The brokerage believes that with its dominant position in the depository business, CDSL is poised for growth, capitalizing on the rising activity in the Indian capital markets.
However, continued reduction in turnover volumes, might weigh on CDSL’s earnings going forward, according to JM Financial, who wrote in its note that the Average Daily Turnover across BSE and NSE is down 18% year-on-year during the September quarter.
CDSL’s management believes that the integration with LIC remains on track and is likely to be completed this month itself. JM Financial calls this a big opportunity and expects this opportunity to lead to an increased market share for CDSL.JM Financial values CDSL at 40 times price-to-earnings on a one-year forward basis, which, according to the brokerage is expensive, and hence the downgrade in rating.
For the September quarter, CDSL reported a 23.2% growth in its revenue on a sequential basis to ₹319 crore, while its net profit grew by 36.7% from the June quarter to ₹139.93 crore.
Revenue from both Data Entry & Storage business and Depository Activity business increased over 20% from the previous quarter.
Margins also saw an expansion of over 500 basis points on a quarter-on-quarter basis.
Shares of CDSL are currently trading 2.3% lower on Tuesday at ₹1,556. The stock has underperformed in 2025, having declined 14% so far on a year-to-date basis.
