CDSL Q1- Strong Industry Position, Lower Regulatory Risk Is Well Accounted In Rich Valuation: ICICI Securities

ICICI Securities Report

Depositories remain a structural play on India’s capital markets buoyed by higher retail participation. Central Depository Services Ltd. benefits from:

1. Leadership (in a duopoly), in terms of number of demat accounts (market share at 77%, as of June-24 [calculated as per data on website]);

2. steady non-market-linked revenue (from annuity issuer charges);

3. possible operating leverage ahead despite investments made in FY24; and

4. optionality such as insurance repository and pledge income (pledge income increased from Rs 30 million in Q1 FY24 to Rs 62.5 million in Q1 FY25).

5. Quarterly Ebitda of CDSL increased from average of Rs 808 million per quarter in FY23 to Rs 1,223 million per quarter in FY24 to Rs 1,544 million in Q1 FY25.

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