Synopsis:
NSDL and CDSL delivered contrasting Q2 results, with NSDL showing stronger YoY growth while CDSL rebounded to QoQ. Brokerages remain neutral on both, citing high valuations, steady duopoly benefits, and market-linked revenue sensitivity.
India’s depository market is dominated by two giants, which are National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). While both enable electronic storage and transfer of securities, their business models and investor bases differ markedly.
NSDL primarily serves institutional clients and commands a dominant share of demat custody value, reflecting its focus on high-value accounts, mutual funds, and government projects. On the other hand, CDSL leads in the number of demat accounts, catering mainly to retail investors and benefiting from fintech-driven retail participation.
Price performance
With market capitalization of Rs. 22,730 cr, the shares of National Securities Depository Ltd are closed at Rs. 1,136.50 per share, from its previous close of Rs. 1,153.95 per share.
The stock was listed on August 6, 2025, on both the BSE and NSE. The shares debuted at Rs. 880, a 10% premium over the final issue price of Rs. 800 per share. Since then, the stock has delivered a 21% return, and over the past month it has slipped by 3%.
Meanwhile, With market capitalization of Rs. 33,649 cr, the shares of Central Depository Services (India) Ltd are closed at Rs. 1,610 per share, from its previous close of Rs. 1,640.10 per share.
The shares got listed on NSE on Jun 30, 2017, since then the stock has surged 559% over the past five years, delivered a 4% return in the last year, and flat over the past month.
Q2FY26 Results
NSDL reported steady year-on-year growth in Q2 FY26, with revenue rising about 12% to Rs. 400 crore. EBITDA increased around 12.4% to Rs. 127 crore, while net profit grew approximately 14.3% to Rs. 110 crore. EPS also improved about 14.8% to Rs. 5.52, indicating consistent profitability expansion.
On a sequential basis, the company delivered strong momentum. Revenue increased about 28.2% from Rs. 312 crore, while EBITDA rose around 34% from Rs. 94.8 crore. Net profit was up approximately 22.8% compared to last quarter, and EPS improved about 23.2%, reflecting robust quarter-on-quarter operational strength.
Whereas CDSL’s Q2 FY26 results were slightly weaker compared to last year. Revenue declined about 0.9% to Rs. 319 crore, while EBITDA fell around 12% to Rs. 176 crore. Net profit dropped approximately 13.6% to Rs. 140 crore, and EPS decreased about 13.4% to Rs. 6.71, indicating a soft year-on-year performance.
Sequentially, the company delivered strong growth. Revenue increased around 23.2% from Rs. 259 crore, and EBITDA rose about 35.4% from Rs. 130 crore. Net profit climbed approximately 37.3%, while EPS improved around 36.7%, reflecting a robust rebound on a quarter-on-quarter basis.
Key comparison
As of FY25, NSDL recorded a sharp rise in new investors, adding 3.68 million during the year. It also leads significantly in scale, with 4,759 billion securities held in demat form and a total securities value of Rs. 464 trillion. Additionally, NSDL has 10.47 lakh non-resident individual and other category investor accounts, reflecting its dominance in institutional participation.
In comparison, CDSL added 37.38 million new investors in FY25, showcasing its strong retail focus and rapid account growth. However, it manages a smaller asset base, with 836 billion securities in demat form valued at Rs. 71 trillion. CDSL also has 2.17 lakh investor accounts from categories other than resident individuals, much lower than NSDL.
Dividend
For the second quarter of FY26, National Securities Depository Limited (NSDL) made a dividend announcement of Rs. 2 per share, which is its very first dividend going back to when it became a listed company. In addition to this, NSDL paid Rs. 18.3 crore in the form of a dividend to its subsidiary, NSDL Database Management Limited (NDML), in the same quarter.
Central Depository Services (India) Limited (CDSL) had a dividend per share of Rs. 12.50 which was four times more than that of NSDL for the quarter ended September 2025.
Brokerages Outlook
ICICI Securities has given NSDL a Hold rating with a target price of Rs. 1,170, highlighting its strong capital-light business model, high share of recurring revenue, and position in a duopoly market.
The brokerage notes NSDL’s premium valuations, driven by long-term compounding potential and market-share gains, while new management and digital initiatives add to its strengths. However, overall market momentum remains the key factor influencing performance.
Motilal Oswal on NSDL, the brokerage reiterated its Neutral rating with a target price of Rs. 1,270, implying a 10% upside from current levels. It expects the company to post steady growth in revenue, EBITDA, and profit over the next three years.
Motilal Oswal noted that expanding custody fee income, greater involvement from banks, and the rising shift toward digital record-keeping solutions are likely to support NSDL’s business momentum.
Meanwhile ICICI Securities upgraded CDSL to HOLD (from Reduce) and raised its target price to Rs. 1,500, which implies a 8% downside from current levels valuing the company at 40 times FY28E core EPS of Rs. 34.4. The brokerage expects strong growth ahead, projecting FY25–28 revenue, EBITDA, and PAT CAGRs of 16.2%, 18.4%, and 17.3%, supported by rising demat activity, lower regulatory risks, and operating leverage.
While the firm highlights CDSL’s solid duopoly positioning and growth potential in areas like the insurance depository business, it also notes that transaction-driven and IPO-related revenues remain market-linked. The upgrade is driven by improved Q2 performance and a rollover to FY28 estimates.
Motilal maintained its Neutral stance on CDSL, assigning a Rs. 1,520 target price, which implies a 7% downside from current levels. According to its report, CDSL continues to gain from consistent growth in new demat accounts and the rising number of unlisted companies onboarding its platform.
Written by Manideep Appana
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