CMS Info Systems Ltd Q4 FY26 Earnings Analysis

- FY 2027 overall revenue target is INR 2,800 to 2,900 crores. - Services revenue targeted at INR 2,700 to 2,800 crores for FY 2027. - Q4 and FY 2027 expected to be strong after two quarters of underperformance. - Retail and currency logistics business expected to grow around 12% next year. - Technology and payments business (including Hawkai and cards) projected to grow about 20%. - Managed services & technology revenue grew 18% quarter-on-quarter in Q3. - ATM cash management contracts expected to ramp up aggressively, targeting 74,000 to 75,000 ATMs by March or April. - Order book execution for FY 2027 is strong, with around INR 1,600 crore high-quality orders. - Growth capex linked to revenue visibility in FY 2027. - Hawkai business growing rapidly, projected to double from INR 100 crores to INR 200 crores between FY 2024 and FY 2026.

- FY 2027 revenue target: INR 2,800 to 2,900 crores overall, with services revenue of INR 2,700 to 2,800 crores. - EBITDA margin guidance for FY 2027: 25% to 26%, improved from recent quarters' lower margins. - Expectation of margin recovery driven by bottoming out of cash management segment and growth in managed services and technology. - Q3 services revenue grew 4% QoQ; Management aims to reach INR 650 crores services run rate in Q4, implying about INR 2,600 crores services revenue annualized. - Business EBITDA grew 9% QoQ in Q3; EBITDA margins expanded by 160 bps from Q2 to Q3. - Profit after tax impacted by one-off labor code provision; excluding exceptional items, PBT showing sequential growth. - Growth Capex of INR 275 crores in current year to support order book execution and revenue visibility for FY 2027. - Management confident of returning to growth and margin improvement following two disappointing quarters.

- FY 2026 capex guidance is INR 300-325 crores; YTD capex of INR 275 crores spent, primarily growth capex linked to execution of ~INR 1,600 crores order book. - Capex is growth-oriented, not maintenance, driving revenue visibility for FY 2027. - Recently completed accretive acquisition of Securens for INR 70 crores. - Signed term sheet to acquire an ATM management solutions business valued at INR 100-125 crores, expected to close by March end; this will drive market consolidation and add value. - Active M&A pipeline with focus on accretive deals and synergistic expansion, particularly in retail and payment tech infrastructure sectors. - Capital allocation priority: fund organic growth first, then pursue accretive M&A, finally return surplus capital to shareholders. - Board evaluating buybacks in light of capital needs and regulatory changes; any decision expected by year-end.

- No specific current fundraising through debt or equity was mentioned. - Management acknowledges capital needs for both organic and inorganic growth. - There is an active M&A pipeline requiring growth capital. - Returning capital to shareholders via dividends or buybacks is considered only after growth capital needs are met. - The Board will evaluate capital allocation decisions, including any buybacks, closer to the end of the fiscal year based on capital needs. - No definitive decision on buybacks or capital return has been made; it's contingent on excess capital beyond business growth requirements.

- CMS Info Systems has won an order book worth INR 1,600 crores in FY 2026. - The order book is a mix of integrated contracts in Managed Services and Hawkai technology, especially for large complex branch RFP rollouts. - SBI outsourcing involves about 10,000 ATMs; CMS was awarded around 5,000 ATMs as L1 participant after a revised RFP process. - The total contracted value opportunity from the ATM RFP pipeline in FY 2027 is around INR 2,000 crores. - Current pipeline includes approximately 6,000 to 8,000 ATM units in various stages of procurement. - Growth capex linked to execution of the INR 1,600 crores order book. - Order wins in Managed Services and technology solutions contribute to revenue visibility for FY 2027.