Central Depository Services (India) Limited (CDSL), a key player in India's financial infrastructure, has released its financial results for the quarter ended September 2025, revealing a mixed performance with year-on-year declines but significant sequential improvements.

Financial Performance Highlights

Key Takeaways

• Yearly Performance: CDSL experienced a 13.6% year-on-year decline in net profit, dropping from ₹162.02 crore to ₹140.21 crore.
• Sequential Growth: Despite the yearly decline, the company showed robust quarter-on-quarter growth with net profit surging 37% from ₹102.37 crore in Q1 FY26.
• Revenue: Revenue from operations saw a marginal decrease of 1% year-on-year, settling at ₹318.89 crore.
• Expenses: Total expenses increased to ₹157.41 crore, up from ₹134.41 crore in the previous year, representing a 17.1% rise.
• Profitability: The EBIT margin stood at 50.7%, down 765 basis points year-on-year but up 612 basis points quarter-on-quarter.

Analyst Perspective

Following the results, Nuvama, a brokerage firm, has maintained its Buy rating on CDSL stock and raised the target price to ₹1,840 from ₹1,780. The brokerage's optimism is driven by:

1. A substantial 195.2% quarter-on-quarter increase in IPO and corporate action charges.
2. A 48.4% rise in online data charges.

Nuvama's valuation of CDSL stock is based on a P/E multiple of 61.2x for FY27 and 50.8x for FY28, reflecting confidence in the company's future growth prospects.

Conclusion

While CDSL faces challenges in year-on-year comparisons, its strong sequential performance and the positive outlook from analysts suggest resilience in its business model. Investors and market watchers will likely keep a close eye on how the company leverages its improved quarter-on-quarter performance to address the yearly decline in the coming quarters.

CDSL (Central Depository Services (India) Limited), a leading securities depository in India, has reported a decline in its financial performance for the second quarter compared to the same period last year.

Financial Performance

CDSL's financial data reveals a mixed performance across various metrics:

Key Observations

Revenue Decline

CDSL experienced a slight decrease in revenue, which fell to Rs 3.18 billion from Rs 3.22 billion in the same quarter of the previous year.

EBITDA Reduction

The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) decreased to Rs 1.76 billion from Rs 2.00 billion year-over-year, indicating a significant drop in operational profitability.

Margin Contraction

The EBITDA margin contracted to 55.29% from 62.18% in the corresponding quarter of the previous year, suggesting challenges in maintaining profitability levels.

Market Position

Despite the quarterly setback, CDSL maintains its position as a key player in India's securities depository landscape. The company's ability to generate substantial revenue demonstrates its market resilience.

Looking Ahead

While the decline in revenue and EBITDA may be a concern for stakeholders, it's important to note that quarterly results can be influenced by various factors. Investors and analysts will likely be watching closely to see if CDSL can improve its operational efficiency in the coming quarters.

As the financial markets continue to evolve, CDSL's role in providing depository services remains crucial. The company's future performance may depend on its ability to adapt to market changes, manage expenses effectively, and capitalize on growth opportunities in the Indian financial sector.