Computer Age Management Services Ltd

NSE:CAMS

Earnings Call Transcript

[Operator]

Ladies and gentlemen, good day, and welcome to the Q4 FY '25 Earnings Conference Call of Computer Age Management Services Limited hosted by MUFG Investor Relations. Today, from the management of the company, we have Mr. Anuj Kumar, MD and CEO; Mr. Ramcharan SR, SFO; Mr. Anish Sawlani, Head, Investor Relations. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Ms. Masun. From MUFG. Thank you, and over to you, Mr. Masun.

[Unknown Analyst]

Thank you. Good morning, and welcome to Q4 FY '25 Earnings Conference Call for Computer Age Management Services Limited. Before we proceed to the start the call, 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. The 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 [indiscernible] Thank you, and over to you, sir.

[Anuj Kumar, executive]

Hi. Good morning, everyone. Thank you, Marcum, for the introduction of the safe harbor. Thanks, everyone, for joining this Q4 earnings call of CAMS. Like we've done in the past, I'll take you through a quick summary of facts, which are all encapsulated in the presentation. We estimate each one of you will have a copy. And then Ramcharan will cover the financials. I estimate we will still have about 35 minutes to go through our Q&A, if not longer.

In terms of the quarter, I'll just cover the year or start with the full year FY '25. So in terms of the entire year, our revenue was up. It's a handsome increase for the year at 25%. All parts of the machinery fired and fired very well, both MF and non-MF. Inside of non-MF, again, several parts of the business fired quite well, bringing us to those growth rates. So like you can see, MF revenue grew by about 25%, plus non-MF was just short of 25%, but sustained growth in non-MF, I think, has indicated the faith of the marketplace and what we are building in that portfolio. And again, we are very hopeful and confident that we will have a repeat here in FY '26 in delivering at least high double-digit, 24%, 25% growth in non-MF to contribute this year, too.

For the year, share of non-MF revenue was at 13%. Given the backdrop of all of this, given the backdrop of 25% revenue increase, we had growth in absolute EBITDA of almost 30%, 29.7%. EBITDA percentage stood at a handsome 46%. And I'm sure you've been witness to our performance for the last 6-odd quarters, and you've been seeing those middle 40s, mid-40s EBITDA performance for some time, being at about 47, but very happy to tell you that for the year, it stood at 46.

Absolute PAT grew 33%. Absolute PAT margins was just short of 32%. I must remind all of you that in the markets, and you know that almost 90% of this business is linked to what happens in the capital markets, especially the segments of MF, KRA alternatives and to an extent, small extent payments, all this growth has been achieved despite the fact that from September up to March, what we saw was almost a sustained pressure on the indices, which started easing, let's say, in the month of April and May. But for September to March, there was sustained pressure. At the peak, large carbon dices had scaled back almost 14%, 15%. And new [ demand ] and broking accounts were not opening. There was some moderation. I would not say pressure, but some moderation in terms of how SIPs were being triggered. So despite all of that, you're seeing the results that are in front of you.

I'll move forward. When I show you the same thing for the quarter, and I think it's important to just understand what happened in the quarter. From a quarter's perspective, we were staring at a backdrop of 3Q or third quarter, which was almost INR 370 crores in revenue, INR 173 crores in profits.

From an operating part, we did not lose much. From an operating part, we lost about INR 3 to INR 4 crore in revenue against that backdrop of INR 370 crores. What moderated the revenue was largely the price adjustment that we had referred to in the last earnings call. You will recollect that we had said that given the fact that most of our large contracts are now heading to be fully digital, any pricing asymmetry had to be taken out, which we were doing for some time. And I think that's one impact that you're seeing in the fourth quarter. So from an operating perspective, we lost about 1%, 1.5% revenue. The balance [ 2 to ] between 2% and 3% was lost because of the price. So you see that revenue grew overall year-on-year for the quarter, just under 15% MF, again, under 15%, non-MF, about 15.8%. And again, non-MF, despite some of the headwinds, not in the entire on portfolio, but in some of it, I think it's just a great indication of how this part has done.

The share of non-MF for the year was 13%, for the quarter was 13.7%. So it is inching up, and we will make sure that we continue to obtain what we have stated as a perceptible differential between the growth rates of non-MF and MF -- non-MF. Even for this year, we're projecting in excess of 20%, closer to 25% growth.

For the quarter, absolute EBITDA grew by about 12%. Despite whatever happened, despite the fact that revenue fell by almost INR 14 crores, so almost 4% plus, we have still been able to deliver a close to 45% EBITDA margin. And I would say there is no better testament to how we run this model and how this model operates across its various constituents that despite some of these headwinds, we've been able to deliver close to 45% EBITDA margin.

PAT grew about 10%, and overall PAT margin stood at 31% for the quarter.

So this is a broad financial summary. I know that a lot of you are very curious about the various components of this entire revenue and profit trending, including yields, bps and how it will play out in the next few quarters. I'm very happy to take that up as we move forward in this call.

I'll move forward. Just some business highlights. And again, I think just foundationally, the way we built business because you build these businesses on operating excellence, delivery, diversity of products, a healthy sales pipeline and how you are winning and growth of market share, all of that leads to every growth. Revenue growth obviously leads to profit growth in our business like any other business. Foundationally, I think all these forces are lining up, not all our cylinders are firing. And we won't have achieved what we achieved in the fourth quarter if those things were not happening.

Overall, our market share by assets stood at 68% market share, although we've not been quoting that metric in the past. But given the fact that some other people quoted 26 out of 51 working AMCs are with us, our overall AUM growth in the quarter was 24%. This largely mirrored the industry's growth. Equity assets grew about 29%. Equity assets, despite the fall in the United States, opened the doors for this industrial and opened the doors for us.

Equity assets also helped the INR 25 lakh crore mark. Inflows remain sustained. You've been seeing the SIP and non-SIP inflows. And you know that, that number has held quite well. SIPs collectively delivered more money in the fourth quarter than in the third. Our live SIP count grew about 18% to get to what INR 5.7 crores. That's live SIPs. Gross new SIP registration for the year grew 51%. So just imagine that whatever we built all this while, the growth was significant at 51%.

Our unit investor base did well across the INR 4 crore mark. This grew significantly ahead of the market. Market was 22%. Our new invested account grew 26%. But what is most gratifying, I think, is that in the history of CAMS, I've been here 9 years, I don't remember a single year where we took more than 1 AMC life. In the first quarter -- in the fourth quarter, we took Angel 1, which is a marquee name, Unifi is another marquee name, live during the quarter, taking the live AMC count now to 21. But I think the good news is that there are 5 more of these, which are waiting to go live, which will happen within the next 6 months. And I think from investing in the future and creating a future perspective, there is no better news than this. So this 5 more comprise, of course, Jio BlackRock, Pantomath Choice, Torosoro, Seabank. There's one more. So that's the count that we are expecting to take live in the next 6 months and again brings a lot of strength in the overall scale up of the business as we move ahead.

Beyond mutual funds, CAMSPay revenue grew 85% year-on-year for the quarter. We launched Bima. Well, as you know, this is a new innovation where you can apply for a life insurance policy and not worry about money getting out of your account and then the insurance company telling you that the application is rejected. You will just see a blocked amount like you see in IPOs.

Alternatives had a very strong quarter, 56 new mandate wins. Total new mandate wins for the year, including for Belser, crossed 200. And those are astounding numbers. You have to be in a place of significant solid market leadership for so many new clients. And so many existing clients to place their hands and say, look, they want to work with you, which is what's happening here. We now have over 200 installations of CAMS [indiscernible].

Reported 3 improved market share, I think that's great. It was improved market share to 40%. You know that we've been quoting 37% and 38%, the 2 numbers for the last almost 1 year -- last 4 quarters.

LIC [indiscernible] year-over-year signing on for repository services. This will begin with the digital issuance only will not go to legacy yet. But at some time, it will, I think, from a signal perspective, it's a fantastic signal for the marketplace when that happen. Total count of policies is now exceeding INR 1 crores, it's INR 1.1 crore. During the year, of course, we want to grow this significantly. We know that a base growth rate of between 40 to 50 lakh will anyways happen given our 1 million new policies per quarter tax record, and we're trying to get some policies to expand this 40 lakh to, let's say, 60 lakh or 70 lakh. So it should be a promising year.

For CAMS KRA feature live with integrated services will be on Central Star Union Dai-Chi the last one, which came in.

CAMS KRA had a tough quarter -- had a tough quarter for all the reasons known to you. New folio count creation in MS fell. New Bima accounts are new -- broking accounts fell. Despite this for the year, CAMS KRA had a 30%-plus increase in revenue. But nice diversification outside MF's 3 leading brokerages. When I say leading, think of these as one of the top 10. [indiscernible] and we'll start -- have started giving us payload.

[ Fintuple ] went beyond the custody-led platforms to create foreign NPS, which is the pension services with a product called [indiscernible] won their first deal to build and integrate a back-office platform for a very leading pension funds BOP business. Think of it again in the top 10.

And then 360 had launched the BFM product. We had reported this last time that we are now implementing a large fixed price, fixed revenue contract free of scope. It's one of the most downloaded -- I could say the most downloaded financial apps in the country.

So across product lines, I think it's been just great going for the entire business.

Move forward. The charts on operational highlights. There's nothing in particular that I want to stop at all out. It's all accessible to you, guys. Transactions continue to scale, equity AUM share went up about 0.2% from late 65 to 66.1. Equity net sales, obviously, during the year, held quite well. Over to the next. And then similar trends for the fourth quarter are on the charts, and you can develop from that going forward.

Go forward. Next. There are more projects wide I'm just thinking [indiscernible] Yes, I would say LIC as an account for account authentication services for CAMSPay [indiscernible] to scale up. So we would like obviously this to become a flattish account for us riding on what we will do in depository payment. So the account services that [indiscernible] [indiscernible] Pay continues to be promising to transactions to almost 25% quarter-on-quarter.

I know there are questions from some of you on whether we had any lumpiness or onetime revenue income. There's nothing in particular. Maybe a couple of floor deals I'll let answer and talk about that. But across the product line, we've said this is in the past and I'm saying it again, that we don't try to book any upfront income to inflate this quarter. We just lack the milestone should billing come to us whenever it is asset or transaction based, we will bill when we get the assets on the [indiscernible]. That's what the whole thing were.

Other than that, I think I've covered most of the stuff. Go forward. So what we'll do is I'll hand this over to Ramcharan now. I'll hand this over to Ramcharan to do the financials, and then we'll have time for the Q&A after that. Ram?

[Sesha Ramcharan, executive]

Thanks so much. Just gone through the numbers on the level of detail, so I won't repeat those numbers. I just kind of drilled out on a couple of details on the financials, which may [indiscernible] on some of the questions that you have also.

The quarterized growth you have seen, it's [ 14.7% ] year-on-year basis and [indiscernible] quarter-on-quarter. The asset-based revenue, actually, if you see the assets went down there on 1.5% on an average basis in the quarter. And actually, the volume variance for us, which is what is attributable to the reduction in the AUM, is actually [indiscernible] 1.5 percentage. So the major contributing factor for the reduction has been, as Anuj was mentioned, the price research that we've been at for one of the media customers. If you take that away, I think the E&P growth broadly is in line with what we expected.

The good news is that the reset has been broadly finalized or in approximately [indiscernible] noting the highs. I think we are at a stage where we know in certainty what the impact will be for this quarter and going forward also.

From a non-MF perspective, you've seen that there has been a healthy growth even in the current quarter. We've added around 6.6% quarter-on-quarter. The good part is this is a little more broad-based. Some people have contributed this being very localized, but it's actually a little more broad based. For example, AIF grew say, 16% year-on-year, they grew 85% year-on-year. They improved 19% on a quarter -- on a quarterly basis. Obviously, there was some strain on the TRA revenue, which is attributed to the [indiscernible] in the capital market. But I think there are 3 tenders that are firing now. And it's not on as critical that is contributing this opportunity. Although we have done exceedingly well when compared a few other verticals, but the growth is more broad based in terms of various verticals in [indiscernible]

From a yield perspective, I know a lot of questions would be there on the yield, and as Anuj said, we will take it forward in terms of any questions that you have. But I'll just leave you with 3, 4 points, right, which is that the repricing that we had alluded to in the last quarter, we had, in fact, stated explicitly in the last quarter, is actually behind us. No. We know exactly what is going to happen in terms of movement from this particular reform going forward. So you have seen a 4% drop in yield quarter-on-quarter basis, purely from an AUM perspective, and this is a different way -- we're a little more granular in reporting what we do when compared to competition, which is that we report the AUM [indiscernible], which is currently around [ 2.24 ]

What we expect, if you actually pay out the impact going forward is that you will see we have done almost 50% of the impact is that in the base in this particular quarter. So if you actually move forward, you will see probably a similar impact in terms of quantum coming in the next quarter or 2. And post which, everything will be there on the case.

So the whole guidance that we gave in terms of the annual drop in yield, if you see in the current year, we would have ended the -- this is [indiscernible] speaking about the end of the year with a bps of around 2.33, which would have been a 6% to 7% drop when compared to the last year. And then next year, you will see a similar kind of a drop, right? We had guided that it will be around 6% to 7%, and I think this will be within this range for the next year.

But if you take the quarterly bps, which is the last quarter bps, which is at [ 2.24 ] and if you actually see how it is going forward, I think the of Q4 of next year, the depletion in yields could be close to 4%, right? So that's the exact numbers for you in terms of what we anticipate. Obviously, the AUM grows more, and the mix is more favorable to us.

One of the contributing factors this quarter has been that there is a negative mix impact [indiscernible] the overall profit has come down by a percentage fund. So which means that what would have been a couple of growth of additional revenue has not approved to us. But going forward, if the mix is constant, we expect that the yearly yields when compared to the last year, the current year, the yearly yields will drop by around 7 to 8 percentage, most likely around 7 percentage. And if you take the last quarterly yields and you compare it to the last quarter of next year yields, I think the drop will be close to 4 to 4.5 percentage.

So the thing I would like to reiterate is that the uncertainty that we had suggested to you last quarter in terms of repricing, it's largely behind us. And the amount of -- is there in the base and 50% will get into the base for the next quarter or 2.

From a profitability perspective, again, we've shown strong margins. We've always said that we will try and endeavor to get a margin of 40 to 45 percentage. And this quarter was a difficult quarter. There was -- from an AUM growth, there was more growth. In fact, there was a small reduction in the AUM plus the repricing impact. Obviously, the non-MF growth helped us in kind of mitigating the impact. But to end the year in the quarter with a 44.9% margin is, I think, again, as Anuj said, a testimony to the resilience of the entire model, right? So we've always said that's a fixed cost model, and I think this quarter proves the fact that you don't have a growth in AUM, but your cost also remains static. We did not decrease the cost too much, but you also no cost increase was that.

So that is broadly the commentary on the margins, the yields and the growth in non-mutual fund business. I will now leave the -- leave it to the moderator to open the floor for questions.

[Operator]

[Operator Instructions] The first question is from the line of Swarnabha Mukherjee from B&K Securities.

[Swarnabha Mukherjee, analyst]

Thank you so much for leading in terms of base. I just wanted to understand, sir, in terms of the quantum of renegotiated contract, I think I'm trying to understand why would the yield drop happen over, say, 2-odd quarters, like you said because I mean, is it that different teams would start getting repriced at different points of time or how will it work? Because [indiscernible] that even if it might have happened somewhere in between the quarters, if we take possibly 1 more quarter for exiting to come into the base. So if you could help us understand it will take 2 quarters only because of the renegotiation impact and not otherwise [indiscernible] pricing might continue to play out. Sir, that is one question.

Second is in terms of the insurance repository, sir, I think, congratulations. That trends look very encouraging. So how much is this coming from the LIC contract, is it yet to come going forward? And if you could give some color on any given the fact that more -- there is more appetite to issue digital policies through insurance account, is -- how is the pricing environment? You give also broad indications of say, account creation charges and what do you incur as revenue when you do the maintenance of an existing income.

Thirdly, on the cost side, sir, normally, you've seen that, I think, in the first quarter, you see bumping of employee expenses. How should we think about for FY '26 or maybe 1Q '26 onwards on that? And also similar commentary on other expenses because I think when I look at the other expenses number at a consolidated level, I continue to see that even over the quarters, it has increased. Are these like would pay for the newer segments because of the year to spend more, if you can give some indication? These are my questions, sir.

[Sesha Ramcharan, executive]

So Swarnabha, I'll just try to take 3 of your questions. So on the insurance, [ Anuj ] will probably chip in. So with regard to the commercial concept, obviously, we wouldn't like to get into details of the commercial construct, but our endeavor has always been, and we have mentioned it in the last quarter also, to stagger the impact.

And also, number 2 has not been to wait for the contract. For example, this particular contract would have come up for renewal in September. But we thought that it will be better to kind of take a standard impact over a period of a couple of quarters. So the commercial construct is that it's not as we are deferring anything or that is something that we are delayed provisioning or something. That's that, the [indiscernible] in the fact that if we get staggered over a couple of quarters. So most of the impact is that in the 50% in this quarter [indiscernible] balance, some small part of it could be there in the quarter after that. But that's the way the contract is also structured, and that's the way our revenue will be booked. So that's the reason for that.

From the cost side, see, the other expenses, you will see that overall from a cost control perspective, the last quarter has been almost like a flat. If you take away the depreciation, which is obviously, a reflection of the increased investments we are doing in CapEx in terms of various compliances as well as the increase in transaction volume, the cost has increased has been 0, literally 0, right. And the other expenses are more a reflection of some timing differences. For example, the -- there could be some delay collection in some accounts, which could -- accounting wise, will have to create what is called an expected credit loss, which is not a pertinent plug, it's kind of a timing loss. So those things will continue and there are some legal expenses that we have done there is a [indiscernible] that we incorporated for which we had to pay loyalties, et cetera.

So this is not a trend going forward. Overall, from the next year perspective, we have repeatedly said that we will be able to hold cost at a less than 10% increase, right, when compared to the current year, which I think is very much achievable. We will try to do better than that, but less than 10% is something that we are forecasting for the next year or 2. So that shouldn't be something topmost in mind in terms of what we can do.

In terms of insurance repository, Anuj, [indiscernible].

[Anuj Kumar, executive]

So just in terms of insurance repository, you would have seen that still about a year back, we used to increment volumes at the rate of about 20 to 25 lakh a year. Last 1 year, this increase has almost doubled to become 40 lakh to 50 lakh.

LIC is still not integrated. So while they've taken a decision that an integration is happening, the real policy flow will start only from the month of July. They had the option of saying that all new issuance, which is upwards of INR 2.5 crore policies will come into demat. But what we increasingly believe is that most of the digital channel issuance will happen in demand, so which would be under INR 1 crore new policies in a year. So we expect that this year just at an organic rate, we would have got about 50 lakh new policies anyways. All the impact of LIC could be between 15 lakh to 20 lakh policy and if everything happens in time, which it will show in fines that it will. So it will be a nice filler if we get that 20 lakh on top of the base 50 lakh.

And then as LIC kind of moves forward beyond digital into other kind of issuances, those numbers can only go up. It has the capability to almost, given the market share, they're more than half of the market. They bring in all the heft, the demarking piece will certainly go to 2x in the market, let's say, in the next 3 to 4 quarters. That is clear. So therefore, it's a big [indiscernible] the market as far as policy issuance and policy accounts are concerned.

The prices are all fixed. You know that whatever the prices have moved southward in the last 2 or 3 years, but they're pretty stable now. So we expect that because most of these are long-term contracts, the price looks are where they are. The icing on the cake is that as these new insurance companies come in, they will all start getting integrated with demat central, which is the single, only proprietary platform to do electronic transactions in one place for your whole portfolio, which means you open an account with a depository services and then Bima Central is open for reminders, payments, digital learn, claim marking, all of those things. So there, of course, the first production prices will be much better. And as that happens, I think the cumulative impact of the [indiscernible] of these 2 things will be perceptible in terms of how that market grows.

[Swarnabha Mukherjee, analyst]

Understood. Sir, just a couple of follow-ups. One is how are the commercials for the demand? Is there any difference in that?

And also, like you had mentioned in your opening remarks about CAMSPay and I think phenomenal growth there, I think, quarter-on-quarter also very strong. So if there is nothing lumpy as you have mentioned? And how do you think about the business coming because of the new mandates you have got in over the last 2 quarters? Or is it that organically, the [indiscernible] ecosystem is driving this [indiscernible]?

[Anuj Kumar, executive]

So I'll take the payments question first. I think one part of the growth is this very simple where we are working with, let's say, mutual funds, where the SIP count and the number of matches or one-time mandates that will register, the triggers continue to happen. As you see momentum in these smaller SIP counts, the [indiscernible], SIP, [indiscernible], and some of the AMC now launching this daily collection product, right, where you can [indiscernible] INR 20, INR 50 and INR 100 from the accounts of nonsalaried people, you will invest to continue to see growth there. So that's one part of it.

We have said about a year back that we are now broadening our reach into the education system, which is to collect fees and recurring charges from students for merchants which are essentially universities, colleges and hospitals. That has shown some pickup. The Bima, as a part, would scale over a period of time. Right now, it's a very new thing, but you must have read that IDLs that this delay in refunds of moneys for policies, which are not accepted and not granted. It's hurting investors, and therefore, this innovations coming.

Apart from this, we have not built out a payment gateway product. We were a pure payment aggregator. And we have now built out the gateway product. So we've begun to get some revenues from this. So collectively, this is part of the non-MF business. Non-MF is about a run rate of about INR 200 crores a year. We are saying that this year, we will certainly like to get to about 25% growth there, too, like in the previous year. So about INR 50 crore absolute increase. Payments should be the #1 going in [indiscernible] growth this [ year 2 ]. Alternatives and KRA will be the other 2 [indiscernible]. I hope that answers your question.

[Operator]

It seems like the participant's line has been disconnected, sir. Okay. The next question is from the line of Devesh Agarwal from IIFL Capital.

[Devesh Agarwal, analyst]

Coming back to the price negotiation that you talked about. So just to understand better, the entire impact, to a large extent, will be captured in the first 2 quarters. First quarter has already gone by. And the following quarter, we'll see the balance impact?

[Anuj Kumar, executive]

That's correct, Devesh. Just think of it this way that about half of the impact -- and I don't want to get into granular reconciliation in this call, but I think that half of the impact that we had to take is already in the books. So that's good news. Like we said, we had a INR 370 crore revenue quarter in the third quarter. Third quarter to fourth quarter loss was about INR 14 crores. Out of which, business reasons only account for about INR 3 crores. The balance is all price. That's half of the impact, the balance half of what we have to take in price will happen in the first and second quarters.

But like Ram said, I think we wanted it to be definitive. Non fussy. And we didn't even want to give you a directional quote. We just want to give you, I mean, short of telling you the firm numbers. I'm just telling you what it is. So from a future quarter perspective, I think one question in everyone's mind would be on what will revenue look like because we will take some more haircut in 1Q and 2, which will be 50% of the impact. Our guess is that other things holding.

The INR 350 crores, INR 360 crore line should not be breached as far as overall revenue is concerned, which means in 1Q, although I'm not giving you a firm guidance, but just indicatively, we believe that we will not reach that line and go below that. And then we start building up on growth again. That's how the [indiscernible] look.

[Devesh Agarwal, analyst]

All right, sir. And you also did mention that the exit run rate for the year is roughly to be around [indiscernible] -- sorry, [ 2.15% versus 2.2% ] for this quarter?

[Sesha Ramcharan, executive]

Sorry, your question on exit yield for the current quarter or what we expect to be in the...

[Devesh Agarwal, analyst]

Current quarter from [ Q2 -- Q1, Q2. ] You're saying the FY '26 exit run rate would 2.15. What is your expectation?

[Sesha Ramcharan, executive]

Yes, 0.09 reduction. 0.08 to 0.09 is what we expect.

[Devesh Agarwal, analyst]

Sir, this particular contract, if I recollect right, has been some [indiscernible], as we said, it was during September, but the some of big earnings. Now what confidence do you have, and we have, to a large extent, completed the negotiations with them, and this will not take about, I'd say, a year or 2 time again.

[Anuj Kumar, executive]

So when you look at it, Devesh, like I said, unlike our peers and depositories, et cetera where there are standard rate cards because the services of scope are undifferentiated. I think in the RTA books, you are aware since you research the sector, that prices can be different dependent upon when a client came in and also upon some of the specific scope that was performed for them. Scope -- very deep at one time before the digital era. So think till about 2021, scopes are very different. So I could be servicing the parent organization of particular MF, and I may have physical ability to do KYC at several thousand branches. We may have biometric machines there. We may be lunging paper and checks. In the digital era, a lot of that happens digitally and therefore, that scope asymmetry has been going away for some time.

So when you think of this, I know that some of you believe I like to think of this as close of negotiation. The way I like to think about this is that it's more about seeking parity in a nonparity led world. That's what's happened in this contract. So therefore, we don't believe that there is an irrational component to this at all. It is reasonably rational. We'd also said that we wanted to do this over a longer time period. I mean if you see how we've done it versus how we wanted to do it, I would like to do it over a couple of years. We're doing it over a couple of quarters because it's a slightly older dialogue. It is best to put these things behind us. But I just want to take out the cohesiveness of the situation from your mind saying that this is a surprise, this will be sprung upon us again and again. I think it was rational. There was a reason. Both sides agreed. We distributed a little of the timing. But in the end, we've got it now.

[Devesh Agarwal, analyst]

Can we say that once the pricing is done, the similar-sized AMCs will be in a -- the price differential between the single-sized AMCs will be in a small range, and to that extent, we would not see any further risk and that will be...

[Anuj Kumar, executive]

Thanks. Yes.

[Devesh Agarwal, analyst]

And sir, any more contracts which are coming up for renewal in this year, in FY '26?

[Anuj Kumar, executive]

So nothing major. We do have as a part of rigorous couple of smaller-sized contracts coming up as they do in every year. Probably there are 2, 3 that are coming up in the current year. But we -- as I said last time, all the major contracts have been renewed, and this was something which we have also closed in the last couple of weeks. So you will not see any major repricing or major contract negotiations or major revenues because of new customer contracts that we are negotiating in the current year are other than what obviously we have spoken about the current contract.

[Devesh Agarwal, analyst]

Right, sir. And sir, in terms of new AMCs, I think you see that 4, 5 new AMCs have started operations, and we expect another 4, 5 AMCs to start operation over the next 6 months. Do you think this incremental new AMCs that have come up almost in a number of around 10, will that have a drag on the margins in FY '26 as they scale up the operations? Or they are too small to even ?

[Anuj Kumar, executive]

Yes. Right now, they are too small to create a drag. I think the positive thing is that to have hit operations, 5 mobile heads. So that's 7 new in 1 year. And I think as they all stabilize and move to a few thousand crore of AUM, the collective AUM will be large -- still small in the context of the overall INR 450 lakh crores that we manage. I don't think -- I just look at it as a large positive [indiscernible] that this creates the way for us to scale in the marketplace over the long term. The total cost on these may be, at a company level, 100, 120 people deployed, which is not very significant in terms of the overall size of the company.

[Sesha Ramcharan, executive]

And I'd also like to add that it's not as if we start investing on this, the day they go live, which means for most of these 4, 5 AMCs, the cost that you see in the fourth quarter contains the cost, not only of the online AMCs, but also the going live AMCs. It's not as if we can start the earlier day and make them live. So we start 6 months in advance. So a large part of the cost that you are seeing and in spite of that salary cost is 2 to 3 percentage is that in the base. And obviously, there will be some incremental cost, but it's not going to be material in the overall margin perspective.

[Devesh Agarwal, analyst]

Right, sir. And sir, one last one. In the non-MF side, if you can share what was the margin in FY '25 EBITDA margins? And what are your expectation goods? That will be my last.

[Sesha Ramcharan, executive]

So you will see that there is a mix, right? So you have a profitable -- very profitable KRA, you have a profitable payments, but you also have some growth businesses, which are going to turn the corner in the coming couple of years or a couple of quarters, in some cases, it is our -- which is our point aggregator, CRA, repository, et cetera, the [indiscernible], et cetera. So combined margins, we said is between 10% and 15%, and the last quarter is also coming with a similar number between 10% and 15% of EBITDA. Our expectation is next year, this will go closer to 20% of EBITDA, right? That's the expectation from our side that we will reach 20% EBITDA on the non-mutual fund businesses in the next year, which will obviously have a beneficial impact on the overall company margins.

[Operator]

The next question is from the line of Supratim Datta from AMBIT.

[Supratim Dutta, analyst]

My first question is on the non-asset based revenues, just wanted to understand what would be the split of your MF Central or call center and the paper-based transaction in this revenue? Because this has been growing despite you talking about digital transactions becoming more prevalent. So I wanted to understand how is the mix of revenue here changed versus 2 years to today? And how much of this would be linked to transaction. If you could give some color on that, that would be very helpful.

My second question is on the payment aggregator business. I understand that you have -- you talked about the education institutions that you have come in to. So could you give us a split of your revenues coming from customers now, what would be MF versus what would be your educational institutes there? And how does that -- and how do that play out over the next 2 to 3 years, if you could give some color on that, that also will be very helpful.

And lastly, on the cost bit, I'm not sure whether this has been discussed before. I joined a bit late. So on the employee cost, typically, we have seen escalation this year. The employee cost growth was higher than what typically it has been, and I understand that's because of the new businesses that you have been ramping up. But as I look into FY '26 or '27, how should I think about employee cost? Is there a need for further addition? Or how does that play out as a proportion of your revenues? If you could give some color on that, that would be helpful.

[Sesha Ramcharan, executive]

Sure. I'll just take the questions one after another. One is the non-asset-based revenue split. Let's say, 30 -- almost 1/3 of it will be the transaction revenue. When you say transaction revenue, that is also the paper transaction and some would be digital transaction, but predominantly it is paper transactions revenue.

So -- and you do have an increasing component of things like what you mentioned, which is the MF central and the various other applications that we kind of get a license fee for, for example, the analytics application called MFX or the CRM application or the [indiscernible] application and some analytics, et cetera.

So you are right, from a mix perspective, we do see some increasing contribution from the applications and miscellaneous billing that we do and the value-added services. And you will have -- probably just to take a rough -- if you have INR 200 crores as your non-asset-based billing, around INR 75 crores could be your transaction and your business application could be around INR 35 crores, right?

Your center could be around INR 30 crores, and your -- and your OP will be the last part of it, which is the INR 50-plus crores will be the OP and [indiscernible] would be a couple of crores. That's a broad split. It's not the exact number, but just to give you an idea, that's a broad split of INR 200 crores non-asset-based revenue that you have.

The increase in this is attributable to 2 things. One is the concentrate is growing. It's growing by around 5 to 10 percentage. It's also because application revenue is growing because of the new functionalities that we bring in, the new applications that we give to our AMC store which we build. So both of these are causing the increase in the mix, so to say. But predominantly, it still continues to be the transaction billing that we do up to 1/3 almost is like that, right?

From the second question that you had, I think it was on the cost side. Yes, actually, you will see the first quarter of the coming year or any year for that matter is the year in which predominantly, the appraisal kicks in. Major part of the employee workforce will get an -- have got an increase effective from April 1. So that could suppress the margins by a couple of percentage points. And that's why we kind of say that the quarter 1 has been historically not really the current year. Every year you've taken the past. You have seen a margin of close to 43 percentage -- 42.5 to 43 percentage will be the EBITDA because that will be a onetime -- still not a onetime, but there will be an impact of the annual appraisals that happen.

But we did have a lot of hiring happened last year, right? We have added on a net headcount basis around 750 to 800 people last year. And as you also likely alluded to, a lot of it is because of the ramp-up we are doing in the non-mutual fund businesses. We also invested on talent. We've got new talent out from IoTs and IMs to kind of power our future. We are working on things like cybersecurity, various other cutting-edge technologies, which will require a different skill set. So not only have the number of people increased, the cost per person has also increased from overall hiring perspective.

But this year, we'll be a little more muted. I think we have the building blocks in place. We have built the platform. We have built out a sales force, which is going to the market, which was nonexistent probably 3, 4 years back. So all this has [ taken ] some bit of the profits come up for the last year. But going forward, we feel that there will be stability. Stability in terms of the employee cost, stability in terms of the other costs also. So to have 32 percentage of overall revenue to be -- of 32 percentage currently to be the employee cut would be a good assumption to make, and that's what we're working towards.

Mind you that we will also have some rationalization in manpower going forward because of automation initiatives because of the staggered implementation of the re-architecture, we will have some rationalization in manpower going forward also from the core business. So overall, we do not see an increase in employee costs in the current year from an overall perspective. If anything, we are looking at a small decrease so that you will directly -- see stability in employee cost.

Your other question was on insurance. What was the [indiscernible]

[Supratim Dutta, analyst]

[indiscernible] aggregate -- payment aggregator. So just wanted this [indiscernible] of the [indiscernible] now given that you have -- yes.

[Sesha Ramcharan, executive]

So when we started off, you would understand, it's almost [ 100% ] a few years back of mutual fund and SIPs and related stuff. So we had a process of diversification where we got into first NBFCs. And as Anuj was mentioning, we've got in the education space, we have tied up with a couple of colleges and ERP provider, but it is only serious from education perspective. So overall, it will be a few crores of revenue in a year.

What we have already done is diversified the insurance space also. We have signed up at least 5 new insurance customers. So our -- while it will be more kind of a 55-45 split of MF or non-MF in the current year, going forward, in the next year, we expect it more to be 60-40 kind of a split -- sorry, which is 60% of non-mutual fund revenue and 40% of mutual fund-related SIP revenue for the payment business is what we expect in the current year.

[Supratim Dutta, analyst]

Got it. And one final question. So I just wanted to understand the Jan SIP which has been launched by several MFs, how will the pricing there be differing from regular SIPs?

[Anuj Kumar, executive]

So these products, like you know, the [indiscernible] SIP across the industry and [indiscernible] in the context of 1 -- 1 AMC have been launched. The percent of activity that you would expect hasn't been attained yet. For your purpose, you can think of these as regular equity instruments. We obviously give the industry some remission in our overall charging framework for assets, for KRA and for payments. And for an obvious reason that at that size, where you're collecting only INR 100 or INR 20 a day, the cost of collection, cost of an SMS or e-mail, all those costs add up to prohibitively discourage anyone from scaling these products.

So the industry kind of thought and discussed for almost a year in terms of how we should expand this. And in the end, not just CAMS, but collectively between the RPs, depositories and payment aggregators, we decided that we will give it a leg up. I won't go into specific numbers, but just think of it this way that in the interest of creating this initial scale, we have also contributed to some differential pricing. It's a uniform differential pricing, so it's not that CAMS will be giving any special deal to anyone. But that decision was kind of nudged by SEBI, led by [indiscernible] and has been taken at the industry level.

[Operator]

The next question is from the line of Sarthak Notal from Itaya Capital.

[Unknown Analyst]

Am I audible?

[Anuj Kumar, executive]

Yes, go ahead, go ahead.

[Unknown Analyst]

I guess one thing. As we have told, there's a very high switching cost on this industry, right? So I just want to know why any RPM will shift from KYC to CAMS or CAMS to KYC? This is my first question.

[Anuj Kumar, executive]

Sure. So just given the nature of the business, you know that the liability side operations scope is vast. It creates very strong linkages of both the end investor and the intermediaries to our platforms, to the RTA platforms. There is a very long and onerous recordkeeping work that has to be done. The liabilities which are shared by the RTAs, -- if they have committed a mistake, the mistake may have happened 20 years back. All the digital linkages, the compliance reporting, all of that has to be done in the front office that [indiscernible] for a particular client.

So like in any large operations -- they are very different to either IT services or BPO. As you know, BPO you know that a lot of companies put their entire scope on RFP every 5 or 7 or 10 years. It's very different here. But a [indiscernible] decision is very difficult to take. You would have seen in the last 10 years, any scaled AMC to have taken that decision, 1 or 2 small ones may have taken that decision going to performance categories for the lone reasons, but it's not a very common [indiscernible].

[Unknown Analyst]

Okay. So sir, I just wanted to ask a follow-up question on that. I have asked the question to take in better with the management. They have said that in the last 15 years, 10 of the mutual funds have shifted from CAMS to KYC. So can you throw some light on it?

[Anuj Kumar, executive]

Well, I would say you should do a follow-on and get names from them and then make a phone call to be and then we can see.

[Sesha Ramcharan, executive]

I think there -- I think nothing has happened, the public costs are there for everyone to see. So you can look at it -- the 2 things have shifted from KYC to CAMS. But the other way around, I don't think it has ever happened in the last decade. So yes, as answered, it will be useful for you to kind of reach out to us with specific names so that we can either revert or correct assets.

[Operator]

Sorry to interrupt, it seems like the participant's line has got disconnected. Hello, sir. Am I audible? Hello, sir?

[Anuj Kumar, executive]

Go ahead.

[Operator]

Okay. I'll go with the next question. The next question is from the line of Prayesh Jain from Motilal Oswal.

[Prayesh Jain, analyst]

Just first question is on the mutual fund business. Is there any impact of lesser number of days on the yield in this quarter? Generally, AMCs feel the pinch of it, but do we also see the pinch of it?

[Sesha Ramcharan, executive]

So Prayesh, I think I'd just like to correct a misconception that probably a lot of your colleagues also had and have reached out to me on. So the way we bill the number of days does not determine the revenue. That's very simple. You have an average AUM per month, which is the AUM on a daily basis, we take the average for the month. So it doesn't really matter whether the average is for 28 days or 30 days, you'll just have a final average number. And the rates are applied on a monthly basis. So in respect to whether you have a 28-day or a 31-day month, the revenue for the month will not be impacted by the extra 1 or 2 days. The rates are actually annual based but are applied on a monthly basis, irrespective of whether it's a 28- or a 31-day month. So there will be no change by the fact that the quarter has 2 days more or less to the overall revenue number.

[Prayesh Jain, analyst]

Got that. Secondly, on the CAMSPay business, you've enrolled LIC. And how -- so how when was this? And do you think that a large part of your growth guidance on FY '26 would be -- likely would be a key factor in terms of CAMSPay?

[Anuj Kumar, executive]

So good question. This business was signed up exactly 1 year back in March, April of '24. It is not about premium collection yet. So I just want to clarify. We are not collect -- we don't have an exclusive deal to collect insurance premium yet. These are account authentication services, which is the normal service which you see across the insurance and the asset management board where you verify somebody's CAMSPay account that it is generally held by them. It is not a third-party account. And the branch [indiscernible] has not got shut. So that's a set of services.

Because the digital business is going up, I think a lot of noncheck payments are beginning to happen. So this is that service. So we continue to be in conversations with them to expand. The FY '26 guidance of growth in CAMSPay is not so much LIC. LIC will scale, but I think it's all the components, the large growth in the SIP numbers in the last 1 year, some addition from payment gate plays, some from education. And of course, the last year will be a component, but I would not think that is going to be more than 10% or 15% of the overall growth numbers that have been spoken about.

[Prayesh Jain, analyst]

Right. And with respect to the margins, how should we look about margins in FY '26? You mentioned that their employees -- employee cost would be maintained at about 33% of revenues. That is what you mentioned, right? And OpEx should see some kind of steady growth. On the other hand, non-MF businesses, the profitability should improve. So given this trajectory, should we expect an improvement in EBITDA margins in FY '26 versus FY '25?

[Sesha Ramcharan, executive]

So Prayesh, in normal course that would answer would have been, yes. But as we have guided earlier, there would be some impact of the price that we will see in the course of the year also panning to 50% of the impact that we will see. So our aim is, from a margin perspective, when we ended the year on 46 and next year would probably be a 44 kind of a margin percentage, which is what we are all working for. Obviously, this is predicated on mutual fund growing reasonably, if not equal to current. We know it's not possibly equal to the current year's growth in terms of 30-plus percentage, but there's a reasonable growth in mutual funds and are getting the price impact and increase in non-mutual fund margin and cost control, we feel that 44 percentage EBITDA for the year next year is definitely achievable.

[Prayesh Jain, analyst]

Are you being conservative in terms of giving the guidance because obviously, if you look at the Q4 EBITDA margin where you had an impact of about 50% of that, you've still delivered a 44.9% EBITDA margin, and you're talking about FY '26 EBITDA margin of about 44%. So are you being conservative here in terms of that guidance? Or how should we read this?

[Sesha Ramcharan, executive]

So Prayesh, think of it this way that we are not building all of this on an expectation of a 20% growth. We've had a 20% AUM growth CAGR over the last 9 years. If that happens, then obviously, the numbers can be better. We are expecting that AUMs will be more moderate, will be maybe 11%, 12%. And if AUM growth 11%, 12%, and obviously, revenue growth is 8% to 9%, which has to cushion the incremental impact that's coming and then has to contribute.

In non-MF, we know, even at 25% on a INR 200 crore base, we'll add about INR 50 crores to the revenue, but cannot add 100 crores to the revenue. Non-MF does superlatively well. The 50 absolute equipment can grow to 60% or at best 70%, but it'll never be 100%.

So the way to then think about it is that -- and again, I don't do any arithmetic reconciliation here that if non-MF contributes, let's say, INR 50 crores to INR 60 crores, absolute MF is, let's say, INR 120 crores, INR 130 crores, net of discount is about INR 70, INR 80 crores, a possibility to scale overall group revenue on a base of -- I mean, just remember that 10% absolute revenue growth on a base of [ 1 42 ] -- I mean, [ 14 20, 14 30 ] It's almost [ 1 45 crore. ] So my guess is that a double-digit even low teens number will be difficult to hit.

At the asset growth that we are estimating, if assets grow at 20%, we will have a different story to tell. But right now, I don't think the ground has been built to assume that FY '26 has a 20% asset growth here.

[Prayesh Jain, analyst]

Got that. That's very helpful. Just last question. In terms of CapEx and investments, how should we think about FY '26?

[Sesha Ramcharan, executive]

So there are 2 aspects to it. One is the regular CapEx that goes in the BAU and other is the rearchitecture project that we are running. The first, you will see normal CapEx happening. This time, we had to do some extra CapEx because of some CB requirements of our gap center, et cetera. Next year, we will have another INR 50 crores kind of an addition to IT CapEx and probably INR 110 crores, INR 115 crores to the other CapEx that we have. So -- but from a DR perspective, we will accelerate our spending in the current year, right? Last year was the first year where we had probably 8, 9 months of work [indiscernible] to the initial design part of it. So this year, we will kind of accelerate our spend on rear. The benefits will start flowing in from the end of this year, too. So I expect, overall, from a CapEx perspective, we will spend around INR 100 crores on the overall -- on the rearchitecture part of it, and we'll spend another INR 70 crores on the other CapEx part of it. So this will be a year in which there will be a cash outflow for these 2 things from a CapEx perspective.

[Operator]

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

[Madhukar Ladha, analyst]

Most of my questions have been answered. I want just one clarification. I think you spelled out the non-asset-based MF revenue in different categories. So you said call center, about INR 30 crores; out-of-pocket expense is about INR 50 crores. And then what is the application revenue? And yes, can you just give that split that adds up to about INR 185 crores. That's my first question.

Second question, I think last year, our net sales market share was about 75%. What would that number be for FY '25?

And third question on depreciation. So we see a pretty big jump in depreciation in Q4, right? Would that be our run rate going forward for next year? And given -- let me also just give out the CapEx numbers that INR 100 crores is going into the rearchitecture -- additional INR 65 crores on other CapEx. So would that mean that this depreciation would probably increase even more than that is what I'm guessing. I want have some clarity on that -- my 3 questions. Yes.

[Sesha Ramcharan, executive]

So Madhukar, I will just take your depreciation question first. Yes, as I've said that we have actually spent a lot of money on things like renewal of -- licenses and chat and [indiscernible] center that we have set up as a part of the regulations. The city has mandated that you have a fourth kind of [indiscernible] to products in case there's a ransomware attack, et cetera. So you will see in that -- you have seen a depreciation in the current quarter. This should be the broadly run rate going forward. There is no -- barring some accelerated depreciation that we did for some intangible assets being very conservative, that's probably [ a crore ] of depreciation that we took on the books.

Barring that, everything is probably part of the run rate. Obviously, there are depreciation of -- on the gone live component of re-arch, we'll start kicking in only from the end of next year when the module goes live. So for the first few quarters, you won't see a decrease in depreciation because of that. There is a depreciation because of the additional CapEx that we do, which is around INR 60 crores, INR 65 crores that we expect. That will start flowing in as and when we do the purchase of those particular servers or storage or whatever it is.

So the re-arch part of depreciation, I think, will be more something which will start going into the books for the end of next year rather than the first few quarters because the model will have to go live. Otherwise, I think we are on track to kind of keep the current quarter as the run rate of the depreciation going forward. That is on the depreciation part of it. Can you just -- can you repeat the other question?

[Madhukar Ladha, analyst]

The breakup of the non-asset based revenue or [indiscernible]

[Sesha Ramcharan, executive]

[indiscernible] number, it was around INR 200 crores was the non-asset-based number.

[Madhukar Ladha, analyst]

INR 185 crores, right? Is it a non-asset -- based, INR 185 crores?

[Sesha Ramcharan, executive]

Non-asset-based...

[Madhukar Ladha, analyst]

No, sorry, sorry, sorry. Sorry. INR 195 crores, INR 196 crores.

[Sesha Ramcharan, executive]

Across INR 2,200 crores. Yes, across INR 2,200 crores. So out of which, I kind of -- the transaction revenue is around INR 71 crores. The machine is around INR 34 crores. There is some NFO revenue on the recoverables, which is around -- NFO is around INR 6.5 crores, recoverables is INR 54 crores, and the call center is INR 32 crores. That's the split. Some decimals points here and there will be there. But largely, that has been the trend going forward. It's a small increase in the mix for call center and for business and application over the last few years, which will sustain going forward.

[Madhukar Ladha, analyst]

Understood. So the application and BaaS services are still quite low compared to what we hear for the industry and from competition. So any thoughts around that and -- as to what's preventing us from doing this part of the business?

[Sesha Ramcharan, executive]

So 2 parts to it and answer from an accounting perspective is that some of the application revenue that we do is also built into the AUM pricing. In the large deals, you kind of tend to kind of bundle it as a partner for AUM pricing. And there are a lot of value-added work that we do on our sterling software also, right, which is more to do with the website development and APIs and all those things, which is called as a part of the sterling revenue, which is not a part of this.

But yes, predominantly, we have thought about a lot of these features, right? From a philosophical perspective, for example, we could build for all our transactions in my CAMS. We are probably #3 or #4 in terms of cross sales. But we kind of provide it to a customer that's a value add as increasing our savings in the entire customer ecosystem. And hence, we are not very charged about making it as a commercial model. We kind of are providing value to them. We know that we're [indiscernible] value to the customers. It's one of the value proposition that we advocate, and not necessarily something that we commercially exploit. For [indiscernible], we have let it be like that. Whether we will revisit it in the future is a different question. But so far, we've not -- commercial has not been the first priority when we kind of do value add to our customers.

[Madhukar Ladha, analyst]

Got it. And final was on the net sales market share. So net sales last year, I think for FY '25 was about 75%. And FY '25, what would that number be?

[Sesha Ramcharan, executive]

That number will be in the mid-60s. A lot of that depends upon NFO performance, NFO market share, et cetera, which is in the range of 68 to 70. I think on average, this will be mid-60s, late 60s kind of number.

[Operator]

The next question is from the line of Uday Pai from Investec.

[Uday Pai, analyst]

Just a couple of questions. Firstly, on the AIF side, while you mentioned that we are adding multiple clients, we have crossed 200 clients threshold. But in terms of revenue, the run rate has been pretty much same over the last 5 quarters. So any thoughts over there?

And the second question is on the KRA side. Could you mention the split of the KRA between new SIP revenues on account of new SIP creation and on new demats? Or is it 100% SIP creation only? Those are the 2 questions.

[Anuj Kumar, executive]

Sure. So on AIF, I just want to reinforce that it's a significant, well-established market leadership story. Why is it like that? You've seen the number of wins. And obviously, you are in the marketplace, so you can see where most of the new -- are heading. We've held on despite significantly heightened competition in the last 2 to 3 years with several new players kind of coming and flexing the muscles, including on price, we've held that 50% share of the outsourced market. We are the largest player in GIFT City in excess of 30 commercial customers. We absolutely rule and straddle the digital onboarding market with 200 installations across the domestic market.

The revenue has grown about 17% year-on-year. We would have liked it to be over 20%. Do remember that this is now a much smaller bps yield kind of a market. It's a more fixed price kind of a market that AIF has developed into. But from an overall market perspective, while we don't do stamp duty-only or BMAT-only kind of deals, we don't have a single customer, even if it's a relationship customer, just to report some inflated customer counts because we know those are empty calories, and we don't want to work for being paid INR 500 a year. So we have none of that, not a single contract like that. We believe we've built a very pre-steam portfolio there. And as our automation and delivery continue to go up, you will see a significant scale up build in this market over the coming days.

[Sesha Ramcharan, executive]

I'd just like to add that I don't know why you have the impression that it is static because on a 12-month basis, the AIF revenue has grown 18 percentage. Even on a sequential quarter basis, last time you grew 6 percentage, right, which is not -- just decent numbers, right? It's not bad numbers at all. Year-on-year basis, we have grown 16 percentage on AIF revenue.

So yes, we are making progress. The growth is there. It is significant growth. It's not, by any stretch, a kind of a static kind of revenue number.

[Uday Pai, analyst]

Sure, sir, on the KRA side?

[Sesha Ramcharan, executive]

So the KRA last split that you should take is that from an MF perspective, we'll have around 65% to 70% of revenue will be contributed by the SIPs or the MF. New onboarding, not SIP, new onboarding in the mutual funds. And on a demand of the [indiscernible] working side, we'll have the 30% to 35% of our revenue.

[Anuj Kumar, executive]

Do keep in mind that demat and broking marketplace is 3x the size of the MF market place. It is a number of new investors and new accounts we opened in MF [indiscernible] 2, 3 times are open in the demand and broker. So as an opportunity, it's a much bigger opportunity. From a penetration perspective, we are continuing to penetrate.

[Uday Pai, analyst]

Sure. So just one last question, if I can squeeze in. Is LIC exclusively working with CAMS? Or it has onboarded other repositories as well? And what is the size of potential revenue that you see over there?

[Anuj Kumar, executive]

LIC signed up with CAMS as the first contract over a period of time. So you must have seen at least 1 announcement from a competing depository, but they're signing up with everyone. So they'll sign up with all the 4 depositories. Like I said, in the first year, we expect that LIC will contribute 50 lakhs to 70 lakhs new policies to the industry on a full year basis. On a [ half year ] basis, the number may be smaller. So that's what I can tell you that from a base of gaining 40 lakh to 50 lakh new policies, LIC would easily add about 15 lakh, 20 lakh to that. So they could represent about 20%, 40% of new policies coming in. And obviously, it will be a [indiscernible].

Should we have one last question on the phone?

[Operator]

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

[Sanketh Godha, analyst]

You said that non-MF business EBITDA margins are [indiscernible] looking 10 to 15. And if I do a back-end position, the mutual fund EBITDA margin will come somewhere between 50 to 51 percentage. So -- and you said that [indiscernible] 'can potentially go to 44. So is it fair to say that you are trying to see probably 4% to 5% compression in the mutual fund business largely because of the pressure and muted [indiscernible]? That's the way you are looking at us to play out in '26?

[Sesha Ramcharan, executive]

So I think we said that we do expect, on a year-on-year basis, the yields to compress. I can give you the numbers to be compared to FY '25. I think we will have a 7% yield compression. But that is assuming a very, very moderate increase in AUM, right? So obviously, the AUM growth is much more than you will see a different yield compression number. So yes, from a year-on-year basis from yield compression, we do feel that compared to FY '25, FY '26 will have a close to 7 percentage compression in yields.

[Sanketh Godha, analyst]

Okay. And lastly, a data question, if you can give 2 numbers, your employee count. And second, your number of KRA accounts you have. I think the number was some 1.8 crores. So what is the recent number?

[Sesha Ramcharan, executive]

Around 1.9-plus bands in our KRA business. And what is the second question you asked?

[Sanketh Godha, analyst]

Number of employees.

[Sesha Ramcharan, executive]

Number of employees, around [ 8,000. ]

[Operator]

Thank you. Ladies and gentlemen, that was the last question for the day. I would now like to hand the conference over to management for closing comments.

[Anuj Kumar, executive]

Thank you for your participation in this call and the continued interest that you are showing in CAMS. As always, please feel free to reach out to Anish or Kate or to link anytime in case you have any questions, and we are also available for any clarifications that you may have. Thank you once again, and please continue to be interested in the CAMS' progress.

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