Computer Age Management Services Ltd

NSE:CAMS

Q2-2026 Earnings Call

[Operator]

Ladies and gentlemen, good day, and welcome to Computer Age Management Services Limited Q2 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to [ Nikunj Seth ] from MUFG. Thank you, and over to you, sir.

[Unknown Attendee]

Good morning, everyone, and welcome to Q2 and H1 FY '26 Earnings Conference Call of Computer Age Management Services Limited. From the management today we have with us Mr. Anuj Kumar, MD and CEO; Mr. Ram Charan, CFO; and Mr. Anish Sawlani, Head-Investor Relations.

Before we proceed to the opening remarks, I would like to give a small disclaimer that this conference may contain certain forward-looking statements about the company, which are based on beliefs, opinions and expectations of the company as on date. These statements are not guarantees of future performance and involve risks and uncertainties which are difficult to predict. A detailed disclaimer has been published in the investor presentation.

Now I would like to hand over the conference to Mr. Anuj Kumar. Thank you, and over to you, sir.

[Anuj Kumar, executive]

Thank you, Nikunj, and good morning, everyone. Welcome to this Q2 earnings call of CAMS. Like we've done in the past, the format remains the same, about 20 to 25 minutes covering this deck by myself and Ram, and then we'll have enough time left for questions.

As you would have seen the results yesterday, we had a Board meeting in the night. It was a very strong quarter for CAMS. We achieved our highest ever quarterly revenue in Q2, driven by what I would call our strong performance across the entire base. both MF and non-MF segments and within non-MF across all the key business lines.

So, despite the fact that we had a large price gap, given in the early part of the year, we scaled back quickly and this highest ever quarterly revenue is a strong testimony to that. So, just as a derivative, MF revenue grew -- I think quarter-to-quarter numbers are perhaps more indicative of what's happening. Year-on-year, you will see them muted, but Q-on-Q over first quarter, MF revenue grew 6.4%. Non-MF grew 17.9%.

You will recollect that 1Q was slightly muted in non-MF too, given what was happening to account opening and the right activities, which impact the KRA business. So, a very strong Q-on-Q growth, 6.4% MF, almost 18% non-MF. Of course, year-on-year, a little more muted, MF at 3.2%. Non-MF, I think, is holding [ clear by ] 15% year-on-year, so a growth number too.

Overall, from a mutual funds perspective, I think it's a very nice milestone. We've crossed INR 52 lakh crore AUM in the month of September. So the way I look at it is that we crossed INR 50 lakh sometime during the quarter, then crossed INR 52 lakh by September. On the best day in October, we have touched or crossed INR 55 lakh. So, in closer fashion, those are very nice moat building numbers. Market share remains at about 68%.

Overall, AUM grew 16%, broadly mirroring the industry. We may have gained share a little. I think the good news, the great news is on the equity side where equity net sales crossed about INR 1 lakh crore in the quarter. That's not a very common occurrence. It's the highest ever number for us.

Net sales market share, which is, like I keep saying, is a very foundational formative element of our overall mix. Net equity sales market share grew to 69% from 65% and they're just riding on the overall net sales number. Equity assets were INR 28.7 lakh crores. Inflows continue to remain sustained. The markets, of course, started doing well again. We're still far away from the all-time peak, but the markets overall did better.

So, equity net sales, both market share and absolute numbers, I think is a great vindication to what is happening. SIP collections, this is again another solid foundational metric, which has held on its own last 6, 7, 8 quarters despite the markets having been soft in a large part of that time period. This collection grew 21% year-on-year. And when you look at it that -- and this is perhaps a very large formative number. Again, this number grew 21% year-on-year.

Live SIP market share improved almost 2 percentage points, 63.4% quarter-on-quarter over 61.5%. And new SIP registrations continue to remain very healthy at over INR 1 crore, so about INR 1.14 crore registrations in Q2 FY '26.

I think the other parts, when you look at equity net sales, I think fantastic number. When you see SIP collections, a very sustained strong number. Live SIP market share improvement, again, a great indicator. I would say NFO sales is another thing where we saw just a fantastic action, 33 schemes launched during the quarter, 80% share of NFO collections.

I know that this number is typically between 65% to 80%. There are rare instances where it has cracked above 80%, but 80% is a great market share gaining moment for us. So that's something that we achieved. SIF product category, which has now been under discussion for a year, and you know that for the MF segment, it will be accretive. It will be accretive because it will take away some of the share from the less organized segment to MF company.

We launched the first one with SBI and got INR 1,000 crores for a brand-new segment or one of the schemes to just garner INR 1,000 crores and several thousand investors where your start is about -- we will have to commit to INR 10 lakh present. I think it is a very good start. For the first 3 or 4 months, let's say, back in September to December '24, the reaction to SIF was muted. Now we are expecting that at least 8 to 9 of our AMC's CAMS serviced Funds, so the biggest names that you've heard of, are very interested and you will see launches from now to March. You'll see launches from now to March. So a very healthy new product class, whether you want to call it asset class that's building up inside of the AMCs businesses, which is a hard thing for us.

From a new RTA mandate perspective, again, 2 great wins. You all know ASK Asset Managers for a long period of time, they run the largest PMS in the country, even today, one of the largest ones, PMS' they run. That was on they've chosen to come to CAMS. They've already been our customers for AIF.

Alphagrep Asset Managers, which is a relatively newer entity, has also decided to come to CAMS. So, this will take the MF RTA client count to 28. The second migration in 3 years, actually the third in 5 if I count FT in '21, Navi in '23, Torus in '25. So, the third successful migration of Torus happened. We've gone live recently in the last about 4 to 5 weeks. So that got accomplished.

I think another very, very foundational metric vindicating the majority of the organization we built and the strength of all that we are doing. We had onboarded several AMCs, 6 of which are live. So, for those of you who have downloaded the presentation, you can see, and all of this has happened within this calendar year. I'm talking of every event having taken place within 2025.

So, amongst our AMCs, we typically have a track record of launching 1 in a year because that's as many licenses that's used to come out, which is you would have launched, let's say, Parag by 2015, Mahindra in 2017, YES Bank in 2018, things like that. But in 1 year, we've taken live and all very, very remarkably well-known names; Angel One we all know, Unifi, Jio BlackRock, Ceybank Sri Lanka, Torus which is a migration and Choice, which is a very large sale and broking house. All these AMCs have been taken live within the year.

And again, I would say from a maturity and resilience perspective, this is 6x the workload that we did as a company or anyone else did about 5 or 6 years back. But all of this is live. These are performing AMCs collecting money, servicing investors, paying the distributors and doing thousand other things that are needed to continue keeping an AMC operation vibrant.

You will see most likely 3 more of them going live because that is a number of won AMC mandates that we are sitting on. Now we are towards the end of October. So whether someone launches in December or January or February, that's a matter of timing. But you will see, for us as a company, we have a fantastic track record of having taken live 6 already and maybe another 2 or 3 in the next 4 to 5 months. So that's, like I said, a great indicator of how we build the organization.

Go to the next. In the beyond mutual funds, I'm just flipping over to the next chart. Non-MF revenue. Non-MF revenue, which you know, we are focused on. We're building out salient business lines, making investments. And building scale, last 5-year compounded revenue growth of non-MF has been -- we've stated 25%, but the actual number has been 28%. So it's been very hard thing to scale that. But from a quarter perspective, CAMS' non-MF revenue share improved to 14.4%. This is total non-MF revenue divided by total enterprise revenue, this 14.4%.

Pay; CAMS Pay, which has been one of the leading lights grew 26% quarter-on-quarter. So, continue to see momentum in the UPI and UPI AutoPay businesses. You know that that's the flavor of the season. Today, continuing to scale in NACH and NACH processing because that's the spine on which the SIP business is built. We went live with the payment gateways and are seeing significant ramp-up in that business. So, we expect this momentum to continue in the coming quarters. So that's the leading light.

In non-MF, Alternatives, again, delivered the highest ever quarterly revenue, continue to underline the market leadership. The overall assets under administration line inching close to INR 3 lakh crores, added a significant number of mandates, 40-plus during the quarter. We entrenched our footprint in GIFT City. You know that we service over 30 clients from there.

The first outbound retail fund, which is a mutual fund scheme went live, which is DSP's Global Equity Fund. But you will see -- again, just like I was talking about SIF, you will see multiple schemes go live from GIFT City. So, I think the moment is coming when both investors, manufacturers, sellers are beginning to focus on that, given the administrative territory and make sure that this scale.

CAMSRep, I'm sure you've seen this on our website. You've seen this on many social media posts. Bima Central won 2 very, I would say, exclusive recognitions. One at the GFF that was accorded the status of the most promising Insurtech in the country. Cumulative user count in Bima Central went up to over 12 lakh. Transactions continue to scale. We also won 1 new contract for end-to-end servicing for the -- servicing [ this ].

KRA revenue rebounded, and look at the rebound, we had a dip from 4Q to 1Q. So 1Q, you saw depressed metrics for obvious reasons. There was a clamp down on F&O accounts opening. markets were soft, and therefore, new entrants to the broking community were limited number. But Q-on-Q, we've grown all the way back. We're still not at the highest ever revenue in KRA. I think in the next 2 quarters, we'll get there. But 45% revenue up in the quarter, indicating very strong recovery, added 38 new funds.

Also, we had announced, as you know, that we would be buying out through a business transfer, the NSE KRA business. This is completely on track. We needed an NOC. The NOC has been received. So, we're expecting sometime in the month of December, so we would have completed the entire operations transfer, including client contracts, whatever innovation has to be done. We, by the way, have contracts with all those clients, rebadging for employees, all the IP and assets and contracts will move away.

So, you will see net revenue accretion. It's not very large, but whatever it is, maybe under INR 1 crore a quarter, will start coming to us from Q4, which is Jan-Feb-March of '26. Think continued to scale back its -- scale its business, acquired 2 new analytics clients in the U.S., but for Algo360, which is the [ SMS ] Insights product, won some new contracts, including PayNearby, SmartCoin and a few others. So that part has done well.

But I think on a sustained basis, between Pay, Alternatives and KRA, KRA was a rebound, but strong sustained growth. And from a product and customer participation perspective, I think great news from insurance, too. So those lines continue to perform well. I'm personally very pleased with; A, bringing everything back. You would remember a conversation in 1Q and 2Q -- sorry, 4Q and 1Q of this year. So, we were expecting that after whatever revenue adjustments happened in the initial quarters, we wanted to kind of jump back to a highest ever revenue state quickly, which we have done as a company.

I think for MF to scale back to its peak revenue will perhaps take this quarter, 3Q. And from a non-MF perspective, our accent focus continues to remain on key business lines, and we will continue to see scale-ups.

I will now hand over to Ram Charan to talk a little bit about the financials.

[Sesha Ramcharan, executive]

Thank you, Anuj. I'll just add some numbers flavor to what Anuj said in terms of the overall business. So, if you remember from a yield commentary perspective, for the last few quarters, we had guided everybody saying that there is a price change that is happening with one of the largest customers and the impact will be felt across 2 quarters and 90% of the impact has been taken, and you will see some small tail impact in the current quarter.

Happy to say that's how it's actually played out also. So, if you see in the current quarter, the yield, we had said that we expect a 0.03 to 0.04 kind of yield compression quarter-on-quarter. That's exactly how this turned out to be. And bear in mind, this is on the back of no change in the equity mix also. Generally, higher equity mix gives us some benefit from a yields perspective. But in spite of a static equity mix, we are still at a very moderate depletion in yields, which means that what we have guided in terms of the yield movement has kind of played out exactly the same way.

So, on back of 7% growth in AUM quarter-on-quarter, we have grown the asset-based revenue more than 5%. The overall revenue has grown 6.4% quarter-on-quarter and 3.2% year-on-year. Non-asset-based revenue, there is some weakness. As I said, non-asset-based revenue is a separate bucket that we show to you because there are some drivers to it, which are not exactly AUM-based like OPE, which is more a function of the campaigns that we do and the statutory changes that happen or NFO that gets launched.

So, both of this was a little muted. So hence, you will see some muted growth in non-asset based. But overall, from a mutual fund perspective, we have grown 4.7% quarter-on-quarter. And as Anuj mentioned, it's kind of -- we are back on track in terms of almost tracking to the highest ever mutual fund revenue, which we hope to obtain in the next quarter.

Non-mutual fund revenue has -- again, last quarter, we said that there could be some dip in pay, but we expect that to come back to normal. And this quarter, again, happy to say that the growth rates are back from a payment business perspective. And the KRA and payments together on a quarter-on-quarter, we have almost 18% growth on revenue, came back to the higher growth rates that we are projecting from a non-mutual fund perspective.

So, we are on target overall to broadly reach the 20% growth year-on-year that we are projecting from a non-mutual fund perspective. So, from all this and from an expense perspective, we had a muted quarter. Again, at the beginning of the year, when asked for a projection, we said that we will try to keep the cost increases on a year-on-year basis to around 10% to 11%. Happy to say, again, we are on track for that. There is some one-off expense that's happened from other expenses perspective for a couple of crores. This is more a provision made for a delayed collection, which we hope will get reversed in the next quarter.

So, overall, we are on track. In fact, barring depreciation, the quarter-on-quarter expense growth has been much less than 5%, right, which is a very muted growth in expenses. So, expenses are broadly in control. And on a quarter-on-quarter basis, we have seen almost 60% of the incremental revenue flow to the bottom line, which means that the profit margins are back to more than 44%. On an EBITDA basis, we've got almost a 90-basis point increase in EBITDA in the current quarter. And from a PBT, we are at almost 40% PBT and a PAT of almost 30%, 29.6%. So, all the metrics are trending upward this quarter, and we think the next quarter could be stronger than this if the assets inflow do sustain.

So, overall, the performance was back on track, good performance, a strong performance in the quarter, and the Board was pleased to declare an interim dividend of INR 14 per share from the reserves of the company.

So, this is the summary of the financials. I'll now hand it back to the moderator and for opening it up for questions.

[Operator]

[Operator Instructions] The first question is from the line of Madhukar Ladha from Nuvama Wealth.

[Madhukar Ladha, analyst]

Congratulations on a good set of numbers. My question was more on the non-MF side of the business first. So, this whole CAMS KRA, we've seen a good rebound over here. And I think in your presentation, you mentioned that you added 38-plus sort of new clients, which are primarily non-MF. So, I want to understand which is the client category or which type of clients are getting added over here.

Second, of the KRA revenue, how much of it will be sort of new account creation and how much will be Fetch numbers? And then finally, on the rates that we get for a new account creation and Fetch, can you give some color on that? What are the rates over there and what is the competitive pricing? And what are the total number of records that we have? So, that's on the KRA side.

And second, now in light of this, again, discussion paper by SEBI, which came in last evening, there seems that, again, the TERs are getting cut at least there's a direct sort of 5 basis points impact and then also sort of 15 basis point reduction on TER, but there is just some -- also some benefit on GST, et cetera, that will come. So, I know it's too early to ask this, but the worry is obviously there that, again, AMCs come and cut yields. So, what will be sort of your reaction? And how do we sort of alleviate these fears? Or what -- how do you think about this? These would be my broad question.

[Anuj Kumar, executive]

Sure. So, let me start with the first part of the question, which was on CAMS KRA. We have now totaled close to 2 crore PANs. With the induction of NSE KRA, this will go to -- will increment by about 13 lakh, 14 lakh PANs. So that, when you think of us in the coming quarter, think of us like CAMS KRA having about 2 crore 15 lakh, 2 crore 20 lakh PANs. And that is sustaining this commercial activity of approximately INR 50 crores annually of revenue.

Today, I think when you look at the market, you know that this activity is a lot more intense in the non-MF segment than in the MF segment. For obvious reasons, MF account opening has been at a much faster clip for many years, which is both demat and broking. With F&O, that number increased. This part, just think that in the last 3 years, this entire about 28% to 30% revenue contribution to CAMS KRA is brand new. This did not exist if I take you back to, let's say, FY '22, we did not have this segment. This 30% contribution has got built.

In this segment, I would say, the real scale trick is to win one of the top 10 clients and get them to stay with you because, frankly, 28 or 30 or 40 clients are typically, let's say, fintech clients, smaller demat clients, smaller broking clients. But the mass -- it's a long-tail business. The mass sits in the top 10 or top 15. So, our focus always has been to get those clients, never too easy. And like proposition always is to get someone to start working with us, not for price, but for quality and delivery reasons, ask them to contribute 10% to 20% to CAMS KRA uploads and downloads and then go from there. So that's really the focus of the team.

I think the redeeming feature is building from 0 about 28% to 30% of revenue contribution from non-MF has been a big thing. So, think of it as about building 8% to 10% a year. If we can do this for the next 3 years, I think that's a great growth trajectory because most of the CAMS service -- MFs will continue to work with CAMS from a KRA perspective. But this is brand new, and this is what is driving growth. So that's part one of the answer.

Do you want to add something to that, Ram?

[Sesha Ramcharan, executive]

Yes. Just on the rates, Madhukar, I think the rates have been very stable. So, without getting into specifics, we have seen the rates to be very stable from an upload and download and IOP perspective. So, we see no big concern on that. If at all, there is some [ net addition ] that may happen, that will all be driven by volumes. But as of now, the range seem very stable for this.

[Madhukar Ladha, analyst]

Understood. And just on the KRA part only, what percentage of the revenue is for the new sort of records that got created? And of the now INR 2.2 crores approximately and INR 20 lakhs are from the acquisition. So, of the INR 2 crores organic CAMS KRA, how many records would we have added in the last 3 years? And are we seeing any sort of material increase in the record addition now? Because I think longer term, the person who has more record is in a better position, right? So, some sort of -- is that the way to think about it? How do you -- yes, think about this.

[Anuj Kumar, executive]

So approximately, you will probably have uploads of 10 lakh to 12 lakh PANs a quarter, right? 10 lakh PANs is probably a good estimate to have, which is the fresh PANs that gets into the system based on CAMS. So, of the INR 2 crore, you keep adding that organically, like -- but obviously, the PAN potency depends on how many times they get drawn against, the download revenue is dependent on that.

The thumb rule is that every PAN gets downloaded at least 3x in new accounts post the first upload that happens. So, it's obviously, this is an industry that's driven by the stock, right? So, we are progressing on growing that stock from organic and also from an acquisition of NSE perspective, which got around 12 lakh to 13 lakh PANs from them. So, this is going to be a driver of the business going forward, and we are actually inching up in terms of the number of PANs that we are adding.

And given that we have the -- some brokers also added as a part of our -- of the customer list, I think this is also going to add disproportionately a higher rate going forward. So that's kind of looking good from the overall PAN addition perspective.

[Sesha Ramcharan, executive]

I will only add dimension to this, Madhukar, if you -- I'm sure you have a way of looking at the KRA business, here's the way I look at it. That Part A of the mix is to continue getting these uploads, which runs on a base of about INR 2 crores, [ INR 2 crore, 20 lakhs ], it's about INR 40 lakhs a year. Currently, that's about 17%, 18%, close to 20% of the base.

The second is that existing PANs and new PANs should be consumed with speed, which means I can create inventory, but I may not sell. I have to continue selling them at least at the same rate as I was doing in the past for my revenue to kind of hold at the historical rates and for my revenue growth to match the PAN growth count.

And the third is pricing should remain stable. So those are 3 components. I think that's the way I look at the business. If there's any other question on this, happy to answer.

[Madhukar Ladha, analyst]

And just one question, I think got left out. Of the 38 -- most of them you're saying are fintech. Any -- I know that you've got 1 of the top 3 brokers. Any addition in the top 10 amongst the 38?

[Sesha Ramcharan, executive]

Yes, you can say one, where we have a contract, we're just trying to make sure that they migrate volumes to us that they start off with 10% to 15% upload and download contribution. So, yes, one of them, it has to kind of operationalize properly.

[Anuj Kumar, executive]

So that was Part 1 of your question. Part 2 of your question was on the consultation paper. Frankly, we had a Board meeting till about 9:30 in the night, and this has just come out. Our belief is that there was a longest TR discussion from, let's say, mid of '23 towards mid of '24. And then that TR discussion got deferred. It had various components. components of security trading tax, GST and brokerage paid on -- brokerage paid above cap on the sale and purchase of securities by mutual funds were 3 elements which were focused on at that time.

But then, that did not kind of progress to conclusion. I still have to look and understand what this one is about from a consultation paper perspective. Like we've always said in the past that -- I mean, Part A of the story is that we've made our entire delivery extremely efficient. You can see it from the pricing, either from a [ webs ] pricing or from a pricing per account portfolio perspective.

It's also a fact that we are a large participant in the overall ecosystem. We eat off the same plate. So, I think we have to establish whether this is materially impacting to the AMCs. If it is materially impacting to the AMCs, that is something that we have to estimate. Will they make requests to discuss rates, et cetera, I think is a subsequent step. I cannot guarantee that, that instance will be 0, but I think it's just too early to conjecture and come to a conclusion on that point.

[Operator]

The next question is from the line of Sucrit Patil from Eyesight Fintrade Private Limited.

[Unknown Analyst]

My question is, as India's financial infrastructure expands through new platforms and investor segments. How do you see CAMS evolving its role to stay central and differentiated in this ecosystem?

[Anuj Kumar, executive]

You only have to watch what we are doing. You only have to watch what we are doing, and you will see that we are very, very closely aligned. We are a commercial organization, but very closely aligned to the agenda. We are closely aligned to the agenda because the agenda, I mean, produces a lot of opportunity for us. We are a domestic-focused company. Our eyes are focused on just this one part.

We are creating infrastructure. So, think of it this way that we have the largest infrastructure in mutual funds for the last 20 years. That's a great vindication of our intent. We today have the second largest infrastructure in customer onboarding and verification, which is the KRA business. We have a large, I would say, financial services focused infrastructure as far as payments are concerned, all formats of payments for banking, non-banking, insurance, mutual funds, that's our business.

When you look at insurance, we are one of the centrals in demat of insurance. Demat hasn't really progressed as much as it could have. There is no utility in the country like Bima Central. We do not have a utility where you can go and monitor your portfolio of insurance. You can see today's maturity values or surrender values. There is no place where you can apply for a [indiscernible] and ask for a loan against securities or initiate a claim. There is no unified single place except for Bima Central.

Apart from all of this, we built utilities around account aggregator. You may have seen us announcing Consent Pro, which is ahead of the times in terms of the implementation of the DPDP Act. So, I tell you this is not because -- we are not doing this because we are looking for licensed businesses which give price protection. To be frank, a lot of these businesses may be licensed, but they give no price protection. Our account aggregator business today has -- the revenues are at 4% or 5% of where they were 4 years back when we started. But we believe it's an opportunity. We believe it's an expertise of the company rather than going everywhere, we just want to stay in this one place.

So, I hope that just the actions that we've taken in the last 5 years, the last many years are a good vindication of this. If there's anything else in your mind, happy to answer.

[Unknown Analyst]

My second question and final question is to Mr. Ram Charan sir. Looking ahead, what internal levers or cost planning do you see as most important for sustaining margins, especially as service mix and volumes evolve?

[Sesha Ramcharan, executive]

Okay. So, we have repeatedly said that there is -- this is a fixed cost kind of a business, but there are some levers available for us and big ones are there. The biggest thing is automation and automation from a process perspective, make the process more efficient on a daily basis and try and make it as automated as possible. And we have achieved a significant progress and success in most of the processes, right, from your posting to your reconciliation to transaction acceptance, et cetera.

A big initiative in that regard is the entire REAR project that we are doing, the re-architecture of the platform. The new platform is kind of slated to go live in phases starting from end of this financial year. I think once that goes live and we are working for it, this will have a disproportionately higher impact on the way that we approach things, and it will just make the process more efficient and more automated, AI enabled and various other things, which will kind of lessen our dependence on manual labor, right, going forward.

So, we do have many levers that we are working on, primarily being the automation of the process, the new REAR platform, making things more efficient than what it is. So, I think all those things will be very useful, and we are confident that our margin profile will be absolutely maintained even in the face of some cost pressures from an inflation perspective and from a yield pressure, we'll be able to hold margins. I think that much of an assurance that we can give.

[Anuj Kumar, executive]

I just want to add one thing on this theme, which we haven't spoken about too much. But I'm sure most of you would have noticed that back in the month of August, we unveiled the brand of CAMS AI. We haven't changed the company's name yet. We haven't done any hired [indiscernible] because that's not happen where we do a lot of things and not do much. we were preparing ourselves for the last 1.5 years, you can think of it as all of '24 and perhaps all of '25 to really have the spine, the capability, talent, the tooling, infrastructure to build AI-leverage solutions.

So, we took time to unveil the branding. So, you've seen the launch of CAMS AI. You will very shortly see 2 things. One is the composite, the very wholesome deployment of artificial intelligence inside our operation, which means the operations, obviously, it's a large platform, which has been built over 30 years. But you will see that deployment will obviously be conducive to managing productivity, which [Technical Difficulty] that's one.

The second thing you will see is deployment for some of these solutions outside our core business, which means inside the core business, obviously, we'll continue solving the problems that we solve to become more efficient, faster, because [Technical Difficulty] lower risk and more finance.

[Unknown Analyst]

I think that's good guidance from your part. [indiscernible] and I wish the entire team best of luck for Q3.

[Operator]

The next question is from the line Lalit Deo from Equirus Securities.

[Lalit Deo, analyst]

Sir, just 2 questions. Firstly, like in the insurance -- question on the non-MF business, could you give us like what would be the overall EBITDA margins in this particular quarter, as like [ last year ] you highlighted that this was around 12%. So just wanted to understand that? And how are we tracking in each of the business segments together?

[Sesha Ramcharan, executive]

If I may just ask you, was your question on the margins for the non-mutual fund business? You were not very -- there was some disturbance.

[Lalit Deo, analyst]

Yes, sir.

[Sesha Ramcharan, executive]

Okay. So, as we have said that inherently, all the non-mutual fund businesses are platform-based businesses, so which means the platforms have been built and the investment phase are largely over in terms of all the platforms, for example, a Bima Central or a pension fund or an account aggregator, et cetera. So as the revenue increases, the margin profile keeps increasing. We've said that the margins are currently at the early -- between 10% and 13% EBITDA is what we keeps hoping.

The current quarter margins are on the same lines, although payments margin has increased a little because of the higher volumes that we are seeing from a payments perspective. But overall, we are at the sub-15% EBITDA margin and our stated aim and expectation is that this will go to a 25% margin on steady state. Even with our incremental investments are going to be muted, but the revenue is going to flow directly to the bottom line. So, we are at a sub 15% EBITDA now, and we expect that we will reach 25% within the next couple of years.

[Anuj Kumar, executive]

Just look at it this way that the mature scaled non-MF businesses, which is KRA, where the margins will be in the 30s; payments, where the margins will be in the mid-20s and AIF, which will also be in the mid-to-late 20s, demonstrate that on our INR 40 crores, INR 50 crore portfolio, it is possible to make 25% to 30% EBITDA margins in KRA higher than that.

But there are investment businesses where we are putting money, which is account aggregator, which is MPS, which is insurance and a few smaller ones, including MF Central. Those are the ones which have to get to some scale. We have said in the past that our experience is that it takes about the initial INR 10 crores per annum of revenue for a business to breakeven.

Insurance, for example, would have a much later breakeven because the costs are larger. But somewhere between INR 10 crores to INR 15 crores of scale the business will breakeven; above that is the profitability line. And then as you scale up to INR 25 crores, INR 30 crores, INR 35 crores of revenue, they can become -- the profits can become very handsome, like you've seen in a INR 50 crores, INR 60 crores business, it's possible to cross 30% EBITDA. We don't expect non-MF to ever become or easily become a 45%, 50% EBITDA business, but it's our desire, like Ram said, for it to become 25% to 30%.

We are very confident that the current line from, let's say, 15% at portfolio level to 25% at portfolio level will happen in the next couple of years.

[Lalit Deo, analyst]

And sir, just lastly on this insurance segment. So, like within Bima Central, so just like we have added Tata AIA as well as -- as the fourth insurer over there. So, just wanted to understand like what would be the broader economics over there, unit economics over there and how do we make money in this segment?

[Sesha Ramcharan, executive]

Okay. So, see the revenue model for insurance depository is threefold. One is when you convert or take a new policy online, we get paid and every payment is done by the insurance company, none by the final policyholder, we get paid some money and then we get paid AMC from year 2 on all the policies that get converted and are a part of our platform. And thirdly, we get transaction revenue.

Now the way the things have panned out before this integration is that our revenue was entirely dependent on the initial conversion as well as the AMC revenue. But now that we have 4 insurance companies and more on the pipeline who get integrated, more and more transactions are flowing through the Bima Central platform. The transactions could be in terms of not only change of data, but also, for example, a premium payment. And once we go live with additional features like a lean marking, et cetera, the transaction count is going to increase disproportionately.

So, we have now touched a transaction volume of almost 1 lakh a month and sometimes more. What used to be a negligible number is now kind of ramping up rapidly because of these integrations. So, our monetization will involve around 3 things: 1 and 2 already in place; and third is an increasing share of the overall revenue. Given the number of insurers are getting integrated, number of policies are getting increased, the number of transactions also will increase, and it almost has a beneficial impact on the overall revenue. So that's the way that we monetize this platform.

[Operator]

The next question is from the line of Devesh Agarwal from IIFL Capital.

[Devesh Agarwal, analyst]

Sir, my first question is on the MF yields. What would be the number for this quarter?

[Sesha Ramcharan, executive]

Devesh, it's a very tough number to predict, right, in terms of this. But what I can tell you for sure is, we do not expect a depletion in the yields. Obviously, there could be some mix impact, which could be plus/minus. Or could be seeing new customers, meaning the customers who run smaller size growing more than larger ones, et cetera. So it's very difficult for me to predict. But I can tell you, we do not expect the yield depletion to be more than 0.02 bps, right? Given the current trends, expectation is that I don't think it will be more than 0.02 bps. We'll try to see how much within that range it is actually.

[Devesh Agarwal, analyst]

No, sir. I was actually asking for 2Q, the quarter gone by.

[Sesha Ramcharan, executive]

So, quarter gone by, we had a yield depletion of -- we say 0.03 to 0.04 will be the expectation. And I think we are at 0.04 depletion when compared to the last quarter, which is probably on expected lines. And we have taken the entire impact of the SBI price reduction on this. And hence, we do not see a further yield impact more than the telescopic pricing.

[Devesh Agarwal, analyst]

Understood. So it should be somewhere around 2.12 basis points, if I'm right?

[Sesha Ramcharan, executive]

Yes. This time, it is -- yes, it is between 2.0 and 2.10 yes.

[Devesh Agarwal, analyst]

Yes. And sir, now that 100% of the SBI repricing has been captured in this quarter, would you share what would be the pricing difference between the top 3 mutual funds in 2Q?

[Sesha Ramcharan, executive]

So, I think as we had indicated very clearly in the last few calls, the entire reset of pricing happened because the parity had to be reached. Now -- and if you see the published accounts and if you actually compare it yourselves, you will see that among the top 3, 2 do not have any difference, the third has been reset from April. So currently, based on the pricing that we have, we can confidently say that there is no big difference between the prices of the top 3, which will involve any renegotiation or any such activity.

We are almost on parity levels. Obviously, there will be some differences because of asset mix, et cetera, which is unavoidable. But broadly, I don't think there is any difference that kind of cause for a trigger of a repricing et cetera, among the top 3 customers.

[Devesh Agarwal, analyst]

Right, sir. And sir, in the next 2 years, how many contracts are up for renewal among your top 10 clients?

[Sesha Ramcharan, executive]

So, as I said last time, we are in for a period of sort of stability. We do not have any major customers up for renewal. We do have some midsized customers coming up for renewal in the next year -- next financial year. And the year after that, a few of the large ones will come.

So as I said last time, we will have at least 18 months of stable prices while there are no big renegotiations happening or repricing happening or even renewals happening. Every renewal period will not amount or will not result in a repricing. I think that's kind of an impression that I need to correct, which is that a lot of the contracts get rolled over also without any change in prices, including large ones. So -- but purely from a renewal perspective, we have nothing major coming up for the rest of the year.

Couple of mid-sized customers coming up for renewal in the next year and the year after that will be where a couple of the larger customers will come for renewal. What it actually amounts to in terms of repricing, I think we'll have to wait and see. But again, I would like to caution, that doesn't mean that it's going to be -- every time there is a renewal, there's going to be a big price give away. I don't think that's going to happen.

[Devesh Agarwal, analyst]

Right, sir. And sir, a more strategic question. Even if you see ex of these regulatory changes, AMCs may always ask for additional discounts. So, what can you do to put a flow to the pricing? Is there anything that we can do?

[Anuj Kumar, executive]

So, we have said this in the past, Devesh, that this is a market which doesn't have too much competition. There are 2 domestic providers. The thought of putting a floor on price or doing anything else that concentrated providers do hasn't happened in the market. I think all the time, we have tried to demonstrate value to our clients. And like Ram said, more than half the contracts, which could have been negotiated just get rolled over because clients see value.

I think essentially, the way I look at it is that our ability, and we have said this, that our ability to grow our business at current scale -- current scale, we are a INR 1,450 crores, INR 1,500 crore company. For us to grow revenue at the rate of INR 150 crores to INR 200 crores a year is perhaps the most asset test that I look for. I know that you're looking for pricing bps and stability of pricing bps.

I'm just taking you a little away from that and trying to kind of share my point of view on how I think about running this business that our attempt is to scale this business, let's say, by INR 200 crores. INR 50 crores of non-MF, INR 150 crores MF. INR 150 crores of MF is almost a given if we have asset growing by INR 8 lakh crores to INR 10 lakh crores a year. Our current base has crossed INR 50 crores. If I have assets growing at INR 8 lakh crores to INR 9 lakh crores a year for the next 3 years, we will get to INR 150 crores of MF increase.

Non-MF, you've seen we've crossed over INR 40 crores of revenue increase last year. We will cross over INR 40 crores of revenue increase this year. We believe that our cost increases will always be in the range of INR 60 crores, INR 70 crores and not more than that. Operating EBITDA, therefore, growing by INR 100 crores is really how it works. And in most of these platform businesses, when we are pouring revenue from the top, a lot of that goes to the bottom line. I need not illustrate it to you because you can see it happening out there.

Within this is the big question that you ask and you asked me very often in the past that can we fix the price, floor it down somewhere and say that we will not fall in bps anywhere below that? Possible. We haven't yet gone down that route. But yes, prices have become very fine. It's a viable thought. We haven't implemented anything like that yet.

[Devesh Agarwal, analyst]

Understood, sir. And sir, one last one. For the new AMCs, as I understand, the pricing is very competitive for some of the new AMCs. So, could you share, one, what is the additional cost that you have to incur whenever a new AMC starts in operation? And once we have these 8, 10 AMCs who start operation, what could be the drag on the margins or the profit for us? Like what you shared on the non-MF side that there is an initial INR 10 crores, INR 15 crore cost for the business. Any number for a new AMC that starts operation? Is there a cost for us?

[Anuj Kumar, executive]

So, Devesh, I just want to answer this question in 2 parts. First is that new AMCs are deeply discounted or any new wins are deeply discounted. Since you -- all of you and you yourself, I know track scheme accounts, please look at 2 AMCs that we won from competition, one is Navi and one is Torus. And you can take a look whenever the scheme accounts are available to you on whether we discounted those, we are actually charging more.

You can say it is a subset of our wins, but it's a relevant subset because somebody wanted to come to us, and we told them we will not sell at a lower price. This is clear evidence that will be indisputable. Kindly do take a look, for one, you'll have to wait till next July for the other, there is evidence available in front of you. All the others, we have won new ones in the past. I will not name individual contracts, but there was a contract we won, let's say, end of '22, went live in end of '23, you've seen scheme accounts.

That deep discounting does not exist. We may have a support period of 6 or 9 months, maybe a year. at which time the AMC is only INR 1,000 crores to INR 2,000 crores, but it is not that they are enjoying any freebees for 5 years.

Just to answer your question, a typical new account goes live with a team of about 12 to 13 people. We are liberal. We don't want our quality of service to deplete. So, it goes live with 12 to 13 people and will have its own database and its own app servers, et cetera, and BCP side, et cetera, all those things are there.

If you want me to estimate what is the cost of running the new AMC, it will probably be INR 2 crores to INR 3 crores. It won't be more than that, which means that if they get to INR 1,000 crore revenue and we get just basic yields, we will start offsetting that cost. That's really the cost. Six of these are, by the way, live. I just want to point out that 6 of them are in the base. Choice, you can ignore because it went live over the weekend. But the other 5 have been in my base most of them for 4Q of last year, some of them again in 1Q and then mostly everything was live in 2Q.

So, if you believe there is additional cost incurrence because of these, even if your argument is correct, which it is not, there is no fresh accretion of cost, 3 more have to go live. Most of the others, which are 6, are live in the base.

[Sesha Ramcharan, executive]

Just to just reiterate the last point, Devesh, you will see that the margins of mutual funds are very stable, right; are very stable over the last few quarters, barring if you take away the impact of the price, and it is getting back to what we think is a normal company margin of 45%-plus. So as Anuj said, if you have 6 AMCs who have gone live and supposedly deeply discounted pricing and a lot of costs getting incurred, I'm sure you would have seen the impact on the margins, which you are not seeing, right, which you're not seeing at all.

So, I think that's again one of the misconception that we will need to correct. So, what we have in the base is already there, what we're getting revenue is already there and still your mutual fund margins are stable. If you just equalize for a moment, the last few quarters of price discount that we gave. And they're also getting back to what is actually the margin historically also.

[Operator]

The next question is from the line of Dipanjan Ghosh from Citi.

[Dipanjan Ghosh, analyst]

So just a few questions from my side. First, if I look at the Alternates business, obviously, there has been a very, very strong pickup in momentum on a sequential basis. But if I look at last year also, between 1Q and 2Q, there was a decent improvement of almost 10% plus and then it kind of again fell off. So just want to get some sense on whether if there is any seasonality in this business or incrementally, we can think of more like INR 11 crores to be -- more than that to be like more of a steady-state run rate in that segment? That was the first question on the Alternates business.

Second, I just wanted to go back to one of the previous participants' question on the KRA business. The sequential offtake that you have seen, how much of that would be, let's say, because of new demat accounts getting opened? And incrementally, when you see the visibility for, let's say, October also, I mean, because we are towards the end of October, do you see this run rate sustaining?

And my last question is, again, going back to the mutual fund business. You mentioned that 2 years out, somewhere around FY '28, you would probably see multiple large asset managers coming up or some large asset managers coming up for renegotiations. Given that at that particular stage, the absolute quantum of money that some of these asset managers might be -- that will be paying to you depending on the AUM at that point of time would be a very, very significant number. Do you think that there can be a case that given that it would be almost 3 decades of your operation that some of them might want to move to more of a cost-plus sort of a model or some different sort of a revenue model compared to the AUM-linked model that we have today? Those were the 3 questions.

[Anuj Kumar, executive]

Okay. Dipanjan. I'll perhaps answer your questions in a different order, if you're okay. Starting with MF and then we can go to the rest, and I'll ask Ram to chip in if needed. See, as far as the MF business is concerned, you have to think of it and believe that it's an infrastructure business. It is not IT services, it's not BPO. It's not a per transaction business.

Today, for example, like we've said in the past, and I don't want to give a very long answer, if a regulatory change happens or if a new product comes to the market, our charging remains at asset level. For SIF, I may have built a lot of new things because the regulation says that the mutual funds cannot -- let it masquerade in the mutual fund product. The font size has to be different. The website should be different. Customers should know it's a different product.

Everything is designed and built by us. We don't build on instruction. We are not expected to seek somebody's help. So it's a very bespoke, our-designed product. The platform belongs to us, the entire intelligence, the infrastructure is ours and the operations, whatever labor we incur is part of that. It is not amenable to be run as an IT services or any services business, which is cost plus. When a change happens, the buyer asks for a price, we give a price. So the nomination methodology is going to change. And you will have to now give us a video starting 1st December, if you don't want to nominate someone.

The mutual funds don't have time and we don't have time for them to come to us with these changes and say what is the change going to cost? That's how services works. That's how a cost of model works. Despite this not being a cost-up model, I think today, you have to look at the pricing. And again, I'll repeat what I've said in the past that today, we have about INR 11 crore folios with balances, INR 1,200 crore plus of MF revenue.

We sell each folio at INR 110 or INR 120. You pay INR 300 for a demat account, the provider or the principal pays for ISIN, for downloading the BENPOS, for doing corporate action. There are 100 ways where you pay the money to the other equivalent cohort entities. You don't pay that here. So, the equivalent pricing is maybe 1/3 of what comparable domestic pricing is. And I think, therefore, while there are potential arguments saying, well, why don't we in-source? Can we build it ourselves, we are so big? Can this go to cost plus?

I'm not saying the instances of those questions are 0, but they are very few, but they are very few. I think the industry believes in outsourcing. The industry believes that they've been able to scale to this level and declutter their lives by letting the advisers do what they are doing, letting the sellers and banks do what they are doing and letting the RTAs do what they are doing and giving us enough independence to design the outcome and not just take instructions.

I think that's an abiding belief system in the industry. Unless that changes at a transactional level, I don't see either a cost-plus mentality coming in or an in-sourcing mentality coming in. That's one of your questions.

Do you want to take KRA?

[Sesha Ramcharan, executive]

Yes, yes. So Dipanjan, if your question was how much of your new KRAs are coming because of your share brokers, et cetera, as against the mutual fund, the estimate is between 25% and 30% is actually -- new PANs is coming from that. Of course, the exact numbers I would have and ask Anish to kind of get back to you on the number, but this is the estimate that we have.

You had a question on the AIF business, similar to what you had last time. And my reply remains the same, which is that we see that this business is strong enough to grow this 15% a year. On an average, yes, 1 quarter -- first quarter was a little disappointing in terms of this, even this quarter on a pure new logos addition and also from an ex-Fintuple number, that number is very healthy. And GIFT City is doing well in terms of the overall revenue. we've broken even in GIFT City also.

So, I think the prospects are bright for us to reach this target of a 15% growth year-on-year. We stick to that estimate. And I think there will be no seasonality on this on quarter-on-quarter basis. We expect that this will kind of hold true for the rest of the year.

[Dipanjan Ghosh, analyst]

Got it. Sir, just one small question, if I can chip in. Any inorganic plans in the horizon, I mean, barring the one that you have already ongoing?

[Anuj Kumar, executive]

I would say we continue to scan the market. We continue to scan the market. There are a lot of opportunities available in the payment space like you know. We haven't decided that that is the way we want to scale the company, because some of that is just pure technology sales that -- some of it is a per transaction payment company kind of architecture.

There are very small opportunities available. You can buy lumps of INR 20 crores, INR 30 crores, INR 40 crores of revenue, you will not easily buy INR 100 crores revenue. Payments, of course, you can buy multiples of INR 100 crores. So, we continue to look at the market. There is nothing immediate which can hit us in the next 2, 3 months. But yes, I must say that beyond the target of growing the company by INR 200 crores through existing business lines, we continue to look at the market carefully. We have the cash. We have the management bandwidth to do this, but you won't hear anything in the next couple of months.

[Operator]

The next question is from the line of Siddharth from [ Vite ].

[Unknown Analyst]

I just have -- I just want to get a quick idea as to -- lot of PMS' are rolling out with the AMCs at the moment. And you do have a good share in the upcoming AMCs, which are to be rolled out. Just want to understand what kind of revenue contribution to the top line can be possible from that? And how much on a relative scale that do you have the share of the upcoming AMCs? And also, would like to get an idea about the geographical presence that you are planning to have in the future [indiscernible] at the moment as it was highlighted on the previous con call.

[Sesha Ramcharan, executive]

Sorry, can you just come back to your third question? Your third question was on...

[Unknown Analyst]

It was regarding your geographical presence. I mean, I did -- correct me if I'm wrong, I was getting to an outlook of you are venturing or stepping into new markets to expand your global presence as well. So just wanted to check in on that part as well after mainly checking the new AMCs rolling out.

[Sesha Ramcharan, executive]

Got it. No, you're right. We do have a higher share of the new AMCs and a lot of them are PMS players. As you -- Anuj, would have mentioned in the first slide itself that we did get the biggest one and a few more are in the pipeline. So, from a revenue contribution perspective, the way the industry works, the industry size currently is upwards of INR 70 trillion, and our assets under management is almost like INR 55 trillion.

For a new AMC, it will be -- initial few years for everybody is a little kind of a tough year in terms of ramping up their AUM. So even at a very decent pricing or for them to even get to INR 10,000 crores in a couple of years or 3 years' time is a very big task in the market. And we have seen the new launches getting to that level in probably 3 to 4 years' time, if not more. So, the revenue contribution that comes from the new PMS who are coming to AMCs or the new AMCs for that matter is always going to be a little on the lower side, right?

The game is that once they reach a scale of, say more than INR 15,00 crores, INR 20,000 crores that's when they start contributing, not only do they start making money, also start contributing from a probability perspective to the service providers like RTAs. So, this is more future-proofing our market share, right? We are pretty sure that with all the wins that we've had in the foreseeable future and beyond our market share, we are going to be the market leaders in this place. And that's kind of the new logos ensure that more from a short-term revenue or a profitability perspective, while the contribution will be a little lesser given that it will take time for the AUM to ramp up.

On the question of geographical stuff, I think we have repeatedly said that we are focusing on the domestic market. We continue to believe in the potential of the domestic market. We continue to see a lot of upside and market share given the various metrics on penetration, launches et cetera. We feel there's a lot of room to grow, not only from a mutual fund perspective, but also the other businesses that we have forayed into from a non-mutual fund perspective.

So, the business that you saw from an international perspective was a more inbound that we got from Sri Lanka. And I'd just like to stress that the same platform with minimum customization has been used for that also, so which means that it was not as if we made a separate product offering and invested a lot for that particular sales or from a product process. So, we'll continue to kind of cater to such inbound. We even probably do a couple of things, which our existing customers take a foray into geographical -- other geographical ranges may go with them. But as a strategy, we continue to be fully domestic focused, not only from a mutual fund but from non-mutual fund perspective also.

[Operator]

The next question is from the line of Prayesh Jain from Motilal Oswal.

[Prayesh Jain, analyst]

Just on this question, somehow you answered, Anuj earlier, but just trying to get more insight into it. So, if, for example, AMC, which would have been giving you a certain fee at INR 1 lakh crore AUM today with -- let's assume that it's just an equity AUM. The new AMCs that you have enrolled, would they be -- in case they reach that INR 1 lakh crore equity AUM in the next couple of years, would you still earn the same amount of fee that you would be earning today on that INR 1 lakh crores AUM? So just trying to understand, is there a pricing gap between what you are earning today and what are you giving the pricing to the new AMCs?

[Anuj Kumar, executive]

Yes, absolutely. Absolutely. See, we have no reason to discount the base. You wouldn't do it if you were sitting in my place. You would not discount the base. The base is a loyal long-term franchise, which can see if I discount another base. It will be a bad strategy on our part. Like I've said, you can take a look at whatever clients we have acquired.

So, 3 large acquisitions, FT in '21, Navi '23, Torus in '25, some of them, the new logos have gone live. I know a lot of scheme accounts are not available, but the ones which went live in '23, at least 1 year scheme accounts are available. Take a look at all of them. We can do a call separately. We don't want to do that. To be honest, we are okay to let some of the new logos go because, just think about it, they might to INR 1000 crores, INR 2,000 crores, INR 3,000 crores, maybe INR 10,000 crores. On a busy day sometimes my AUM moves by INR 50,000 crores.

So, I must exercise judgment that in a haste to get new logos, we do not make mistakes and start discounting our base. That just does not make sense. Our base is the most precious part. Like I've said in the past that if you take all AMCs launched in the last 5 years, the revenue contribution to the RTA business for the marketplace is perhaps 1%. You take all the AMCs launched in the last 10 years, revenue contribution to the RTA business will not reach 5%, okay?

It takes time to kind of grow that. So therefore, for us, in a quest to get that 1% or 5% with us to deeply discount the base just doesn't make sense. There is enough evidence. If you find contrary evidence, we can have a conversation.

[Prayesh Jain, analyst]

Got that. Second is, from a profitability perspective, you all have mentioned that the non-MF business' profitability will improve to 30%, 35% in the next couple of years. Should that kind of lead to the overall company level EBITDA margins inching towards more like a 47%, 48% kind of margins? Or do you think that you will be able to maintain at 44%, 45%, given that there could be some compression in margins on the mutual fund business? So just trying to understand that.

[Anuj Kumar, executive]

See, historically, if you see over a 10-year period, we've implemented EBITDA margins by more than 1% a year. If I take out this one event of price equalization, that is how things happen. Non-MF wasn't a big part of that story because non-MF was -- I mean, we seriously started scaling non-MF, let's say, from FY '22 or 4 years back. And that's the time period for which we've got this 28% revenue compounding.

When you look at non-MF, first look at lump of 3, which means look at alternatives, KRA and payments. That's the scaled part. And like I said, that's producing between 20% to 35%, depending on business line already. Already at the current scale in those 3 businesses, we are perhaps very close to 30% of operating EBITDA. Where we are putting in money, I'm still investing in MF Central, investing in the NPS business, investing in account aggregator, probably investing some money in things like Fintuple and think, building out new products like [ Concentro ], et cetera. That's where we're investing money.

So, the fact that we can produce 30% in non-MF is demonstrated by the big 3. I've just got to take some of the others and insurance is somewhere there, somewhere in the middle. Building scale is not very easy. So, it's perhaps a business between INR 25 crores to INR 30 crores right now, but it has some component of labor. Otherwise, insurance would have been part of the mix.

So, a part of non-MF, a scaled part is already making 28% to 30%. Some businesses are making losses. For them to cross the, let's say, INR 14 crores, INR 15 crore revenue, that's like crossing the Rubicon. Once they cross that, you will see profits there. So therefore, on an average, for us to increment company level operating EBITDA by about 1% a year, I think, is a reasonable expectation that you should have and I have.

[Sesha Ramcharan, executive]

Just balances one thing, Prayesh, is that the share of non-mutual fund revenue as a proportion of total revenue is also something that we are planning to -- which we are hoping to increase and which are working to increase, right? So, which means that from a weighted perspective, if it becomes 20% with a 35% or even a 30% margin and the remaining things have whatever margin it is. So, it's not fully from that perspective, mathematically also, you'll have to see the weighted where the margins will not be 48%, 49%.

[Prayesh Jain, analyst]

Right, right. And the last question is on, again, the MS yields, right? I think, again, this has been discussed in the call earlier also. But given that it's just been a 2-player market, and I'm sure that it doesn't appear that any third player can make an entry here. What's the kind of restrictions that you have to kind of protect your yields from falling further? Because I think that's the concern which has always been there, whether we will again come to 3.5%, 4% yield decline on an annual basis or at any given point of time, again, there could be an episodic event where we will suddenly feel that the yields are falling by about 10% again, right? So that's the biggest fear that we have with respect to yields that whether this yield fall off 3.5%, 4% is a number that we should work with or there could be risks to that?

[Anuj Kumar, executive]

No, we have always guided that that is the telescopic part of our contract that is the part of price depletion that our clients take in their core business. So, philosophically, that principle still applies and should continue applying that there will be some basic yield depletion because of telescopic rates.

The one incident, while it's happened, I think you should also appreciate that within 2 quarters of having implemented that, we are back to the highest ever enterprise revenue. And my hope is, 1 month has gone of this quarter that we will be at the highest ever MF revenue by the end of this quarter, too. So, we've recovered very quickly. I understand that, that recovery is because of circumstances and some efficiency that we have.

Will it happen again? It's happened once in 30 years. Will it happen again? I don't know. I would say that it's a rare set of circumstances will lead to an event like that. I would again say that if you focus on our ability to continue keeping this character -- the character of this enterprise at platform revenue, running it at small increments in operating cost and very small increment in cost of sales. Our ability to drive revenue up absolute rupee -- look at the next 3, 4 years. I mean, after that, we'll have this discussion every quarter.

But when I think of the next 3, 4 years, I want to grow this company by at least INR 500 crores in the next 3 years. We believe that we have a very solid paper solution to that. We know that not even half of that will be consumed in cost. So, margins will improve. That's the broad way we look at it. And I think any large price correction of the kind that you've seen one in maybe 3 decades is not a very likely event.

[Sesha Ramcharan, executive]

I'd just like to add one thing to that is what triggered this, as you know, is similarly sized customers and parity of price, right, which is broadly in the same range. I think we are at a stage, and you will see next year when the scheme accounts are published that we're at a stage where similarly sized customers do not have a big variance in price. I think the root cause have been addressed from this particular exceptional event that happened. So that's where we stand as a company.

[Operator]

This was the last question for today's conference. I now hand the conference to the management for closing comments. Thank you, and over to you.

[Anuj Kumar, executive]

Thank you. Thank you to all the participants for spending time with us on this earnings call and your continued interest in CAMS. If you have any queries, as usual, please feel free to reach out to MUFG or to Anish Sawlani, and we'll be happy to address the questions or take your calls. Thank you once again.

[Sesha Ramcharan, executive]

Thanks, everyone.

[Operator]

On behalf of Computer Age Management Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.