Central Depository Services (India) Ltd
Central Depository Services (India) Ltd
Financial Services F&OCentral Depository Services Limited is a Market Infrastructure Institution (MII), part of the capital market structure, providing services to all market participants - exchanges, clearing corporations, depository participants (DPs), issuers and investors. It is a facilitator for holding of securities in the dematerialised form and an enabler for securities transactions. [1]
CDSL is a high-quality monopoly business with 29% 3-year ROE and 27% sales CAGR over 5 years, but the stock trades at 62x PE and 14.4x book value after a -19% correction in the last year. At current valuations, the risk-reward is balanced and warrants patience for a better entry point.
Key Fundamentals
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Key Insights
Strengths
5- Company has reduced debt.
- Company is almost debt free.
- Company has a good return on equity (ROE) track record: 3 Years ROE 29.2%
- Company has been maintaining a healthy dividend payout of 54.3%
- Company's median sales growth is 23.7% of last 10 years
Weaknesses
4- Stock is trading at 14.2 times its book value
- Promoter holding is low: 15.0%
- Promoter holding has decreased over last 3 years: -5.00%
- Working capital days have increased from 40.2 days to 200 days
Growth Rate
AI Analysis — Bull vs Bear
anthropic claude-opus-4.6 3d agoCDSL is a high-quality monopoly business with 29% 3-year ROE and 27% sales CAGR over 5 years, but the stock trades at 62x PE and 14.4x book value after a -19% correction in the last year. At current valuations, the risk-reward is balanced and warrants patience for a better entry point.
- Dominant market infrastructure institution with 3-year ROE of 29%, indicating exceptional capital efficiency
- Compounded sales growth of 27% over 5 years reflects strong secular tailwinds from demat account penetration
- Virtually debt-free balance sheet provides financial resilience and optionality during market downturns
- Healthy dividend payout ratio of 54.3% demonstrates shareholder-friendly capital allocation with 0.93% current yield
- Median sales growth of 23.7% over 10 years shows consistency of business momentum across market cycles
- Compounded profit growth of 18% over 5 years with minimal capital expenditure requirements due to asset-light model
- Market cap of Rs 28,274 crore supported by long-term stock CAGR of 38% over 3 years, reflecting re-rating potential of the platform business
- Stock trades at 62x PE, significantly above the financial services sector median, leaving limited margin of safety
- Price-to-book of 14.4x is extremely elevated and prices in years of future growth already
- TTM profit has declined 13% year-over-year, indicating near-term earnings pressure from slower capital market activity
- TTM sales growth decelerated sharply to just 6%, down from 27% 3-year CAGR, signaling potential growth fatigue
- Promoter holding is low at 15.0% and has decreased by 5 percentage points over 3 years, raising governance concerns
- Working capital days have deteriorated from 40.2 days to 200 days, indicating potential cash conversion inefficiency
- Stock has corrected -19% over the past 1 year, and analyst consensus shows 30.77% sell ratings from 13 analysts suggesting further downside risk
- Only 46% of analysts rate it a buy with 4 out of 13 analysts recommending sell, indicating divided Street opinion
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
anthropic claude-opus-4.6 1d ago- SEBI approves two new EDs May 26
SEBI approved appointments of Amit Mahajan (Critical Operations) and Nayana Ovalekar (Regulatory Compliance) as Executive Directors, strengthening CDSL's governance framework in line with MII norms.
- Ovalekar joins as ED Vertical 2 Jun 19
Nayana Ovalekar formally appointed as Executive Director for Vertical 2 (Regulatory, Compliance, Risk Management) for a five-year term effective June 19, 2026.
- ₹1 crore stake in Sahamati SRO Jun 10
CDSL invested ₹1 crore for a 2% stake in Sahamati Foundation, an RBI-recognised self-regulatory organisation for the Account Aggregator ecosystem.
- Analyst meets with global funds Jun 17
CDSL scheduled virtual one-on-one meetings with Citadel LLC and Millennium Partners on June 23, 2026, with no UPSI to be shared.
TL;DR: CDSL is strengthening its leadership and governance structure with SEBI-approved executive director appointments across critical operations and regulatory verticals. The ₹1 crore Sahamati investment signals modest exploration of the Account Aggregator ecosystem. No material headwinds are visible in recent news flow. The trend is stable with governance upgrades positioning the company well for rising market volumes and digitisation demands.
Quarterly Results
| Mar 2023 | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 125 | 150 | 207 | 214 | 241 | 257 | 322 | 278 | 224 | 259 | 319 | 304 | 263 |
| Expenses | 56 | 70 | 79 | 84 | 93 | 103 | 122 | 117 | 115 | 129 | 143 | 145 | 147 |
| Operating Profit | 68 | 80 | 128 | 130 | 148 | 154 | 200 | 161 | 109 | 130 | 176 | 160 | 116 |
| OPM % | 55% | 53% | 62% | 61% | 61% | 60% | 62% | 58% | 49% | 50% | 55% | 52% | 44% |
| Other Income | 19 | 24 | 23 | 21 | 29 | 30 | 37 | 21 | 32 | 36 | 22 | 29 | 6 |
| Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Depreciation | 5 | 6 | 6 | 7 | 8 | 10 | 12 | 13 | 14 | 15 | 16 | 17 | 18 |
| PBT | 82 | 98 | 145 | 145 | 168 | 175 | 225 | 168 | 127 | 151 | 183 | 172 | 103 |
| Tax % | 23% | 25% | 25% | 26% | 23% | 23% | 28% | 23% | 21% | 32% | 23% | 23% | 23% |
| Net Profit | 63 | 74 | 109 | 107 | 129 | 134 | 162 | 130 | 100 | 102 | 140 | 133 | 80 |
| EPS in Rs | 3.02 | 3.52 | 5.21 | 5.14 | 6.18 | 6.42 | 7.75 | 6.22 | 4.8 | 4.9 | 6.71 | 6.38 | 3.84 |
Profit & Loss
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 105 | 123 | 146 | 188 | 196 | 225 | 344 | 551 | 555 | 812 | 1,082 | 1,145 |
| Expenses | 60 | 59 | 67 | 77 | 87 | 136 | 132 | 186 | 236 | 324 | 457 | 563 |
| Operating Profit | 45 | 64 | 79 | 110 | 109 | 89 | 212 | 365 | 319 | 488 | 625 | 582 |
| OPM % | 43% | 52% | 54% | 59% | 56% | 40% | 62% | 66% | 57% | 60% | 58% | 51% |
| Other Income | 23 | 72 | 41 | 38 | 49 | 59 | 57 | 55 | 66 | 95 | 119 | 94 |
| Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Depreciation | 6 | 4 | 4 | 7 | 10 | 12 | 9 | 11 | 19 | 27 | 49 | 66 |
| PBT | 63 | 131 | 117 | 141 | 148 | 136 | 260 | 409 | 365 | 556 | 695 | 609 |
| Tax % | 31% | 31% | 26% | 27% | 23% | 22% | 22% | 24% | 24% | 25% | 24% | 25% |
| Net Profit | 43 | 91 | 87 | 104 | 115 | 107 | 201 | 312 | 276 | 420 | 526 | 455 |
| EPS in Rs | 2.09 | 4.35 | 4.1 | 4.94 | 5.43 | 5.08 | 9.59 | 14.89 | 13.2 | 20.05 | 25.2 | 21.82 |
| Div. Payout % | 53% | 29% | 37% | 35% | 37% | 44% | 47% | 50% | 61% | 55% | 50% | 58% |
Balance Sheet
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity Capital | 104 | 104 | 104 | 104 | 104 | 104 | 104 | 104 | 104 | 104 | 209 | 209 |
| Reserves | 265 | 375 | 429 | 494 | 564 | 619 | 773 | 988 | 1,109 | 1,359 | 1,551 | 1,751 |
| Borrowings | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2 | 1 | 3 | 2 |
| Other Liabilities | 122 | 74 | 73 | 92 | 116 | 138 | 206 | 232 | 241 | 317 | 399 | 457 |
| Total Liabilities | 491 | 553 | 606 | 690 | 784 | 862 | 1,084 | 1,326 | 1,457 | 1,781 | 2,162 | 2,419 |
| Fixed Assets | 7 | 4 | 5 | 76 | 75 | 74 | 73 | 106 | 125 | 342 | 446 | 502 |
| CWIP | 0 | 0 | 0 | 0 | 0 | 0 | 23 | 4 | 174 | 4 | 7 | 6 |
| Investments | 389 | 457 | 503 | 521 | 593 | 665 | 709 | 925 | 937 | 1,149 | 1,351 | 1,487 |
| Other Assets | 95 | 92 | 98 | 93 | 115 | 123 | 278 | 290 | 221 | 287 | 357 | 424 |
| Total Assets | 491 | 553 | 606 | 690 | 784 | 862 | 1,084 | 1,326 | 1,457 | 1,781 | 2,162 | 2,419 |
Cash Flow
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating | 43 | 28 | 43 | 79 | 86 | 82 | 193 | 283 | 249 | 386 | 543 | 467 |
| Investing | -19 | 0 | 18 | -67 | -67 | -33 | -107 | -146 | -126 | -249 | -298 | -185 |
| Financing | -23 | -28 | -31 | -38 | -20 | -51 | -47 | -94 | -158 | -169 | -231 | -262 |
| Net Cash Flow | 0 | 1 | 29 | -26 | -1 | -1 | 38 | 44 | -35 | -32 | 14 | 19 |
| Free Cash Flow | 40 | 27 | 37 | 3 | 74 | 73 | 175 | 258 | 44 | 313 | 387 | 346 |
| CFO/OP | 140 | 102 | 94 | 107 | 110 | 119 | 118 | 105 | 107 | 102 | 110 | 107 |
Ratios
| Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debtor Days | 24 | 39 | 33 | 37 | 36 | 42 | 40 | 30 | 25 | 30 | 18 | 21 |
| Cash Conversion Cycle | 24 | 39 | 33 | 37 | 36 | 42 | 40 | 30 | 25 | 30 | 18 | 21 |
| Working Capital Days | -253 | -100 | -79 | -92 | -79 | -85 | -110 | -75 | -45 | -22 | -57 | 200 |
| ROCE % | 14% | 22% | 22% | 24% | 22% | 18% | 31% | 40% | 30% | 40% | 42% | 32% |
Documents
Frequently Asked Questions about Central Depository Services (India) Ltd
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Company Information
Central Depository Services Limited is a Market Infrastructure Institution (MII), part of the capital market structure, providing services to all market participants - exchanges, clearing corporations, depository participants (DPs), issuers and investors. It is a facilitator for holding of securities in the dematerialised form and an enabler for securities transactions. [1]