Computer Age Management Services Ltd

NSE:CAMS

Earnings Call Transcript

[Operator]

Ladies and gentlemen, good day, and welcome to the Q3 and 9M FY '25 Earnings Conference Call of Computer Age Management Services Limited hosted by Orient Capital. We have with us today Mr. Anuj Kumar, Managing Director of CAMs; Mr. Ram Charan, SR, CFO; and Mr. Anish Sawlani, Head, Investor Relations. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Shivani Karwat from Orient Capital. Thank you, and over to you, Mr. Karwat.

[Shivani Karwat]

Good morning, everyone. Welcome to the Q3 and 9M FY '25 Earnings Conference Call for Computer Age Management Services Limited. 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 has been 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 also been published in the investor presentation, which was released to the stock exchange. I hope everybody had a chance to go through the presentation.

I will hand over the call to Mr. Anuj Kumar, Managing Director. Thanks, everyone, and over to you, sir.

[Anuj Kumar, executive]

Thanks, Shivani, and good morning, everyone. I appreciate all of you taking time out to join the third quarter earnings call for FY '25. I have Ram Sesharaman and Anish in the room with me today. We will commence the presentation, spend about 20, 25 minutes on the content, which I'm sure you've gone through, and then have enough time left in our hands for questions and answers.

I will commence. Overall, I would clarify this as a strong quarter despite the fact that, especially in the capital markets, not just in the mutual fund space, but across broking and other related businesses. There was some element of slowdown and some element of the past trend will not sustain the same momentum despite that, I think the team has done a stellar job in reporting revenues, profits, wins, product launches, market share gains at a level which frankly has been unprecedented. I will just take you through individual products and businesses so that you begin to appreciate how this looks like.

But as a brief summary, revenue grew -- overall cap revenue grew just short of 28%. This number was about 32% in the last quarter. At 28%, it remains 1 of our best quarters so far, but of course, lower than the last quarter.

MS revenues on the back of about 38%, 39% growth in assets, were in excess of 28% growth. So that translates to the standard yield to asset expansion ratio, 38.5% revenue expansion or about 38% AUM expansion.

Non-MF revenue, which was upwards of 30%, was 32% last quarter, is at about 22%. It's not as good as it was in the last quarter. If we have the momentum in some of the markets, this number would have been closer to 28% or in excess of 20%. We believe that we have all the interest foundational components of product, sales, delivery technology, all of that in place to get back to that number [indiscernible]. So I would ask you saw this compression over the last quarter to what happens in the market.

Share of non-MF revenue, therefore, because of that expanded faster, is at about 12.5%. In the face of all of this, given the fact that we had almost 7 straight quarters of significant revenue expansion, I think the overall book was managed very well. EBITDA grew by 34%. So in excess -- significantly in excess of revenue growth.

Despite these cuts, we had EBITDA percentage at 47%, almost 230 basis points up year-on-year, which I think some execution discipline, cost management perspective is very sound. PAT grew over 40%. And the PAT percentage is at 32.6%, and this is almost 300 basis points up year-on-year. So I think overall, from a cost efficiency delivery perspective, despite the large investments we are making across product lines in technology in data centers in security and in talent especially, including some of the money, which we continue to spend on the rearchitecture of the core platform program.

If I put all of that together, I think the opening numbers at this level is just a very strong outcome of how we run play. Over the next.

I will take you most of the operational highlights. I'm very, very pleased to share with you in the large revenue base of mutual funds. I think the way things are panning out, and this is not just about quarterly performance, all of this was foundational, the way the market perceives our performance, our superiority capability to deliver the very stringent outcomes that the industry now need. I think there's everything pointing in that direction, and we not give more than I have in the chart.

We won all 3 MFRTA mandates on offer. Geo black crop, which was kind of agreed some time back. We were waiting for the execution, so we're formally announcing now. [indiscernible], which is an emerging but large PIF player in the country. Choice, which is a listed holdco, which has a large broking operation, but also a lot of stuff in distribution and other live capital markets activities.

So with these 3, while we have claimed the superiority was significant, I would say undeniable to be out over the last 3 years. I think winning 6 out of the 7, including the very prestigious deal to win, which was BlackRock, is very, very pleasing.

We also want -- and this was an inbound. I think we've shared with you in the past that right now, we are not doing any formal bid process for overseas contracts. But this is inbound, the CEO role to be a lender. And there was competition, obviously, but they were kind of predisposed. And I think that's the other thing which pleases me immensely, that a lot of the buyers are predisposed towards us, meaning that they have a strong will to buy from us. Of course, you have to win every contact. You have to fight for it. It is not that it gets thrown in our laps.

But getting an inbound like [indiscernible] was extremely pleasant. So we close this. We're going live in some time in the next few months. Overall, AUM grew about 38%, [indiscernible] assets, which have hired a Green Stelara, grew 51%, but at 48% strong growth, although slower than some past quarter, but still very commendable.

We also won the second MF party migration mandate from competition. I think a lot of you are doing the name, tenor and some of the salient details about this. So while we have a signed contract, I think we're still needing a meeting of formation from the client to disclose their names. It's a smaller AMC, again an inbound. You know that as business strategy, we are busy expanding in new clients and new areas, which will be defined.

So generally, the base has not been a core strategy for us. Whenever somebody comes with an inbound and it looks at [indiscernible], determined to migrate because migration of MFRTA operation is not simple. We do move it. So this is a name that we will announce in a bit. But it also kind of does 1 more thing that for a long time is going to sell in the market that cancels perhaps more position for very large AMC, and that's a franchise. And that's also kind of a headline, which got created for some time.

In the last 3 years, we've been conscious that you give the impression that we are good for emerging people, and we will pay them the attention and the focus that they need to be successful in there. Actually, an RP is not just a supplier or a, I would say, a partner. It's also an enabler in their success.

Very happy to state that all of these are not licensed mutual funds or got in principle. Most are in operations. Some of them primary licenses and about to launch in the next 2, 3 months, at least 3 of those. And there are 2, 3, which have got a visible approval, whose names we already told you. So that takes us to 26 out of 50.

It's again, you've known that we are not in a habit chase for any number. We are not doing that. We want to build our portfolio and continue sustaining it so that it is right design for the future. There are deals we want to win. And some of this is just good enunciation of our strategy in terms of how things went. So 6 out of the 7 new ACs in recent times, all the 3 MFRmatics in the last quarter, including the very prestigious name of BlackRock, Spebackbound the first official international contract, migration from the competition.

I think this just gives you a flavor of how things stand in the core. And when I go outside the core and tell you what the other businesses, I think your excitement will be as sustained. But this is just great building the franchise and building insurance for the future. Overall again, equity assets crossed the INR 25 lakh crore mark. I know that till about the month of September, but even till December, you know that net sales and collections in the number in the markets have been pretty good.

So our equity assets crossed INR 25 lakh crores. This number used to be about INR 12 lakh crores in March, April of '23. It's taken 18 months for this entire number to double. Equity net inflows were at about INR 97,000 crores. So close to a INR 1 lakh crore number of equity net inflows is a staggering remarkable number.

Remember that this number has typically been halved in a year, 1.5 years back time frame. So it's grown from the late 40s to about mid- to high 90s sales, which you know, I mean, new AMCs have to do that, but some of the established AMCs do that just to broaden the product portfolio and rightsize the offerings, 35 new schemes. So almost the scheme every third day. It just creates significant operational demands in the team, but we've come out very well. 70% share of NFO collections.

You know that NFO collections, this metric has largely been favoring class service funds. So that 70% has been a great number. SIPs, new registrations, while they lied almost 3% year-on-year, we're not as strong as the second quarter. And again, you know that some of the sentiment of the market started connecting [indiscernible]. So we had a full quarter of what I would say is correcting settlement. But within that growing 50% year-on-year was a great number.

Again, for the quarter, very great share gain. Net ligation share raised to 64% from 60%. And similarly, a very similar trend on unique investor base, which are INR 3.9 crores, just short of INR 4 crores. Our share grew 31%, last year is 25%. So again, significantly ahead of industry competition.

On the non-mutual fund side, again, I would say, a very sustained story. And you know that we have often described this business as ever [indiscernible]. And I think quarter after quarter after quarter, in your eyes to the credibility of how the individual businesses are performing would have gone up. This is not just some area of what I would say marginal work. Becoming core work allows these businesses are growing ahead of the market. We are taking share from a logo well perspective and inside the base, they're taking share in terms of transaction and revenue. And there's never a better description of success than that because we have to be, unlike some people who just are on price for some time just to show some numbers, I think this is sustained now almost a 2-year history, 8 to 10 quarters. And I can assure you that you will see this in the coming years and quarters.

CAMS pay, you know we reported a 26% revenue growth last year, and FY '25 has been touching 50% plus. So stellar the growth of 53%, despite the fact that any slowdown in consumer investments that kind of things [indiscernible]. But the business grew 53%. Digital payments as opposed to the physical lines, et cetera, have been driving this.

CAMS KRA, which grew almost high 90s last year, had been growing 50% plus in the last quarter, grew 27%. And I would say they grew -- we grew 27% despite a slowdown in new account opening, where the slowdown happened, the slowdown happened, obviously, in MS being bought and new follow creation. And PMA accounts reopened, which is a goof the service and overall opened by consumers to trade the stock markets, all of those things slowed down. You track the sectors, so you know the numbers.

And despite that, I think the 27% year-on-year growth has been a fantastic achievement. We continue to take share in this market like you know, and we continue to grow as new head of market.

A new client acquisition from the non-MF segment has scaled. We have some of the smaller brokerages. I think you guys have often asked the question, do we have 1 of the top 5 brokerages. One of the top 5 was signed during the quarter, at least 1 more should follow in the next 3 to 4 months. So I think this is a good starting, a very strong investment and scale up on the non-MF side, which is a segment we started focusing the last 2 years.

But the product is being bought, which means we reduce that the [indiscernible] look like this, and that's very strong. On automotive, you continue to scale. We've added 21 new plants, 31 new clients during the quarter. It has been a great story. We now have 25 managing over $1 billion of AUM. We continue, although not naming specific contracts, I know it's possible to name them, but we're not naming specific contracts.

We've got the churn mandate from the competition, which we then [indiscernible] 1.5, 2 years back, the clients are turning to us. And again, base churn is not a core strategy. so [indiscernible] the provider to come to us and we will take them. But this will give simply decidedly underscoring our leadership, having several new offers back in October with equivalent [indiscernible]. In AI filing 21 clients during the quarter. In digital, on0boarding, and I'll show you 1 of [indiscernible] next. We are at least 4 to 5x tier than any competitor. I think all of that is very, very gratifying in terms of how the business is scaling.

On repository, on insurance, you've seen the INR 1 crore number that we declared some time back. So you know that our organic pace of building policies under management used to be about INR 0.5 billion or INR 5 lakh a quarter. We've now scaled it to tell last quarter, and I'm sure this number can scale further. Our aim is to bring it in line towards 15 lakhs. But the thing I also wanted to mention is that we now have a second life insurer.

Now you can ask me why it's not 1 of the top 10, but this is the second life insurer in our history who's opted to give 100% of their policy base. So you can argue that there is conviction, not just in our mind or in some end consumers' mind, but insurance companies and life insurance companies who are complete believer are bringing 100% of their policy based [indiscernible] the second one. There is a life insurer there already.

And we expect this is part of a trend. It's not a flash in the pan. It's not a one-off demand. So in the year, we expect 1 or 2 more deals of this kind of come. And to me, it's very heartening because it's the shape of things to come as more and more insurers continue to believe in insurance suppository and choose to take the fall of running over 100% of the coverage policy to that [indiscernible] that's a great question to central unique place across 4 lakh consumers, volumes grow 40% across the base is very small.

So percentage growth is in the right metric. But I'll show you a [indiscernible]. And then CAMS filer has just won a mandate recently, both the count aggregate DSP and coming from 1 of the largest banks in the country. And Think360, where the account aggregator analytics and business [indiscernible] the experts and they have capability. We won a PSP plus now, basically an expanded from 1 of the largest banks in the country. It's a long-term clear contract with fixable income. So again, very heartening to see not just a map, I think I totally the entire story of how the things happen.

But in payments, in RA, in alternatives, those 3 significantly because that upgrade has been there for the couple of years. But in depository, continuing to see investor and insurer interest and scaling, and then a sense of some very, very high quality deals. So that's on the common performance.

I know you see these numbers. I don't want to inordinately spend time on taking you through these in terms of numbers, but suffice to say that a big metric of scale is how many transactions we process a year back, INR 15 crores. This year same quarter INR 24 crores. So it's grown 40%. You haven't seen anything coming off. You haven't seen mispayments deal, service, any negative. I think I'll just commendable job done by the entire team. So between technology process, compliance operations, all of them. Overall unique invested growth has spoke about 31% against, so ahead of [indiscernible] growth, 51%, net sales almost doubling in a year. And [indiscernible] registration is also [indiscernible]. I think that this is a good annunciation of. what a great product can look like.

Now obviously, the markets will have great times and not great times. And I think we have to look through them and this quarter, [indiscernible] sort of the day. And I think there's a third quarter, despite the slowdown, I think on individual factories, very, very hard in foreseeable go to the next.

Again, you've seen these numbers. I don't want to center any 1 of them. If there are any questions, we're happy to take questions during the Q&A session.

I've spoken about all of this, the cost of not being repetitive. We are just driving in a little more detail some of the individual businesses. I spoke about [indiscernible] the percentage revenue growth. I think from a logo addition perspective, I did speak about that, almost 24 new locals added in Q3. And some of those will be for 21 in AI, 24 in payments. It was undecided because we are a real scale clients.

Also happy to share with you about the quarter back we said we've been abandoned by LIC for an offset, it's an authentication services. These have gone live. We've also got a panel for payment services. These are extremely high quality, high tenor clients that we certainly want to acquire. Some could be users that then to use us and scale up as per process we take some time to go live. But that's a good time.

On the care side, I spoke about the revenue growth, added almost 20-plus different financial entities in tax, MF as we continue to scale up and not on and 1 of the top 5 brokerages. And 1 of the emerging brokerages [indiscernible] we will disclose at from a through the tax payer as a partner.

So good set of [indiscernible]. You saw comment on the next tartine last presentation in last quarter, I see all future relies fix that will help us scale business and we service and especially gain share at [indiscernible]. I suppose our testers, we spoke about 22 -- 21 million well. But including CAMS, which is on-boarding platform, almost 53 new markets. But almost [indiscernible], 5-plus. So if you think of that industry, domestic PMS at about 1,200, serious operating at least almost 1/5 of the market buys from us. The competition probably have any competition, not 1 main competition has maybe 1 for that number.

Yes, we said we are putting our money where our mouths are. These are new offers. We've crossed the pipeline, planning to add another 2 or 3 in a month's time and then enough in addition to everything else that the [indiscernible]. I was focusing on NPS as a segment, where to be able to build a [indiscernible].

With that, I think I've spoken about most of the things. 1 of the fallouts of having INR 1 crore policies that we also have 80 lakhs ERAs or reinsurance accounts. You understand that every investors of [indiscernible]. So some of the out of this is of those 80 lakhs investors now come and add a second and the third 1, which means we have to do a small campaign from the policy growth is not just ourselves or [indiscernible]. It's all organic growth because the investor we insure now has [indiscernible] with us. He has 1 less license as part of the 2 other parts. It was just in the [indiscernible]. Some is also the growth.

Bima Central, we're beginning 3 integrations, sports and progress. Of course, we would have liked the speed to be higher than this, but it takes some time to just get the physical integration of. So that did 4 lakh base on actual volume grew about 40%. [indiscernible], including that we have just [indiscernible]. Times had a strong point in had a strong quarter. The CSPs plus mandate is from, I can say, the top -- 1 of the top banks in the country. Very competitive, 1 against competition. So that was great.

Box Financial Services, which is a subsidiary of Banco BarataPahom, [indiscernible] came with the expansion in above cards. Algo360 won a contract for Unity Small Finance Bank. We have smart, [indiscernible] Gen AI net add solutions for regulators, depending upon their willingness to spot early whether there any influencers who are making plan. So you were even financial resource, also a product we take Products that aren't [indiscernible]. The amazed.

We by solutoins account aggregator type of business inside 360. [indiscernible] multiple profiles at NBFC that is largely used for the personal finance management, portfolio management this year. And then some recognition for 360 over a challenge by the [indiscernible] finance team. Since we spoke about the lens and the overall year-on-year revenue growth, caps and PS grew 100% on [indiscernible]. Over to next.

So that's what I had and have to take questions. Handing over now to Ram so now that he can take you through [indiscernible].

[Sesha Ramcharan, executive]

Thank you, Anuj. So I'll just spend a few minutes on elaborating our financial numbers. So we did post a very strong numbers this quarter with the growth in MF revenue largely in line with the AUM growth with stable yields, and the non-MF also growing on a year-on-year basis closer to a lot of expectations of growth.

We also posted strong profitability. In fact, our PAT increased by 280 bps quarter-on-quarter. The EBITDA increased by -- on a year-on-year basis, the EBITDA increased by 230. And there's A small creep up in the quarter-on-quarter margins also in spite of it being a quarter where assets did not grow as much as it did in the earlier quarters.

So we ended the year with a revenue of around INR 370 crores, which is a 27% growth year-on-year and a 1.3% good quarter, largely driven by the AUM growth. It was INR 46.77 trillion average AUM versus 33.9% in the last quarter. So that's a significant growth in AUM, which has contributed to the increase in mutual fund revenue.

The asset base and the non-asset-based revenue largely grew on similar margins, similar percentages with the transaction revenue on a year-on-year basis, growing significantly. Also on quarter-on-quarter, as you would have said the transactions did not grow a lot.

From a non-MF revenue, I think the details were given to Amgen earlier discussion. So we did grow 22% on a quarter-on-quarter basis with almost all the verticals posting growth on a year-on-year basis. while there was some slowdown in the quarter-on-quarter because of the underlying market conditions for KRA and payments. But overall, year-on-year, 22% growth, largely in line with what we actually expect so that to make our non-MF revenue 20% of overall revenue within the period of 5 years, which is probably another 2 to 3 years from now.

Asset mix was again favorable. Equity did have a mix of 54.6 percentage, which was again favorable from a yield perspective for us. From a profitability, as I mentioned, we actually posted very strong numbers on margins aided by our cost control as well as the operating leverage that we have. So on operating EBITDA, we actually grow the quarter with a 47% operating EBITDA, which was, in fact, slightly higher than the earlier quarter in spite of the challenges we had on the AUM growth in this current quarter.

On a year-on-year, there's significant growth from 44.8% to 47 percentage in terms of the overall margin. So there has been a slight creep up in margins even on a quarter-on-quarter basis with the operating EBITDA growing around 34% year-on-year and 1.5% quarter-on-quarter, and doing a similar trend of more than 40% growth year-on-year and at 32.6 percentage, we are close to the historic high that CAMS has achieved in terms of bottom line.

Our return on network continues to be extremely impressive with 40%, and we entered the quarter with a very comfortable cash and cash equivalent of INR 770 crores. The Board was pleased to decline an interim dividend of INR 17.5 per share. With this, the total dividend payout only for the current year, which is the first quarter dividend, the special dividend that we declared in the second quarter, and this particular is INR 260 crores of payout of dividend is what we are doing only for the current year, keeping in line with our dividend policy.

So overall, it has been a very, very strong quarter. I just wanted to end this with a small commentary on the yield. So yields have been largely stable for the last few quarters, right? And in fact, some surprised on the positive side also.

We have, over the last year, renewed a lot of the major contracts and the customer contracts with a limited impact on the is. And we do expect, however, the future, there could be some stream more than usual reduction in the yields over the coming year due to some price changes. While we are in discussions, and we will know the exact impact once the discussions conclude. But we think it is prudent to kind of alert this point that would be a more than usual reduction in yields over the next few quarters. Of course, we will ensure that the impact on margin is not material. Obviously, we have a lot of tools at a disposal including automation and the process improvements and the operating leverage that exists in the business to ensure that the impact on margins is muted. But I think it's just prudent to tell you that, that could be a reduction in yields more than usual over the next few quarters.

We will get back to you with details in the next quarter when there's more clarity on this particular point. But for this, this has been a very, very strong quarter, as Anuj said, a lot of foundational things are happening, which is -- which ensures that the long term -- the financial FX of the company will continue to be impressive, whether it's in terms of wins in the new MF logos in share in the equity flows or new logos that we are winning in the non-MS and MF business.

All these things point to a very positive future in terms of financial metrics also. With this, I will just pause and hand it over back to the moderator for any questions that you may have.

[Operator]

[Operator Instructions] The first question is from the line of Prayesh Jain from Motilal Oswal.

[Prayesh Jain, analyst]

Congrats on a great set of numbers. Just a few questions from my side. First 1 on this international mandate possible, what is the size and what are the realizations and what can be the time frame that we will look at and whether it is the entire asset base or 1 particular geography that you have won the mandate would be helpful. That would be my first question.

Second, you mentioned on the shift of AMC, right? So does this kind of open the can and increase the competition or allow third player to start entering this space does the competitive landscape change because like we've been -- that has been 1 of the key strengths that the shift of AMCs in RTA business is a difficult one and it does not happen. But does this mean that if it is a meaningful one, then there would be further more transitions?

Third 1 was on brokerage. You said that you -- on KYC, you added 1 of the top 5 players. Would this -- is it more clarificatory whether this would be replacing an existing one? Or you're getting the -- you would start getting share of incremental business, or it's an exclusive deal that you would get only you would be the only one. And last question is just on this yield pressure that you mentioned.

Ram, what has changed in the recent past that is causing this change? Because on the other hand, if you look at this quarter, the AMCs have reported flattish to marginal improvement in yields. And we are talking about and the corrective actions that they have taken, some of the AMCs which have taken for the commission structures that is benefiting the yield.

So why in this kind of an environment, we are taking the pain and we are taking the pressure of reduction in yields? Yes, those would be my questions.

[Anuj Kumar, executive]

Sure. So on Seabank, it's, I think, an operation which will think of it like as a INR 1,000 crore AUM and in client. So approximately that size as a little [indiscernible].

This is not a sign. We are not announcing some big band global entries. So like I said, an inbound inquiry. We've just right size of software because you need some of the regulatory setup to get into this currency, those kind of things and the processes that they follow. We should be live by April. I think right now, you have to think of it as a contract which will build a few preps a year. It's not a very large part. There will be a few fees a year.

So the only reason we're stating it here is that it's a nice inbound for us to get because there was inquiry. And then it came in, we don't have yet a dedicated sales force to go after these things. So that's my #1.

Well, number two, you asked whether clients will begin to churn. If you want my honest answer, the churn in MF -- the movement between 2 tiers continues to be as tough as it used to be, perhaps tougher. It is despite the digital era. Actually, the digital impose a lot more constraints on the physical world. So it's not that there's anything easy in terms of shift.

I think these cases, you saw 1 case about 2, 2.5 years back, we're seeing the second case now where people -- and a lot of this is for commercial dentition. Now of course, you know that those came [indiscernible] public, you can also see what we close is just that people want to work with us. I mean, I think because the evidence that people who want to work with us speak about. That's how this is happening.

Can a third player coming? A third player cannot just come in because it's either easy or tough to churn. They need to have the product and the entire suite, which is told in the past. It's so comprehensive, but it's very tough to tell. It's maybe a 5, 6, 7 duration process, maybe longer than that. And you see some examples of competitive entities, which came up that would not sell.

So this does not make churning any easier, it does not create any room for a third player. I would still say think of it is a very uncommon event, someone with great determination and grit would like to cross over. So those were your first 2.

[Prayesh Jain, analyst]

Yes. The third 1 was on brokerage.

[Anuj Kumar, executive]

On the brokerage part, so this question has been asked of us often for obvious reasons because some of the large brokerages [indiscernible] happen to be MFRTA clients. So we are often asked this question are they coming in.

Right now, this is unannounced. They will come on at some time. It is unannounced, 1 of the top 5. Typically, how a KRA or a payment operation in that's the second partner. Broadly, think of it as about 20% to 25% share, which means they will still keep the first guy. They will keep the first guy. They will not tank at and rip them out. So it doesn't work like every part does, you have a single partner. You can easily have a partner solution.

They start giving away does this to just add 5% or 10% volume. So the expectation should be that about 20% to 25% of the payload will start coming to us. That's Item #3.

Well, Item #4, I think what Ram said, I'll just divide the argument into 2 parts. One part is that it's almost the entire renewal cycle of large, medium and small contracts done. We also -- yes, you know that last year was sort of the asset test here, we had a lot of these products come up, and we have successfully renewed all of them or almost all of them. So there are 1 or 2 where there may have been a historical backdrop of uneven prices. And given the fact that in the last 6 quarters, after March of '23, so starting April of '23 'til December of '24, we have a 6, 7 quarters of extremely strong growth.

We may be doing something for 1 or 2 clients. I think that's the mention. For most of the days, the renewals are all done. They're typically 3-year renewals. So that large task, which belong to 2024 and early '25 has been accomplished.

[Prayesh Jain, analyst]

So this is like a one-off fit that will come to your book for a very long period basis? Is this kind of resetting of the base also of the back? So this is all coming probably 1 quarter or something, they will impact?

[Anuj Kumar, executive]

No, no. It won't be like that, whatever adjustment we do. So I think the bottom of the slide is like this. We have assessed, obviously, the task at hand. I think the broader statement mark is that we are confident that we will hold margins and everything else that we've done we had to do these things in once or twice in the last 6, 7 years from time to time as the market expands.

And if there are any, I would say, price unevenness, it plays out. So it will play out in our case also. Don't read it bigger than what it is. But yes, it will happen over financial year '26, FY '26.

[Operator]

Next question is from the line of Abhijeet Sakhare from Kotak Securities.

[Abhijeet Sakhare, analyst]

See, first question is coming back to the yield part. So it's possible to quantify your comment around higher than usual compression. And putting that in context, I think this 9 months so far, we have seen on a calculated basis, almost like a 5% to 6% compression. So does that mean it's higher than this number is how we should look at next 12 months?

[Sesha Ramcharan, executive]

So just the way we look at it, the long-term compression of yields, if you see over a longer -- I don't think 1 or 2 quarters would do justice to it, is to actually look at it at a number closer to 3 to 3.5 percentage, right? So that's been the long-term range in terms of the yield compression. What we feel is that the 3.5 might not hold good going forward, at least for the next year.

And so for the reason some mentioned, that there could be some pressure on it subsequently, whether it will be double of this, unlikely. But that could be something that [indiscernible]. As I said, the impact we have to be assessed after we do it. So we don't want to give a better or worse picture than what it is going to be finally.

But as Anuj said, should not read more than what it is intended to be, which is our guidance to you. saying that if you're building your models using the usual yield depletion, please add something to it so that it becomes more accurate.

So it will not be double of what it is now, it's not going to be a depletion like that, but it's definitely going to be higher than the 3.5% that we are seeing. It's starting to be the year in depletion.

[Abhijeet Sakhare, analyst]

Got it. Moving on to the PRA question. So here, just wanted to understand what would be the mix between mutual fund-related revenues as against broking? Because we've seen, let's say, similar growth in terms of mutual fund accounts in 3Q. But obviously, I think the broking side has seen like a 20%, 25% dip, which is similar to the decline you've also seen on that revenue line. So mix there would be helpful.

[Anuj Kumar, executive]

Sure. So largely look at it this way that non-MF is about 18% to 20% of revenue contribution. It's a much larger market, so we want to scale it. But right now it's about 18% to 20% of the KRA business in terms of revenue.

[Abhijeet Sakhare, analyst]

Got it. And last 1 is how should we look at the expense growth for the next few quarters or next 12 months or so?

[Anuj Kumar, executive]

So I'll let Ram answer this. I think from a broad perspective, we have been in an investment mode on products and technology for over the last 2 years. We spent and you've seen some of this that we spent for workforce modernization, we brought in been a substantial number of IoT kind of hires in the last year.

We continue to work on the platform re-architecture program, which continues to advance. And although a lot of the possible get capitalized, there will be some offsetting in the P&L. Our CapEx this year has been larger than usual, also the IT OpEx. But I'll let Ram Charan kind of give you a little more detail in terms of exact numbers.

[Sesha Ramcharan, executive]

Sure. So Abhijeet, you would have seen that during the current quarter on quarter-on-quarter basis, the expense growth was a little muted, right, especially on the salary cost. This is after considering the talent infusion that's happened in terms of the IT, IMs and other senior hires that we've done. So what we expect overall is -- there are 3 things I'll cite, the employee costs, the operating expenses and the fixed cost -- from an employee perspective, we've seen it to be stable around 32% to 33% of revenue. So in quarter in the April, May, June, there could be some increase because of the annual appraisal impact. It has traditionally been around 1% or 2% of revenue.

Apart from that, we don't see that to be very different. I think we have a fully staffed organization, Whatever we do in terms of talent decision will continue to happen. But I don't think it's going to be significantly increasing the cost by 4%, 5% at most, it would be a couple of percentage increase there. But I think you'll see remarkably stable operating expenses. It has traditionally been if you take away the OP, it's traditionally be around 8% to 8.5% at early revenue, be it the sponsored charges for payments or the data entry charges for cans or for software-related direct expenses that we're incurring.

So we don't see any change in that ratio, too. And fixed expenses, it just goes with inflation. So the short answer is, I think in the next quarter, we see very stable expense. We've been around the INR 195 crores, INR 196 crores other than depreciation at the total quarterly expenses.

You see probably a couple of crores of increase in expenses, but we see a stable expense base. And the year after, barring the salary increase that we see we don't see a big expense in the OpEx part of it. The CapEx, we continue to make investments in terms of the art, in terms of the other compliances that we need to do for CV purposes or for IT intra perspective.

But from OpEx perspective, in spite of continuing to invest in talent and in spite of buying the latest cybersecurity tools we continue to invest in, we don't see a significant change in the cost base. It will be probably driven by the factors that I mentioned earlier.

[Operator]

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

[Devesh Agarwal, analyst]

My first question is on the yield that you mentioned about. So can you just clarify whether this is limited to 1 or 2 clients or this is slightly more to this?

[Anuj Kumar, executive]

No, Devesh, this is not broad-based. As we mentioned, almost all the contracts have been renewed even with most of the major customers. This could be limited to 1 or 2. I think broadly, we have reached a stage where we are an equal brim in terms of rates for almost all of our base, right? So I think it should be limited to probably 1 or 2 customers.

[Devesh Agarwal, analyst]

Okay. And historically, you have always mentioned for a 20% in growth, 1 should assume a 15% kind of a revenue growth. So in the tenants, if you can quantify for a 20% AUM growth, what could be the revenue growth that we should be assuming, these changes in there?

[Anuj Kumar, executive]

So I think this indication has more to do with the 3-, 5-year, 10-year kind of projection, right? So we say on a medium to long term, we would always have this 2015 playing out. I don't see that there'll be significantly different, probably a percentage point down at most 2 percentage points could be the impact. But I think on a best case scenario, I don't think it will be down by more than a percentage point.

[Devesh Agarwal, analyst]

Right, sir. And this would be layover the coming 3, 4 quarters. Is that the understanding?

[Anuj Kumar, executive]

Yes, it will play out over the next financial year. Probably for the next 3, 4 quarters, you will see some impact. Again, I do not expect that this should alter -- just reiterating, this should not alter our projections for the possibility per se, right, which I don't think will be a range bond. It will not be very adversely affected because of this.

But yes, this will pay out over the next 4 quarters or so.

[Devesh Agarwal, analyst]

Right, sir. And sir, recently, a study has come out back that you want to ensure that GMs kind of [indiscernible] of SIP. They've also announced some incentives for those. So that will kind of increase your scope of work and even the number of convictions are likely to go up. So how would that kind of impact your cost structure?

And also, given this entire thing that the AUM growth is slowing down. So again, the timing is very precarious that on one hand, the AUM growth is slowing down. Your costs are likely to go up because of the new regulations. And then at the same time, you are seeing some yield pressure. So how do you see the overall thing?

[Sesha Ramcharan, executive]

So Dinesh, we are extremely bullish on the overall market. I think AU growth has slowed down maybe for the quarter. But the entire building blocks are still intact. And I would say that the micro ship or the INR 20, whichever NIM you want to take, is a very foundational building block.

The thinking trend that is that SIP has been a salary process product, somebody who has a payroll on the 1st of every month. Now this is distributing it to people, who are nonsalaried, maybe delayed wages or weekly wages. So it significantly expands the market.

When it expands the market, so think of it like this, that when the AUM comes in, so there are 3 parts to it. The AMC obviously incur KYC charges. They incur trigger charges, and then they pay us for the AUM. I think once you get the money in the door, it's part of your assets, then that's a great place to be in because that will grow like the rest of the money will grow, and you will charge on it.

For SIP triggers and KRAs, there is a more beneficial rate regime only for those customers, only for those customers, which is a onetime gift from us. But we are very confident that we would like to scale it in partnership with the marketplace.

And think of it as a foundational building block. Just like you saw the normal SIP change the market in these 10 years, let's say, in 2014, '15, think of this smarter SIP to be the next change agent for the next decade. It's a very positive [indiscernible].

[Devesh Agarwal, analyst]

Right, sir. And sir, in terms of new mandates that you have won. We see over the last, say, 2 years, something means like Navi [indiscernible], they have kind of now ramped up in terms of AUM. I think this new mandate that you had won are contributing INR 13,000 crores, INR 14,000 crores of the AUM. So can you show some bit of what is the revenue yield that we have here or what is the profitability of this account?

And secondly, in terms of your newer AMC that you have done, which 1 do you think has deep -- looks to have a good potential in terms of revenue and which is the 1 which is likely to start operation through?

[Anuj Kumar, executive]

So think of it this way that in the base, [indiscernible] are the 2, which launched in about the last 12 to 15 months, now we migrated again in the last 2 years. So those are new.

But what's likely to happen in the next 6 to 9 months is that a large number of ones are readying to launch because they've got final approval. And what is visible on the horizon, although the dates are still not announced is geography BlackRock, Angel and [indiscernible]. I wait at least the first 2 of them with better ambitions to be scaled players, and they have been scaled players in various markets by now. So those 2 will certainly be scaled players.

Unifi has been not a mass market player so far. So they are moving from niche market to mass market. So they are a very high-quality operator, very popular in their set of customers and franchise. And we're expecting all the 3 to be very strong launches.

Outside of this, then we have the other customers who've signed up who thinks you've seen, which is choice, which is a scaled player in broking. Atamas, which is an emerging player that is scaled and AIM, significantly scaled with INR 7,000 crores of AUM. And then we have the cost per license. They haven't got final license yet.

So those [indiscernible]. I think those 3 will certainly add significantly to scale and profitability. Some of them are already speaking to you and to the media about their impacting.

[Sesha Ramcharan, executive]

So on your question on the scale they are in and do they actually contribute to your profitability and revenue. See, the philosophy has been that the -- and it is -- some rule is that AMC will start making money for you once there is a particular scale, a threshold, so to say, could be INR 10,000 crores. It could be INR 15,000 crores when they start making money to you. But I understand a lot of this is also platform, right, which is a new person is getting added to the platform to create an entire new infrastructure for them.

So there will be some incremental people costs that go into it, and there will be obviously some improvements that we'll do from a process perspective, what customization we do from a process perspective. But the philosopher new customers has been that we will kind of could take it slow on the first 1 or 2 years, help them grow to a particular stage, and then we'll get to the steady state pricing, right?

So a significant revenue contribution generally will come from probably year 2 or year 3, in some cases, year 3, after which I think it will be a question of ramping up profitability.

Within that, given the investments will not be extremely significant on a new customer coming on board. It actually does not impact our profitability or revenue too much. Yes, there is definitely some increment that happens from day when they start using our live services and some of our T services. But for it to make a difference, I think our threshold is generally around close to INR 10,000 crores, we start actually making some interesting contributions to the bottom line.

[Devesh Agarwal, analyst]

So these thresholds that you talk about of INR 15,000 crores, will this also hold to in case of somebody doing only passage? Because some of the newer names, they're talking about only passive strategies. So will this number hold through for that as well?

[Anuj Kumar, executive]

This could be much lesser in terms of breakeven for people who do only purely digital only passives. But those -- so far, we have seen on the ground hold the observed. We have seen an AMC specifically bring to an extent, Navi.

So once these passives only, [indiscernible] the answer beyond what it is now, you will get to know. But our confidence comes from the fact that we will be able to make it reasonably profitable in quick time. And post that, it is going to be kind of an increasing trend of profitability. And that's been the philosophy in which we have been handling these accounts.

[Devesh Agarwal, analyst]

Right, sir. And 1 last 1 on the non-MF side. So you did mention that KRA, because of a decline in revenues, we have seen some moderation. But the payments, I thought, is largely an [indiscernible] kind of a revenue stream because it's more driven by the triggers, and which hasn't seen any decline in terms of your number of transactions.

So despite that, we have seen a sequential decline in the revenues for payments. Any particular reason for that, sir?

[Anuj Kumar, executive]

No, no. This is basically a one-off. There will be some annual maintenance revenue that they get from NPCI that they have to collect from the customers and -- so that's kind of what's in the higher number we have spent. But from a tiger perspective, we have not seen a decline in the either UP auto pay transactions, which has shown an increase or the ACH transaction, which has broadly remained stable, right?

So those 2 have kind of been. There has been some validations in terms of IMPS that we have done from mutual fund customers that have come down a little and some AMC revenue that has not gone into. But the UPI and the ACH continues to remain very stable. UPS, in fact, auto pay is in fact grown in transaction over quarter-on-quarter.

[Operator]

The next question is from the line of Madhukar Ladha from Nuvama Wealth Management Limited.

[Madhukar Ladha, analyst]

So most of my questions have been answered. Just 1 on this loan by the CMC from your competition to you, can you elaborate a little bit on why this is happening? Is it because of pricing? Or is it because -- what is the value that he's seeing in CAMS? Is it because your platform is more robust, quality of service, what is driving? So some a little bit more specification and color around why this move, that will be very helpful.

Second, when -- by when do we expect this move? And if you could give some sort of number in terms of how much revenue potential this has immediately in FY '26 and there on. So yes, those would be my questions.

[Anuj Kumar, executive]

Sure. Madhukar, together this way that in a competitive market. Yes, still sometimes a uprise. A lot of times, customers buy value. Like we have said, and I want to in particularly reiterate, that we do not actively churn competitive basis. We don't. So we don't -- right for them that we can do this at a cheaper price. Would you like to get it done? None of our competitive wins you will see that color, whether new or in somebody's base. Both Nave and this contract were inbound inquiries, which means they wanted to explore the change, came to us. We wanted to see that redefinition in terms of whether they are really determined or not. And once we believe that this was a dialogue, and we always end up charging a premium.

There is a consistent philosophy. But we don't sell it any cheaper than we would do it to our base clients because that's just being unfair to your own base if you sell it any cheaper. So you sell it at a premium.

While they come, I mean, I will not get into the gory details of this, but it could be the quality of the platform, the service, the business controls incidence of consumer complaints, other things going wrong, our ability to integrate care impairments much better because that's in-house. Our ability scale digital properties, which allows us access to a much larger customer base.

I think it's a mix of all of these, and people will always have 1 or 2 reasons. Nobody has a set of 10. And that's how they take a decision. I think the indication of what's happening in the marketplace, how I see it is that when we predominantly win at a price differential in new contracts when we win enterprise differential in somebody's base. I think that then just creates a very nice feeling, and things like that can just adding [indiscernible] because that's a market which we don't even cover, which others cover what we don't cover. We don't have sales force.

But people who have heard about CAM just want to come in and talk to us and work with us. [indiscernible], we are focused. As we said in the past, that we have a large growing portfolio. We're very happy with the quality of the portfolio. So we are also reasonably selective in terms of what we want to go after, and we are not taking on every piece of work which comes from it. The last thing is to [indiscernible] counting. We don't do that as it happened.

[Madhukar Ladha, analyst]

Understood. And any indication of the size? Yes.

[Anuj Kumar, executive]

It's an old AMC. It's a small AMC. The annual billing will be a few crore rupees. Think of it at that size. So we will announce the name in the next week or 2.

[Operator]

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

[Dipanjan Ghosh, analyst]

So just going back to the yield part. When I look at your equity schemes and the IDCs that you charge less for our top partners, the top 6 partners. There seems to be clear distinction between 2 players versus the remaining 3 or 4. And if they were to realign with the other of 4, it seems that the overall impact on the book this year or the next 3 to 4 years, can we may be around -- maybe as you said, it may be 0.1 to 0.2 basis points on lower book. Is that a fair assumption that 1 should work with? And am I thinking in the right direction?

Second, on the non-MF businesses, you have a vision to kind of scale it up to 20% of the mix. So MF business with yield pressure, let's say, grow at 10% to 15%, that calculation will suggest the non-IFRS grow at 30% to 35%. While currently, this quarter has slowed down [indiscernible]. Now obviously, the capital market activity momentum is something that maybe we can't really forecast. But in markets sort of remain subdued or maybe last year 3, 4 year doesn't repeat, how is this feasible? I mean, what are the levers that you really have to have the sort of a revenue growth on the non-MF side?

Third, on the EIS business, your AUM, if I look at it for the last 7 quarters, has been almost stagnant at INR 700 billion to IDR 1.3 trillion in spite of new logo wins. So is this new client wins, small inside? Has there been some sort of change? Just want to get some color on that.

And lastly, on the non-MF business. Has the pricing across multiple business lines really stabilized? Or should 1 continue to expect that the revenue growth may lag the underlying volume or asset growth in this segment?

[Sesha Ramcharan, executive]

So there are I think 4 questions you have, Dipanjan. So I'll probably try and answer them, and Anuj can obviously come in when needed. So on the pressure, I think largely after the recent that happened over this year, this year, basically the April, and you see the results of that for the first -- top 2, 3 customers on the top 5 have been reset.

When it's a reset, I mean, the pricing contracts have been renewed for the next 3 years. And we did 1 for 1 of the largest customers a couple of years back. So while there is some amount of difference between and you can never have the same yield across all customers, obviously because of various factors, including kind of retail intensity, the additional work that we do, the AI services that we provide or don't provide what we do from a software perspective.

So there are several other things like whether they are carry, non-carry so that we do payment services to the payment services. So there are several centers to this, and it's not a base-to-base yield comparison. That is the way that both our customers and us look at.

Having said that, is there a difference that exists? Yes, there is a difference that exists on probably 1 or 2 people. And which is the commitment that we have to kind of get it this towards a negligible level over the next few years. The impact we calculated is not as much as you have. It's much, much less than what you have, which is based on our discussions with our customers and all those things. So I don't think that the impact that you have, which is 0.1 bps, is going to be the impact that we take. It's going to be much, much lesser than that.

What it is, we'll know when the actual price discussions happen over the course of the year. But this is basically where we are. The difference is absolutely explainable for at least for 3 or the top 5, 6. And probably for 1 or 2, we are getting there. That's basically the committed even the yield part of it.

On the non-MF [indiscernible], you are right, we have to grow more than 30% for us to get this. And we do have visibility to do that, that a quarter here of 22% down. But then if you see early a few quarters, it was much more than 30%. So I don't think we should read too much into 1 quarter about 22%. I think the building blocks are in place and the new logo wins are what Anuj just explained in the earlier part of the presentation.

And a lot of it is annuity business. It is that you get attached to them and they agree along with you, be a payment kind of a business or being a KRA kind of a business, multiple downloads happen. We get paid for every download. And we are getting into new areas like cars and we are getting to new areas in KRA, like capital markets and that products are getting [indiscernible]. So very, very content of doing it.

Of course, across -- along the way, there could be a scope for an inorganic acquisition that will happen. But all put together, I think we are reasonably confident that we will reach this 20% in terms of the non-MF share of overall revenue.

In terms of non-MF pricing, see, it largely stabilized, largely stabilized. If you see the basic churn we were having was on the account aggregator stuff, I think they have reached a stage where, obviously, there could be some negations here and there, but it's not a steep decline of, say, 50% from what it was in the earlier years or something. It's largely stabilized with a small variation here and there.

In terms of payments, it's all gain largely established of to be the one-off deals because of volume that, that could be a higher discount has. But otherwise, I think these dynamics are largely settled, and we don't see much of a difference. And we already had a reasonable amount of visibility and stability of the AF pricing, which over the last 1 year. So that kind of continues.

So repos barring some large insurance company contracts, which may come where there could be discounted prices. I think the pricing has again stabilized that to 5 in terms of the new policy conversion or for AMC. So I don't think we'll see significant pricing pressure on the non-MF businesses, although there could be pockets where for large deals, that could be less than usual price that we will charge.

On the AUM, our AUM has grown more than 50 percentage in terms of -- it was less than INR 2 trillion, and we have kind of come to INR 2.38 trillion or INR 2.35 trillion is the current AUM that we service.

Yes, there is no -- Anuj, you want to add?

[Anuj Kumar, executive]

Yes. So when you see the large base that we have acquired over the last 10 to 12 years, while other companies where the base may be just 2 or 3 years old. Some of the old funds do fall off. So you will have a part of the AUM, which is falling out. It does get made up from new launches to. But sometimes, in a quarter, these numbers may not exactly be the same.

Secondly, it also takes some time for people to launch and scale. Some are in very, very aggressive entities, which will launch the scale immediately, and some will take time. I think on balance, both for domestic and [indiscernible], from a quality of the franchise, we almost own the entire -- a significant part of the market in terms of names, you can go through that. We are very happy with the quality of the portfolio, the way it is growing.

And the net of falloff, we believe, it's a reasonable growth in terms of AUM.

[Dipanjan Ghosh, analyst]

Got it. But the reason I asked about the AUM portion is because if you repeat this sort of a revenue run rate or maybe a marginal increase in next 1 or 2 quarters, then suddenly, the Y-o-Y revenue trajectory starts looking quite weak. And so maybe the only way you can do it is more schemes or more logo wins. So is that a fair assumption? I mean, some of these things will play out over the next quarter.

[Anuj Kumar, executive]

So broadly, what we have said is that we would like to grow MF revenue at 15%, non-MF in excess of 5%. Last few quarters, we've grown in excess of 20%, sometimes in excess 30%, too.

AIF, our belief is domestic AIF [indiscernible] city is perhaps a 20% growth market at about a 35% growth market in AUM. At that level, we are confident we should be able to deliver a baseline 30% growth in the AIF revenue over the coming quarters.

[Operator]

Next question is from the line of Supratim Datta from AMBIT.

[Supratim Dutta, analyst]

My first question is on the MSRK business and it's pertaining to yields, but a bit more fundamental. So if I look at some of your large mutual fund clients, they could be somewhere roughly around INR 100 crores to INR 150 crores in revenue to you based on their AUM size.

Now at this size, if further growth like you expect AUM to grow within a certain period of time, it could start backing INR 200 crores as well. Now this size, why don't they start looking at maybe in-housing these services? Because after a certain threshold, they could potentially spend this much money and build some of these services in-house. So what stops them you maybe at INR 200 crores, INR 250 crores when the fees becomes INR 200 crores, INR 250 crores to enhance this service, spend that once built in-house? That's my first question.

And the second question is on the repository business. While there has been a strong pickup in the policy numbers, but the revenue growth has still been only around 12% Y-o-Y. So just wanted to understand how does the policy growth really translate into revenues? If you could help us understand that, that would be very helpful.

[Anuj Kumar, executive]

Sure. So outsourcing in sourcing, I think, not just for FRP. Globally, you see anywhere, any industry. The trend has always been outsourcing irrespective of the size of the book or the amount of money that people spend, and that's largely because in our kind of outsourcing, when you see, we run a common platform. It's a common platform.

Our assets are in the range of INR 46 lakh crores, INR 47 lakh crores. The cost of the entire platform and the operation, the common cost is spread over almost a INR 50 lakh crore base. Even if you have a single mutual fund, which is less a INR 10 lakh crores or INR 12 lakh crores of active money, it is very difficult for them to mimic the efficiency, the strict rate efficiency of doing this kind of work because in rupee terms, it will not compare.

Just to give you a number, we have over INR 9 crore folios balances and about a INR 200 crore plus overall AUM and mutual funds. It translates to the revenue by portfolios. It comes to about INR 130 portfolio per year cost and it's a fall in cost. And we do all the work that in the world of direct equity, the stock exchange, the depository and the clearing operation to.

So owning the scope, delivering the results at this cost at the accuracy level that we do, amortizing the cost of the platform over a very large and growing asset base, I think those are the determining building blocks of the business. Even if somebody is willing wanted to put the money and was able to build the capability. The net result of having the economic layout demand this time period will not be possible. And that is 1 of the strong detriments, not just clear but in any part of the world for this work to get is sourced in a large way. That was your first question.

On the second part, on the depository growth, I think growth has been very, very consistent. Almost half the RAP portfolio has got built in the last 18 months. And we believe in the next maybe 2 years, we will build the next INR 1 crore policy. So the growth is very steady. The revenue is still split between repository, which is the platform-based business and outsourcing we to the labor base business. There is still some lever-based business sitting there.

I think the real kicker in scale, so repository by its is perhaps still not a INR 10 crore business. If we just take the platform part, getting close to breakeven, but still not there. I think the next 1 year is crucial as we move from INR 1 crore to INR 1.5 crores, INR 1.5 crores to INR 2 crores policies. Close to somewhere in this year, you will see a revenue spike in the pure deposit treatments. It is very efficiently run like any of our platform businesses. You know that most of our book is platform, whether it's a KRA RT of payments over there is things like [indiscernible] Central. These 2 attributes of being a platform business where you have a common platform, common infrastructure, the users continue to double to triple, but your cost remain almost the same [indiscernible] infra. That part are playing out. I think we are perhaps 6 months away from that point.

[Operator]

The next question is from the line of Sanketh Godha from Avendus Spark.

[Sanketh Godha, analyst]

The EBITDA margin improvement that you have seen in the current year or for the quarter. Is it largely because the profitability of the non-MF business has improved? Or is it largely led by MFA itself?

And second, the reason I'm asking this question is that next year, there will actually yield pressure because of the business. Then is it fair to say that if it is a fact driven by the margins going be binder patient mix your non-inverter business will compensate for any loss in margin case of pressure. So that's my first question.

[Anuj Kumar, executive]

Yes, Sanketh, it is contributive in both. As we have seen that as the revenue is ramping up for the nonimplatform-based business, right, the profitability profile of the non-bucket assets has seen an increasing trend. But however, this is obviously, MF is still 87% of my portfolio. So the profitability increase has also contributed to a big extent by the MF increase also.

The confidence that we will let -- we will not let any yield pressure have a disproportionately higher impact on the profitability. It stems from 2 things. Number 1 is this is basically, we are reached a state where sales not of automation is there. For example, there was a question earlier on SIB and the increase in cost assets. So it's not as to repay incremental cost for every asset whatever we do, right? A lot of these processes are automated in terms of not requiring additional manpower.

Obviously, there will be some hiring that will happen. So let me be 1 lever that we have in terms of ensuring that the profitability depletion is not seen. The second is what you mentioned. It is a non-MF asset business. And as I told you, they are between 10% and 15% EBITDA. And there is nothing that [indiscernible] increasing this towards 22% EBITDA in the next year, right, given that we have reached [indiscernible] in some of these businesses. It is going to be a disproportionately higher increase in profitability going forward on a lot of these businesses, right?

Whether it's a reduction of loss in some cases or it's an increase in cobot in some cases, at least from the base line perspective, it is going to be very beneficial. So combine, we will ensure that the impact on profitability is not going to be significant. It's a combination of these.

[Sanketh Godha, analyst]

But Ram, is it fair to say that because of the pressure given 87% of the business is MF. So basically, that margin, what you saw in the current year might not hold up largely for the next year even if you see an improvement in non-MF business?

[Sesha Ramcharan, executive]

So what you have seen over the last 3, 4 years, Sanketh, you will note is that we have seen a creep up in the margins of more than 100 basis points on a yearly basis, right?

If you remember, when we did these calls for the first 1 or 2 years, we used to say that we create a margin of around 40 percentage and a good year, 40, 42, 43 percentage. Now in the last couple of quarters, we are cutting margins of 37 percentage, right? So there is an inherent way in which we run the business as well as the business model, which ensure that there is a creep-up in profitability that happens.

And we've also said that we are not [indiscernible] profiter and we don't expect a margin of more than 50% also.

So I think inherently, there is a profitable bias in this model, which has continued to play out. The fact that there is a yield depletion that happens will probably lead to some part of it. But on an overall basis, yes, there -- obviously, there could be some pressure on margins, but we don't expect that this will be significantly declining or that will be an impact on the margins even when we account the steel pressure. That is basically reality you've seen over the last 4 years also.

[Sanketh Godha, analyst]

Got it. And the second question which I had was that the 1 or 2 contracts, which you said to which we see repricing. So after repricing, is it fair to say that these companies field will be very similar to the similar size what you already charge? Or there still will be a gap and if there could be 1 more round of negotiation in the future to bring it to closer to the similar AMC?

[Anuj Kumar, executive]

So look at this way, and this is the right process that we are following in the market. In any perfect market, all buyers get to know the price that others are paying. Pricing asymmetry is difficult to have for a cluster of customers, we cut of the customers who have assets of, let's say, greater than INR 5 lakh crores in the range of 10, there are people over [indiscernible], there are people who are smaller than that. And I think we have been able to rightsize these clusters.

We do not have pricing, I would say, asymmetries anywhere from in the market apart from those 1 or 2 cases. It's always good to attend to them. Like Ram said, we tended to solve this in '21, '22. There was some impact for 1 year. We will again rightsize everything. So you see profitability in the range of 47% because [indiscernible], incremental assets come at very small cost and efficient operation will turn a lot of that revenue into profit.

So look at it like that, it was the right thing to do. We will be doing it over this year. And [indiscernible] towards in terms of having a large impact on profitability, et cetera, we are taking budgets so that most of that will be contained completely.

[Operator]

The next question is from the line of Tanuj from JPMorgan.

[Unknown Analyst]

So just a couple of clarifications. One is on your KRA business model. So I think the revenues are largely linked to if you get any things for the record that are already there in the system. So if new account openings, you've already seen the account opening slowing down. So if that happens some mutual funds also does this remain a risk for this particular business going ahead?

[Sesha Ramcharan, executive]

No, that's correct. That's correct. You have to think of the business as being tightly coupled to the capital markets and the right metric to look at it in those markets is account opening because that is when the entity or the intermediary comes in downloads our record and they pay for it. every time they create a new account, they upload the report and they also pay for it. So that's the primary activity on which our CRM business is largely dependent.

You saw tremendous scale coming up because that activity was heightening. In those style payers, when that activity falls to, let's say, 60%, 70% of its traditional momentum, you will see some compression in KR demand and care revenue. Okay.

[Unknown Analyst]

Understood. That was helpful. And second question, sorry to just cut on the mutual fund that is shifting from cape into you guys. You said that the pricing that you are giving is a premium to your current customer base. But would it be possible for you to disclose if compared to [indiscernible] you guys could be perhaps charging lower? Or you can't disclose that right now?

[Anuj Kumar, executive]

No, we will be charging higher. That is the term we offer to anyone who wants to come in. We don't sell surprise. I mean, broadly, if you see philosophically. So both our principles, we will not sell lower than our installed base, we will not charge this than what he's paying somewhere else.

[Unknown Analyst]

Okay. Got it. That's helpful. And sorry, 1 last question was, would it be possible to disclose the EBITDA margins in your non-mutual fund business?

[Sesha Ramcharan, executive]

Yes. I think while we generally give a range. And I again always caution saying that all these businesses are very different in different stages of where they are in terms of go-to-market. But then Just ease of understanding, the bucket of non-MF has got a margin of close to 15%.

[Unknown Analyst]

15% EBITDA margin trend?

[Sesha Ramcharan, executive]

Yes.

[Operator]

Ladies and gentlemen, since we have had a spillover for over 15 minutes and we have a few questions, the management will be happy to answer these questions offline, and Orient Capital will reach out to set these up. I would now like to hand the conference over to Anuj Kumar for closing comments.

[Anuj Kumar, executive]

So thanks, Shiva. On behalf of CAMS, we thank you for your time and participation in the call and your continued support and coverage of CAMS. And for any further information, please do feel free to reach out to Orient Capital or Anish Sawlani, and we'd be happy to after any questions that you have. Thank you once again.

[Sesha Ramcharan, executive]

Thanks. Thanks, everyone.

[Operator]

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