CDSL is India's leading listed securities depository with a dominant market position in the rapidly growing digital financial services ecosystem. CDSL facilitates holding and transacting securities in electronic form and facilitates the settlement of trades executed on stock exchanges. As a Market Infrastructure Institution (MII), CDSL plays a crucial role in India's capital markets transformation.
Market Cap
₹35,716 Cr
Current Price
₹1,683
FY25 Revenue
₹1,082 Cr
FY25 Net Profit
₹526 Cr
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📈 What you'll learn:
• Financial Health: Exceptional financial performance with a market capitalization of ₹35,716 crore, revenue of ₹1,082 crore, and profit of ₹526 crore. Strong profitability with 32.6% ROE and debt-free balance sheet.
• Competitive Positioning: India's leading listed depository with dominant 76% market share in demat accounts and 15.29 crore total accounts as of FY25.
• Growth Prospects: Poised for continued expansion with 33% revenue CAGR over 5 years and benefits from India's financial inclusion drive. Expect sustained growth from rising retail participation.
• Management Quality: Strong management with consistent 55% dividend payout, transparent governance under SEBI oversight, and prudent capital allocation track record.
• Industry Outlook: Depository services sector has strong tailwinds with increasing retail investor participation, IPO boom, and government's push towards digital financial services adoption.
Sector Analysis - Depository Services
Industry Overview
The Indian depository services sector operates as a duopoly between CDSL and NSDL, with CDSL commanding a dominant 76% market share in demat accounts as of FY24. The sector benefits from India's financial inclusion drive and the increasing retail participation in capital markets.
Positive Sector Triggers
Digital India Initiative: Government's push towards digitalization supports electronic holdings
Retail Investor Growth: CDSL has achieved a significant milestone by surpassing 60 million active demat accounts as of February 2025
IPO Boom: Record IPO activity driving new account openings and transaction revenues
Mutual Fund Growth: Rising SIP investments leading to higher demat holdings
Potential Headwinds
Regulatory Changes: SEBI regulations may impact fee structures
Exceptional Growth: Revenue CAGR of 37% over last 5 years with profit CAGR of 38%
High Margins: Consistent operating margins above 57%, indicating pricing power
Asset-Light Model: Minimal capex requirements with high returns
Debt-Free: Company is almost debt free
Areas of Concern
Q4 FY25 Softness: Net profit declined 22% YoY to ₹100.39 crore in Q4 FY25
Revenue Volatility: Quarterly fluctuations due to IPO activity and market conditions
Working Capital: Working capital days increased from 46.8 to 207 days
Balance Sheet Strength
Asset Quality
Strong Balance Sheet: Total assets of ₹2,162 Cr as of FY25
Investment Portfolio: ₹1,351 Cr in investments providing steady other income
Cash Generation: Strong operating cash flows of ₹543 Cr in FY25
Capital Structure
Equity Base: ₹209 Cr equity capital after bonus issue
Reserves: ₹1,551 Cr in reserves showcasing retained earnings
Zero Debt: Minimal borrowings ensuring financial flexibility
Key Financial Ratios & Trends
ROE (FY25)
32.6%
ROCE (FY25)
41.9%
P/E Ratio
55.9x
P/B Ratio
20.3x
Dividend Yield
0.67%
Debtor Days
18 days
Business Performance & Growth Drivers
Demat Account Growth
CDSL became the first Indian depository to register more than 15.29 crore demat accounts, adding nearly 3.73 crore accounts during FY25. This represents exceptional growth in the customer base.
Market Share Leadership
In FY24 alone, CDSL added 3.26 crore new demat accounts, accounting for a massive 88% of the industry's total additions, demonstrating its competitive advantage in attracting retail investors.
Revenue Diversification
Transaction Fees: Growing with increased trading activity
Annual Maintenance: Recurring revenue from existing accounts
Corporate Actions: Revenue from dividend/bonus distributions
Concentration Risk: Promoter holding is low at 15%
Investment Recommendation
CDSL presents a compelling long-term investment opportunity in India's digital financial services ecosystem. The company benefits from a dominant market position, exceptional growth metrics, and strong financial health. While current valuations appear stretched, the structural growth story and market leadership justify a premium.
Key Investment Highlights:
Market leader with 76% share in growing demat accounts market
Consistent revenue growth of 33% CAGR with high margins
Asset-light, high-ROE business model with operating leverage
Strong balance sheet with zero debt and consistent cash generation
Beneficiary of India's financial inclusion and digitalization trends
Investment Considerations: Suitable for investors with 3-5 year investment horizon who believe in India's capital markets growth story. Current valuations require patience for optimal entry points during market corrections.
Analysis Methodology
This analysis is based on The Web Cornucopia™ Stock Analysis & Ranking Methodology which evaluates stocks comprehensively across Financial Strength, Growth Potential, Competitive Edge, Management Quality, and Value parameters.