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📊 CDSL Q1 FY26 Results: Marginal Growth in Revenue, Digital Strategy Intact 🧾🔍

Lesson 174/175 | Study Time: 10 Min

Course: Quarterly Result Updates & Analysis

📊 CDSL Q1 FY26 Results: Marginal Growth in Revenue, Digital Strategy Intact 🧾🔍

📌 CMP: ₹1,511 | Sector: Capital Market Infrastructure

Central Depository Services (India) Ltd (CDSL) posted a flattish topline in Q1 FY26 while maintaining its strategic thrust on digital infrastructure. While operational metrics improved sequentially, YoY profit declined due to higher base and lower IPO-linked revenues.

🔍 1. Management Commentary & Key Strategic Updates

🎯 Highlights

Total BO accounts crossed 15.86 crore
₹39.6 lakh crore in demat custody — new record
Over 1.05 lakh ISINs active as of June 2025

🚀 Strategic Developments

Direct pay-out of securities introduced
Investor app upgraded with proxy advisory integration
Investor education platform launched in 12 languages

🏆 Awards & Recognition

Global Custodian Asia: Innovation in Market Infrastructure
CFO of the Year – Asia 2024
Financial Express CFO Awards 2025

📈 2. Consolidated Financial Analysis

Metric	Q1 FY26	Q4 FY25	Q1 FY25	YoY
Revenue (₹ Cr)	295.2	256.0	287.0	+3%
Net Profit (₹ Cr)	102.4	100.4	134.2	-24%
EBITDA (₹ Cr)	231.0	210.0	144.0	+60%
PAT Margin (%)	35%	39%	47%	↓

💡 Sequential growth driven by higher core activity; YoY dip due to normalized IPO-related income and higher expenses.

💰 3. Profitability & Valuation Metrics

Metric	Q1 FY26 (TTM)
ROE	~51%
ROCE	~63%
EPS	₹4.90
P/E (TTM, CMP ₹1,511)	~64x

📌 CDSL trades at a premium multiple reflecting its monopoly, asset-light model, and high profitability.

🏢 4. Key Operating Metrics – Industry KPIs

Indicator	Q1 FY26	YoY Change
BO Accounts	15.86 Cr	↑ from 14.5 Cr
Demat Custody Value	₹39.6 L Cr	↑ from ₹24.8 L Cr
ISINs Registered	1.05 Lakh	↑ 33% YoY
Net A/c Additions	~57 lakh	↓ vs Q1 FY25

🧮 Growth in demat accounts and instruments indicates sustained financial inclusion and capital market penetration.

📊 5. FY26 Growth Outlook

Parameter	FY25 Growth	Q1 FY26 (Ann.)	FY26 Outlook
Sales Growth	33%	~3%	10%
PAT Margin	49%	35%	39.4%
Profit Growth	25%	~30%	-12%

📌 Growth moderated from the pandemic-era highs, but long-term tailwinds remain intact.

🔭 6. Outlook – Near Term & Long Term

📅 Near-Term View (1–2 Quarters)

Volatility in IPO cycles could impact short-term revenue
BO account additions remain healthy
Expect margin volatility due to operating leverage

📈 Long-Term View (FY26–FY30)

Rising investor participation in India
Regulatory digital push by SEBI and govt
Expansion into allied services (e-KYC, e-Nomination, eAGM, Proxy Voting)

✅ 7. Analyst Summary for Long-Term Investors

👍 Positives:

Digital leadership in capital market infra
High-margin, cash-generative business
Monopoly-like status in demat account servicing

⚠️ Risks:

Regulatory overhang from Anugrah arbitration case
High dependency on capital market activity
Rich valuation (~77x P/E) could limit upside in near term

🎯 Rating View: Hold / Add on Dips
For long-term investors aligned with India’s capital markets growth.

📜 8. Disclosure

This analysis is provided solely for informational purposes and does not constitute investment advice. Investors should perform their own due diligence before making investment decisions.

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Piyush Patel

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