CMS Info Systems eyes buys in fintech, financial inclusion spaces

While scanning for inorganic growth opportunities, the company is also incubating some businesses like collections and logistics services for bullion

CMS Info Systems Ltd, an ATM services and cash management player, is looking at acquisitions in the fintech and financial inclusion spaces.

It has pegged its annual revenue growth at 17-19 per cent worth Rs 2,500-2,700 crore for the next financial year (FY25).

While scanning for inorganic growth opportunities, it is also incubating some businesses like collections and logistics services for bullion.

 At present, pilot projects are underway, Rajiv Kaul, its executive vice-chairman and chief executive, told Business Standard.

According to the company, consolidation in various business segments would provide merger and acquisition (M&A) opportunities.

It has identified inorganic growth as one of the four drivers in the medium term.

The company has completed six mergers and acquisition deals involving an outlay of Rs 250 crore, according to analysts’ presentation.

Some of its acquisitions include the ATM business of Logicash Solutions in 2020 and the doorstep banking business of Checkmate Services Private Ltd.

Rating agency ICRA, in a recent credit report on the company, said the strong resource position – sizable cash and liquid investments – on the balance sheet would help fund the inorganic growth via acquisitions.

The company’s liquidity position is supported by healthy internal accrual generation, cash and investments of Rs 443 crore as of September 30, 2023, it added.

Its main revenue streams are cash management and managed services. The cash segment includes ATM cash management, retail cash management, and cash in transit. The managed services include banking automation, brown label ATM, software solutions, and remote monitoring technology solutions.

The chief executive, in an analysts’ call, said business momentum is backed by higher outsourcing and growth in retailisation, led by formalisation.

The company bagged orders worth Rs 600 crore this quarter and cumulative orders worth Rs 1,250 crore in the current financial year in managed services and technology solution business.

It had won new orders worth Rs 950 crore in FY23. The total order book has grown to Rs 4,400 crore.

The solutions and technology automation capabilities are helping to forge deeper enterprise relationships.

Keeping in mind the order book and its execution, the company aims to have total revenues in the range of Rs 2,250-2,300 crore for FY24, he said.