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CDSL's financial results for Q3 FY25:
Key Insights and Highlights 🌟
Operating Income Growth: CDSL has shown a steady increase in operating income from Q3 FY24 (₹215 crore) to Q3 FY25 (₹278 crore). This represents a growth of approximately 29.3% year-over-year. 📈 Till H1_fy25 we saw the growth of 56%, current 29.3 % growth will make the F_fy25 estimate near to 35%. This will be the landmark year for CDSL crossing 1000 Cr Revenue.
Profit Growth: Net profit increased from ₹108 crore in Q3 FY24 to ₹130 crore in Q3 FY25, marking a 20.4% growth year-over-year. 💹 Till H1_fy25 we saw the Profit growth of 63% which includes the one time dividend income in Q2 of around 48 Cr, current 20.4 % growth will make the F_fy25 estimate near to 26%. This might be the landmark year as they may cross 500 Cr Profits this year.
Segment-Wise Share and Growth:
27% revenue comes from Annual Issuer Income which is from companies while following 20% 20% income comes from Transaction charges and IPO income.
Mainly operates in the Depository Services segment, showing consistent revenue and profitability improvement. 🔍
New initiatives like Multilingual eCAS and a focus on financial literacy campaigns have likely contributed to broadening service uptake and revenue streams. 🌐
Operating Metrics 📊
BO Accounts Growth: There was significant growth in the number of Beneficial Owner (BO) accounts, from 14.65 crore in Q3 FY25 compared to 13.73 crore in Q2 FY25. 📈 We are seeing near to 1 Cr new BO accounts addition every month due to large increased retail participation in stock market. Do remember that this (Transaction cost from accounts) is their 2nd largest income source for CDSL.
Number of Issuers Growth: Issuers increased to 91,593 in Q3 FY25 from 85,396 in Q2 FY25, indicating a strong growth trajectory in client base. 🚀. Do remember that Issuers is the top income source for CDSL.
Profitability 💸
Profit Margin: The profit margin for Q3 FY25 is 46.8% vs. Q3 FY24 which was 50.2%. Down by 3.6%. 📊
Other Key Performance Indicators (KPIs) 🔑
DEMAT Custody: There was a significant increase in the value of DEMAT custody reaching 75 Lakh Cr, indicating a higher asset under custody from 58 Lakh Cr Last year which could correlate with increased revenue from custodial services. 🔐
Innovative Services: The launch of various digital initiatives like eNOMINATION, eKYC, and DLT for bond lifecycle management points towards an investment in technology driving operational efficiency and customer satisfaction. 🌍
Valuation and Market Outlook 🏦
Valuation at Current Market Price (CMP) of ₹1504: Based on the Trail EPS including Q3 data is 27 and Trail PE of 57. Adding the growth metrics for F_EPS we may see 25 and F_PE at 60, CDSL appears to be maintaining a robust financial position but still valuation near 30 should be fair value. 💰
Near-Term and Long-Term Outlook: The company’s continued focus on innovation, expansion in services, and strong growth in user base provide a positive outlook. Regulatory changes favoring digital financial services and increased market participation are likely beneficial. 📅
This analysis indicates a strong performance by CDSL in Q3 FY25, with significant growth in key financial and operational metrics, suggesting a solid footing for future growth and investment attractiveness.
