Cuscal (CCL) - Strong momentum heading into FY27

Cuscal provides payment processing services and regulated data-related products for financial and consumer-centric institutions in Australia. Cuscal was formerly known as Credit Union Services Corporation and changed its name to Cuscal in December 2005. The company was founded in 1977, listed on the ASX in November 2024, and is based in Sydney.

‍

The share price of Cuscal has been supported by upgraded earnings momentum, aided by the two strategically important acquisitions of Indue and Paymark. In addition, the FY26 price-to-earnings (P/E) multiple that investors have been willing to apply to Cuscal’s earnings has risen 21x from 11x at the time of the IPO to 21x currently. We see a forward P/E multiple of 18–20x as appropriate,given Cuscal’s strong defensive earnings growth outlook and B2B infrastructure positioning in the payments industry. We expect FY26 results to beat market expectations, with net operating income (NOI) boosted by ongoing solid transaction volume growth and strong client deposit balances driving net interest income. Company guidance is for “mid-teens” underlying net profit growth in FY26, with Ord Minnett estimating growth of 16.8%.

‍

The FY27 result will be underwritten by the contributions from Indue & Paymark, with further growth into FY29–30 as Cuscal banks the cost savings and other synergies from the acquisitions, and the outlook supports expectations for sustainable underlying net profit growth of 15–20% per annum. We reiterate our Buy recommendation on Cuscal and our target price of $5.45.