India’s largest securities depository, known for safeguarding investors securities in electronic form, shows mixed financial performance in Q3 FY25. While maintaining strong year-over-year growth with a nearly 30% revenue increase, the company faces quarter-on-quarter headwinds, reporting declines in both revenue and profit margins.
Share Price Movement
The share price of CDSL Limited is down 9.45 percent to Rs. 1,358.35 per share on Monday, a decline from its previous close of Rs. 1,500.25 per share. The market capitalisation now stands at approximately Rs. 28,744 crore as of January 27, 2025.
Business Highlights
CDSL became the first depository to register over 14.65 crore demat accounts by December 31, 2024. In the third quarter of FY 2024-25, around 92 lakh new demat accounts were opened.
Q3 Financial Highlights
In Q3 FY25, the company reported revenue of Rs. 278 crore, down 13.66% QoQ from Rs. 322 crore in Q2 FY25, but up 29.91% YoY from Rs. 214 crore in Q3 FY24. Profit stood at Rs. 130 crore, declining 19.75% QoQ from Rs. 162 crore in Q2 FY25, yet rising 21.50% YoY from Rs. 107 crore in Q3 FY24.
The company’s OPM declined from 61% to 58% YoY. It posted TTM sales growth of 58% and a profit growth of 57%, while the stock delivered a 5-year CAGR of 70%.
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Competitors
The National Securities Depository Limited (NSDL) is the only competitor of Central Depository Services Limited (CDSL). Both are central securities depositories in India that offer services for holding and settling securities. CDSL has a P/E of 56.85.
Market Outlook
The depository industry in India has seen impressive growth, with demat accounts rising by 32% from FY23 to FY24, reaching 15.14 crore accounts. CDSL, the dominant player, holds 76% market share and continues to grow, reflecting increased investor participation and trust.
This surge in demat accounts indicates a broader trend towards financial inclusion, driven by simpler processes and digital innovation. CDSL’s robust infrastructure and security practices support the industry’s expansion, with assets worth Rs. 64 lakh crore as of March 2024.
Written By Fazal Ul Vahab C H
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