CDSL CMP 1661. ENTRY PRICE 1534. TARGET 1690, SL 1522.

CDSL CMP 1661. ENTRY PRICE 1534. TARGET 1690, SL 1522.

The stock’s strong uptrend from late March to early June has now reversed sharply. The price action now shows signs of consolidation following the decline, with volume dropping by 23.9%. The stock is closing below 20 DEMA while a 50 DEMA plots at around Rs.1472 shows an important support. Suggested a “buy on dip” opportunity during a fundamentally sound stock’s correction. Recommended entry level would be Rs.1534 with s SL below 1522. The expected target price could be Rs.1690.

Trading activity doubled to approximately 1.05 crore shares on June 2, significantly above the average, signaling strong market interest. Recommended a final dividend of ₹12.50 per share, its first dividend after the 1:1 bonus share issue—underscoring shareholder return efforts.

Company Profile :

Central Depository Services (India) Limited, popularly known as CDSL, is one of India’s two primary securities depositories, operating under the regulatory framework of the Securities and Exchange Board of India (SEBI). Established in 1997 and headquartered in Mumbai, CDSL began its operations in 1999, offering dematerialization services to investors and facilitating the electronic holding and transfer of securities.

CDSL was promoted initially by BSE Ltd (Bombay Stock Exchange) and is now supported by a consortium of prominent financial institutions including State Bank of India (SBI), HDFC Bank, Canara Bank, and Standard Chartered Bank. It was the first depository in Asia to go public, achieving a successful listing on the Indian stock exchanges in 2017.

The company plays a pivotal role in the Indian capital market infrastructure by providing a wide range of services including dematerialization of securities, trade settlement, pledge and hypothecation, corporate action handling, KYC services, e-voting, and more. It has also ventured into related domains through its subsidiaries: CVL (CDSL Ventures Ltd), which handles KYC and e-sign services; CIRL (CDSL Insurance Repository Ltd), which manages insurance policy dematerialization; and CCRL (CDSL Commodity Repository Ltd), which caters to commodity market depository needs.

CDSL has witnessed phenomenal growth, particularly in the retail investor segment. As of FY24, it holds over 149 million demat accounts, the highest in India, compared to NSDL's approximately 38 million. This makes CDSL the largest depository in India by number of accounts, primarily due to its strategic positioning with discount brokerages like Zerodha, Upstox, and Groww, which cater to India's booming retail investor base. This broad user base has helped CDSL become the depository of choice for new-age and tech-savvy investors.

Despite having a lower custody value (₹39.7 lakh crore) than NSDL (₹302 lakh crore), which largely dominates the institutional segment, CDSL has maintained superior profit margins, recording a net profit margin of 46% and robust EBITDA margins of over 60% in recent years. These high returns are attributed to its lean operating structure, low-cost infrastructure, and scalable digital architecture.

CDSL’s revenue model is driven by account maintenance charges, transaction fees, and income from subsidiaries. In FY23–24, it reported revenues of approximately ₹900 crore with a net profit of over ₹420 crore, underscoring its operational efficiency and financial health. Its debt-free balance sheet and consistent dividend payouts make it a favorite among retail investors and institutions alike.

The company does face some challenges. Its revenue is sensitive to fluctuations in trading activity, which is influenced by market conditions. Moreover, the duopoly in the Indian depository space means that NSDL, backed by NSE, remains a significant competitor, especially in terms of large institutional and custody services.