Central Depository Services (India) Ltd.
NSE: CDSLCentral Depository Services (India) Ltd.: A 30-second snapshot
CDSL, the Central Depository Services (India) Ltd, reported a 20% YoY net profit decline in Q4 FY26 despite modest revenue growth, with trailing PE at 54.3x and forward PE compressing to 38.7x. The stock trades at ₹1,186.7, approximately 17.5% below its 200-DMA of ₹1,438.2 and 34.6% below its 52-week high. ROE of 23.9% leads the assigned peer group, and the balance sheet carries negligible debt (D/E 0.11) with FCF positive in each of the 4 years on record.
P/E
54.3
Forward P/E
38.7
ROE
+23.9%
Debt / Equity
0.11
Profit Margin
+36.8%
Div. Yield
+1.1%
5Y ROE > 15%
4/5
5Y FCF > 0
4/5
Quality
61/100
News
8 headlines · 2 positive · 3 negative
NSDL, CDSL shares get 'add'; KFin Tech, CAMS rated 'buy' as Axis Capital initiates coverage — here are the target prices - MSN
MSN
CDSL Q4 FY26 Results: ₹12.75 Dividend Recommended, Detailed Financials Released - scanx.trade
scanx.trade
CDSL Q4 Results: Profit Falls 20%, Margin Contracts; Dividend Declared - NDTV Profit
NDTV Profit
CDSL Profit Drops 20% Despite Revenue Rise as Costs Squeeze Margins - Whalesbook
Whalesbook
CDSL Q4 profit falls 20% to ₹80 crore, margins contract - CNBC TV18
CNBC TV18
Recent context
- ·Q4 FY26 results released May 2026: net profit approximately ₹80 crore, down 20% YoY; revenue grew but margin contraction driven by higher technology spend and regulatory KYC fee reductions was reported across NDTV Profit, CNBC TV18, and Whalesbook.
- ·Axis Capital initiated coverage on CDSL in May 2026, assigning an Add rating alongside initiations on NSDL, KFin Tech, and CAMS, marking new institutional research attention on India depository and registrar infrastructure companies.
- ·Support level identified at ₹1,116.3, approximately 5.9% below the current price of ₹1,186.7; resistance levels cluster at ₹1,261.7, ₹1,401.1, and ₹1,412.0 — the nearest resistance is 6.3% above current price.
Strengths
- +ROE of 23.9% is the highest among the 6 companies in the assigned peer group and has exceeded 15% in 4 of 4 available years, suggesting durable equity returns relative to capital employed.
- +Balance sheet is nearly debt-free: D/E of 0.11 and FCF positive across all 4 years of available persistence data, with a consistency score of 93/100.
- +Forward PE of 38.7x represents a meaningful compression from the trailing PE of 54.3x, reflecting a narrowing between current price and near-term earnings expectations.
- +Dividend of ₹12.75 per share declared for Q4 FY26 (as reported in May 2026 news), with a trailing dividend yield of 1.05%, alongside an announced earnings result — providing a recent shareholder-return data point.
Weaknesses
- −5-year earnings growth of -20.1% against 5-year revenue growth of 5.5% indicates that a meaningful share of revenue gains has been absorbed by rising costs, resulting in contracting profit margins over the medium term.
- −Price is 17.5% below the 200-DMA (₹1,438.2) and 4.8% below the 50-DMA (₹1,246.2); the stock has declined 9.6% over 12 months and 15.1% over 3 months, with RSI at 37.3.
- −Q4 FY26 results showed profit falling 20% YoY as technology cost increases and KYC fee regulatory cuts compressed margins — a pattern highlighted across multiple independent news sources.
- −Quality composite score of 43 out of 100 places CDSL 4th of 6 in the peer group, below AXISBANK (53) and BAJFINANCE (53), though the peer group is composed of banks and financial conglomerates rather than capital-markets infrastructure peers.
Open questions
- ?Is the 5-year earnings decline a function of cyclical capital-markets activity (IPO volumes, demat account growth rates) or a structural shift in CDSL's cost base and regulatory fee environment?
- ?How does CDSL's revenue mix between transaction fees, annual issuer charges, and other services evolve as IPO pipelines fluctuate, and what proportion of revenue is recurring versus activity-linked?
- ?Given that D/E is 0.11 and FCF has been consistently positive, to what extent does the balance sheet strength provide a buffer if revenue headwinds from KYC fee cuts and subdued IPO activity persist?
- ?Does the 17.5% gap between current price and the 200-DMA reflect a change in the fundamental earnings outlook, sector rotation away from capital-markets infrastructure, or a broader market de-rating of high-PE financial sector names?
Peer comparison: Banking
Ranks 4 of 6 on quality| Symbol | Name | P/E | ROE | Quality |
|---|---|---|---|---|
| CDSL | Central Depository Services (India) Ltd.You're viewing | 54.3 | +23.9% | 43 |
| Industry avg | across 5 peers | 31.7 | +14.2% | 39 |
| AXISBANK | Axis Bank Ltd. | 14.7 | +13.2% | 53 |
| BAJFINANCE | Bajaj Finance Ltd. | 29.9 | +17.9% | 53 |
| HDFCBANK | HDFC Bank Ltd. | 17.1 | +13.8% | 47 |
| BAJAJFINSV | Bajaj Finserv Ltd. | 28.3 | +14.6% | 23 |
| HDFCLIFE | HDFC Life Insurance Company Ltd. | 68.5 | +11.3% | 20 |
Technical state
Current price
₹1,186.70
SMA 50
₹1,246.16
SMA 200
₹1,438.18
RSI (14)
37.3 (neutral)
From 52w high
-34.6%
1Y return
-9.6%
3M return
-15.1%
50-DMA
Below
200-DMA
Below
Algorithmic support levels
Algorithmic resistance levels
Risk flags
- medium5-year earnings growth of -20.1% contrasts with 5-year revenue growth of 5.5%, indicating sustained margin compression; Q4 FY26 net profit fell 20% YoY to approximately ₹80 crore as technology costs and KYC fee reductions weighed on profitability.
- mediumPrice of ₹1,186.7 is 4.8% below the 50-DMA (₹1,246.2) and 17.5% below the 200-DMA (₹1,438.2); down 9.6% over 12 months and 15.1% over 3 months, with a 34.6% drawdown from the 52-week high. Below both moving averages for an extended period.
- lowQuality score of 43 out of 100 places CDSL 4th of 6 in the assigned peer group; peer set (AXISBANK, HDFCBANK, BAJFINANCE, BAJAJFINSV, HDFCLIFE) comprises banks and financial conglomerates rather than capital-markets infrastructure peers, limiting the comparability of relative quality and PE metrics.
- lowNews flow (8 items total: 2 positive, 3 neutral, 3 negative) concentrates around the Q4 FY26 earnings miss; IPO activity slowdown and regulatory KYC fee cuts are cited as structural revenue headwinds in multiple reports.
Cross-section contradictions
- Persistence metrics are strong — FCF positive in 4 of 4 available years, D/E of 0.11, consistency score 93/100 — yet 5-year earnings growth is -20.1% and the stock is 34.6% below its 52-week high, reflecting a divergence between balance-sheet quality and earnings trajectory.
- Axis Capital initiated coverage with a stated rating of Add (per May 2026 headline), signalling some constructive sell-side interest, yet the stock has declined 15.1% in the past 3 months and sits below both key moving averages.
For informational purposes only. Not investment advice. VivaTrades is not a SEBI-registered Investment Adviser or Research Analyst. Market data sourced from public feeds; consult a registered adviser before any investment decision.
Fundamentals & technicals: refreshed 25 Jun 2026 · refreshed daily at 01:00 IST
AI synthesis (narrative, snapshot, strengths/weaknesses, peer ranking): generated 17 May 2026 · rotates through NIFTY 500 every ~5 days