And on Think360, if you can. Yeah.
Sure. So your first question was on the KRA.
On KRA, what had happened was, you're right, there was a one-time cleanup that happened across the industry. As you know, amongst the participating KRA, one single individual can occur only in one place. Over the years, over the last 13 years of the occurrence of the KRAs, they discovered that there were some individual records which were in more than one place. Once that cleanup happened, you see the current number, but you notice it, right? That is the way it had happened. Now we have a constant base, and you should be able to see a growth on top of that. On the same—sorry.
Sorry. You expect this INR 1.8 crore accounts to grow only because of MF, or? So basically, I just wanted to understand, you got one-time jump from INR 1 crore- INR 1.8 crore.
So this INR 1.8 crore to go further up, what would lead to it in that sense? Basically, it will be MF story only, or you will go beyond MF to drive the KYC business?
So, like we said, that we are now actively engaged with the rest of the market, brokerages, and depository participants to sell KYC services to them and the KRA services to them. That is perhaps a 10% revenue contributor right now. It isn't that large, but it has helped. We still haven't got one of the top four or five brokerages. We actually have one, but not the others. We are actively pursuing the larger accounts, should be able to report something in the rest of the year, and you will find that even if we get a fraction of those volumes, that could be a large contributory number.
However, what has contributed right now is also a 2x lift in new PANs coming into MF. CAMS serviced funds used to see INR 3 lakh-INR 4 lakh new PANs. The PAN is an individual not known to CAMS serviced funds, INR 3 lakh-INR 4 lakh a month. That number has almost doubled, right? So when you see that number from INR 4 lakh is almost between INR 7 lakh-INR 8 lakh, a large part of the uplift has come from CAMS serviced funds. We started actively selling to non-CAMS serviced funds, the KRA services, about two years back, part of the growth is from them, but that's small. That will not be more than 5%-6%. About 10% revenue contribution would have come from us selling to brokerages and depository participants. So that's how you can add up the 100% growth. And most of these trends are sustainable.
Got it.
And on Think360?
On Think360, you're right. The scale-up hasn't been, not much scale-up has happened in the first year. One of the large reasons is that Algo360, which was kind of a precursor to account aggregator, we were expecting that for some time there will be a market for both the products, both for Algo360 and the account aggregator. Now we are seeing that the account aggregator market is definitely showing a preference for AA kind of offering, not so much for the Algo360 offering. So we have continued to engage with the market and sell. At some time, that question had to come on whether we keep selling the core or we start selling the value-added services under the brand name. I think we've seen some of that impact.
Also, one of the large - although it's not a major contributor, but one of the large U.S.-based analytics contracts hasn't seen the scale-up it needed. We are now not actively selling in the U.S. We are largely focusing on the Indian market. If contracts come from the U.S., we will service them, but we're not actively selling yet. So that explains what's happened at tech.
Got it. And maybe just one thing. You said that non-MF business, which is around 13.3, will go to 15 by same quarter next year. So is it fair to assume that heavy lifting has to be largely done by two businesses, which is CAMSPay and CAMS KRA? That's a fair assumption to make because AI probably will go mostly in line with the MF business, given it is limited to a number of investors rather than AUM-based.
So again, you're getting it right.
I would say from a percentage contribution basis, although I don't state the AA percentage revenue contribution, it is perhaps the highest. It is even more than KRA. So from a percentage revenue contribution driving the 13.3-15.3 or whatever number we get to, I think it's clear to me that in the next one year, next four quarters, between KRA payments and account aggregator, all three of them should contribute and should contribute ahead of the market. In the case of alternatives, we have said that we are aiming for a 20%+ growth at some time, maybe a quarter from now. We should come back to that. So that's really the sum total of what will contribute to non-MF. If there is any acquisition opportunity, obviously, there will be on top of this, but right now, this is within the art of the possible.
Got it. Perfect.
That's it for me. Thank you.
Thank you so much. Ladies and gentlemen, due to time constraints, that was the last question. I now hand the conference over to Mr. Ram Charan Sir for closing comments.
Thank you, Deepika, and thank you for all the participants, for your continued interest and participation in this call. If you have any further questions, please feel free to contact Anish Sawlani or Orient Capital, IR, and we'll be happy to get in touch with you and clarify your doubts. Thank you once again.
On behalf of Computer Age Management Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.