Event Participants
Executives
3 Nehal Vora (MD & CEO), Girish Amesara (CFO), Sunil Alvares (MD & CEO - CDSL Ventures Ltd)
Analysts
7 Amit Chandra (HDFC Securities), Hiral Parekh (Dolat Capital), Madhukar Ladha (J.P. Morgan), Neeraj Toshniwal (UBS), Prayesh Jain (Motilal Oswal Securities), Sanketh Godha (Avendus Spark), Swarnabha Mukherjee (360 ONE Capital)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Demat Accounts | 18.59 crore | ~80% market share as of 30 Jun 2026 |
| New Demat Accounts (Q1) | 58 lakh | Market activity remains healthy |
| Folio Count | 38.73 crore | +16.7% YoY vs 33.2 crore; drives annual issuer charges (12.3% YoY growth) |
| Standalone Total Income | ₹326.51 crore | +4.5% YoY vs ₹312.36 crore; includes ₹39.5 cr subsidiary dividend (vs ₹62 cr prior year) |
| Standalone Net Profit | ₹144 crore | -5.3% YoY vs ₹152 crore; impacted by lower subsidiary dividend |
| Consolidated Total Income | ₹340.50 crore | +15.4% YoY vs ₹295.14 crore |
| Consolidated Net Profit | ₹118 crore | +15.7% YoY vs ₹102 crore |
| CVL Revenue (Operations) | ₹45 crore | +22% YoY vs ₹36 crore; driven by other digital service offerings |
| CVL Total Income | ₹50 crore | +18% YoY vs ₹43 crore |
| CVL PAT | ₹12.11 crore | -5% YoY vs ₹12.71 crore; expenses +31% YoY on higher investments |
| Other Income (Consolidated) | ₹75 crore | Includes CAS fee ₹14.80 cr, e-voting ₹6.32 cr, MTM/accrued income ₹43.8 cr, other operating revenue ₹6 cr, residual ₹3.94 cr |
| Pledge/Margin Pledge Income | ₹6.19 crore | Standalone metric for the quarter |
| Impairment Cost/Provision | ₹2.22 crore | Data provision in the quarter |
| Tax Rate | 25.17% | Within normal range |
Geographic & Segment Commentary
Depository Business (Standalone): Total income of ₹326.51 crore (+4.5% YoY) with net profit of ₹144 crore, impacted by lower dividend from subsidiary (₹39.5 cr vs ₹62 cr YoY). Annual issuer charges grew 12.3% YoY on folio growth to 38.73 crore. Unlisted company revenue was just ₹0.30 crore this quarter (vs ₹3.5 crore, by one analyst's estimate, the prior quarter), while application processing fees were ₹2.32 crore — reflecting normalization after last year's one-time benefit from MCA threshold changes.
CDSL Ventures Ltd (CVL - KYC/Digital): Revenue from operations grew 22% YoY to ₹45 crore despite SEBI-mandated fee cuts (fetch ₹35→₹28, creation ₹20→₹5). Higher fetch volumes and a new SEBI-allowed ₹0.25 search API charge partially offset the rate reductions. PAT declined 5% YoY to ₹12.11 crore as expenses rose 31% YoY on investment in digital service capabilities.
Company-Specific & Strategic Commentary
Leadership Appointments: Board and shareholders approved appointment of Shri Amit Marjan as Executive Director (Vertical 1) and Smt. Naina Obliker as Executive Director (Vertical 2), after SEBI approvals — aimed at strengthening operations, technology, compliance, risk management, and investor-facing functions.
Industry Recognitions: Named "Most Innovative Fintech Company in Asia Pacific" by Global Finance magazine and received the Innovation and Settlement Efficiency Award at the Global Custodian Leaders in Asia Custody Awards.
Strategic Investment: Invested in Baiglis Samathi Foundation, an RBI-recognized self-regulatory organization for the account aggregator ecosystem — expanding presence in the broader financial data infrastructure space.
ISIN Issuance Capability: Under active engagement; not yet gone live. Management will announce when the capability becomes operational — a potential source of new revenue from unlisted company securities.
Unified KYC Integration: In process of testing integration with CDSL systems; timelines dependent on regulator and system readiness. Management expects clarity after another quarter as search API volumes stabilize.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Technology Spend | No guidance | Management declined to indicate whether spending has peaked, citing rapidly evolving technology and regulatory requirements; infrastructure maintenance is a continuous priority |
| Search API Revenue | Stabilization expected after Q1 | Intermediaries fine-tuned systems after the new ₹0.25/search charge, causing volume drop in months 2-3 of the quarter; one more quarter needed to assess run rate |
| Unlisted Revenue | No specific guidance | Phased increase expected as regulatory intent pushes more companies into depositories; MCA threshold effect from prior year was a one-time benefit |
| Employee Costs | Appraisal cycle normalization | Q1 included year-end appraisals and variable pay; historical quarterly trend expected to persist |
| KYC Pricing | Industry-wide SEBI-mandated cuts in effect | Fetch ₹28 (from ₹35), creation ₹5 (from ₹20); no further revisions indicated |
Risks & Constraints
| Risk | Context |
|---|---|
| Incremental Demat Market Share Loss | CDSL lost ~420 bps in incremental account share since March 2026 (to ~81.4% in June) as competition reduced onboarding friction with fintech brokers. Management characterized this as part of ongoing value-proposition work rather than a structural issue. |
| KYC Pricing Reset | SEBI-mandated fee reductions (fetch -20%, creation -75%) create a revenue headwind for CVL; partially offset by higher volumes and the new search API charge, but the search API run rate is still stabilizing. Unified KYC could further alter the pricing landscape. |
| Unlisted Revenue Normalization | Unlisted company revenue declined sharply quarter-on-quarter (₹0.30 crore vs ~₹3.5 crore by analyst estimate) after last year's MCA threshold change pulled in a wave of unlisted companies. The new normal for this segment is unclear. |
| Technology/Regulatory Spend Escalation | Management refused to characterize technology spend as peaked, citing continuous regulatory changes and fast-evolving technology; the cost base (employee expenses +30% YoY in Q1) could remain elevated. |
| ISIN Capability Delay | The ISIN issuance capability, which would diversify revenue from unlisted companies, is still not operational — no timeline given. |
Q&A Highlights
Annual Issuer Charges Growth Below Expectation
- Question: Folio growth is ~16-17% YoY but issuer charges grew only 12.3% — is the gap due to the unlisted piece? (Sanketh Godha, Avendus Spark)
- Answer: Charges are formula-driven based on folios; the lower growth reflects the unlisted segment normalization. Phase-wise increase expected as regulatory intent pushes more companies into the depository fold, but no specifics given. (Nehal Vora)
KYC Revenue — Pricing Reset Impact and Offsets
- Question: With a ~20% pricing reset, why was the KYC impact lower than expected? (Amit Chandra, HDFC Securities)
- Answer: Higher fetch volumes reduced the actual impact to ~9%. Additionally, SEBI allowed a new charge on the search API (₹0.25 per search), which brought in incremental revenue. (Sunil Alvares)
Search API — Run Rate and Sustainability
- Question: What is the run rate from the search API and how much benefit has it provided? (Neeraj Toshniwal, UBS)
- Answer: The charge kicked in only this quarter; intermediaries started fine-tuning systems after the levy, causing a considerable volume drop in months 2-3. Need one more quarter for volumes to stabilize before assessing the run rate. (Sunil Alvares)
Technology Expenses — Has Heavy Lifting Peaked?
- Question: Is it fair to assume most heavy technology investment is behind us? (Amit Chandra, HDFC Securities; Prayesh Jain, Motilal Oswal)
- Answer: Management declined to give forward-looking statements. Stressed that technology and human resources are "raw material" for an infrastructure company; spend will be whatever is required to keep systems contextual and value-proposition-driven in a rapidly changing environment. (Nehal Vora)
Incremental Demat Market Share Loss
- Question: Competition has reduced onboarding friction; CDSL lost ~420 bps in incremental share since March (to ~81.4%). How do you view this? (Hiral Parekh, Dolat Capital)
- Answer: Growth is not a quarter-on-quarter metric; the focus is on long-term sustainable value creation. Account growth is a function of market perception; the key is ensuring intermediaries and investors continue to feel the value proposition of the CDSL platform. (Nehal Vora)
Other Income Breakup and MTM Gains
- Question: Can you provide a split of other income and how much was MTM-driven? (Hiral Parekh, Dolat Capital)
- Answer: Consolidated other income of ₹75 crore comprises: CAS fee ₹14.80 cr, e-voting ₹6.32 cr, investment MTM gain and accrued income ₹43.8 cr, other operating revenue ₹6 cr, and residual ₹3.94 cr. No direct equity mutual fund investments; ETF exposure is 5-7% of the investable portfolio. (Girish Amesara)
Employee Cost Increase
- Question: Employee costs were up ~30% YoY — is this run rate sustainable? (Madhukar Ladha, J.P. Morgan)
- Answer: Q1 includes the year-end appraisal cycle and variable pay payout; the YoY increase reflects headcount growth for scale and complexity. Historical quarterly trends should be referenced for run-rate expectations. (Nehal Vora)
Unlisted Revenue Decline
- Question: Unlisted revenue fell to ₹0.30 crore from ~₹3.5 crore last quarter — why? (Swarnabha Mukherjee, 360 ONE Capital)
- Answer: The ₹0.30 crore figure is the one-time admission/recurring fee from unlisted companies admitted during the quarter; CDSL does not track listed vs unlisted split for annual custody fees. The prior quarter benefited from MCA threshold-driven admissions, a one-time effect. (Sunil Alvares)
ISIN Issuance Capability Status
- Question: Have you got the capability to issue ISINs for unlisted companies? (Madhukar Ladha, J.P. Morgan)
- Answer: Under active engagement, not yet gone live; necessary processes still pending. Announcements will be made when it becomes operational. (Nehal Vora)
Key Takeaway
CDSL delivered a modest consolidated performance in Q1 FY27, with consolidated income up 15.4% YoY to ₹340.5 crore and net profit up 15.7% to ₹118 crore, though standalone profit declined 5.3% due to lower subsidiary dividends. The quarter saw 58 lakh new demat accounts (total 18.59 crore, ~80% share), but incremental market share slipped ~420 bps since March, with management stressing long-term value creation over quarterly metrics. The central challenge is KYC pricing: SEBI-mandated fee cuts (fetch -20%, creation -75%) were partially offset by higher volumes and a new ₹0.25 search API charge, though the stabilized run rate remains uncertain. Folio growth (+16.7% YoY to 38.73 crore) underpinned issuer charges (+12.3% YoY), while unlisted revenue normalized to negligible levels after last year's MCA-driven surge. Management declined all forward guidance on technology spend, search API revenue, and unlisted growth, citing an evolving regulatory and technological landscape; watch points include ISIN capability launch, unified KYC integration, and stabilization of KYC-related income streams in coming quarters.