Event Participants
Executives
9 Vijay Chandok (MD & CEO), Jigar Shah (CFO), Sameer Patil (Chief Business Officer), Kothandaraman Prabhakaran (Chief Technology Officer), Prashant Vagal (Chief Operating Officer), Rajiv Gupta (MD & CEO, NDML), Abhijit Kamalapurkar (MD & CEO, NSDL Payments Bank), Aarzoo Khandelwal (Investor Relations)
Analysts
5 Prayesh Jain (Motilal Oswal Financial Services), Sanketh Godha (Avendus Spark), Rushabh (RBSA Investment Manager LLP), Ritesh Goel (Axis Capital), Lalit Mohan Deo (Equirus Securities)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Income (Standalone) | ₹219.7 crore | Up 15.3% YoY from ₹190.4 crore in Q1 FY2026; aided by custody fee growth and recovery in market activity |
| Revenue from Operations (Standalone) | ₹182.2 crore | Up 13.2% YoY; up 6.8% QoQ |
| PAT (Standalone) | ₹89.1 crore | Up 7.9% YoY from ₹82.6 crore; PAT margin at 40.6% |
| EBITDA (Standalone) | ₹126.9 crore | Up 10.1% YoY from ₹115.3 crore; EBITDA margin at 57.8%, moderated due to front-loaded investments |
| Total Income (Consolidated) | ₹560.5 crore | Up 61.6% YoY from ₹346.8 crore; aided by Payments Bank revenue growth |
| Revenue from Operations (Consolidated) | ₹516.6 crore | Up 65.6% YoY; up 12.7% QoQ, primarily driven by banking services revenue |
| PAT (Consolidated) | ₹98.3 crore | Up 9.7% YoY from ₹89.6 crore; PAT margin at 17.5% |
| EBITDA (Consolidated) | ₹145.0 crore | Up 12.0% YoY from ₹129.5 crore; EBITDA margin at 25.9% |
| Total Demat Accounts (NSDL) | 4.56 crore | Industry Demat count crossed 23.16 crore, up 16.3% YoY; nearly 70 lakh new accounts added industry-wide in Q1 FY2027 |
| Net Demat Account Additions | 12.4 lakh | Up from 10.54 lakh in Q1 FY2026; incremental market share rose to 17.6% from ~14% in Q4 FY2026 and 15.5% in Q1 FY2026 |
| Custody Value | $5.7 trillion / ₹535 lakh crore | NSDL holds ~86% of custody value; 80% of holdings in equity |
| Depository Participants | 317 | Added 6 DPs in Q1 FY2027, following record 21 additions in FY2026 |
| Issuers | 115,000+ | Unlisted company additions in the last two years: ~33,000 in FY2025 and ~30,000 in FY2026; 3,600 companies added in Q1 FY2027 |
| Folio Count | ~14 crore | Up from ~11.9 crore in Q1 FY2026, driven by onboarding of unlisted companies |
| E-voting Events | 900 | Up from 794 in Q1 FY2026; e-voting market share increased to 64% from 61% YoY |
| Technology Capitalization | ₹7-8 crore (Q1 FY2027) | Versus ₹106 crore capitalized in FY2026 |
| Consolidated Profit Contribution (Standalone) | ~91% | NSDL standalone contributes approximately 91% of consolidated profits |
Geographic & Segment Commentary
Depository (Standalone) Business: Revenue from operations grew 13.2% YoY, with custody fee benefiting from ~60,000 unlisted companies onboarded over the last two years. Incremental Demat market share improved to 17.6% in Q1 FY2027 from 15.5% in Q1 FY2026 and ~14% in Q4 FY2026. Fintech contribution to incremental account additions rose to ~20% from ~2% a few quarters ago. Pledge income grew YoY, supported by ~15% growth in pledge/unpledge counts and rising margin trade funding book in the industry.
NSDL Payments Bank (Subsidiary): Ranked sixth as a pay PSP amongst top 15 banks in the UPI ecosystem as of June 30, 2026; among top 34 banks in India on UPI remitter bank transactions. Retail customers grew 1.7x YoY from 28.3 lakh in Q1 FY2026 to 49.5 lakh in Q1 FY2027. Margins were impacted by upfront onboarding revenue sharing associated with a specific partner project, which is expected to normalize as acquired customers pivot to transactions.
NSDL Database Management / NDML (Subsidiary): Continued focus on scaling diversified businesses including SEZ Online, KRA, and Insurance Repository businesses. Pursuant to IRDAI's guidance, transferring its Insurance Repository business to a separate dedicated subsidiary. NDML is not disclosing subsidiary-level revenue splits at this stage. Rajiv Gupta appointed as MD & CEO, succeeding Mr. Gupte. KYC revenue decline was modest (~2%) despite a 20% price cut on fetch KYC charges, aided by volume growth and diversification benefits.
Company-Specific & Strategic Commentary
Youth & Women's Demat Plans: Settlement charges made zero for the first three years for new entrant NSDL accounts under YUP (Youth Plan) and Women's Demat Plan; together accounted for 18-20% of incremental Demat additions in Q1 FY2027.
SWAGAT-FI Framework: NSDL enabled special tagging for SWAGAT-FI (Single Window Automatic Generalized Access for Trusted Financial Foreign Investors) for FPIs and FVCIs, offering simplified onboarding, reduced compliance burden, and 10-year registration validity for foreign investors.
API Ecosystem & Customer Experience: Focus on increasing utilization of 40+ APIs launched for DPs in previous quarters, improving customer experience and driving market share gains in Demat accounts.
Technology Modernization: Investments across four themes: technology resilience, customer experience, automation, and infrastructure refresh. Q1 FY2027 capitalization of ₹7-8 crore; ₹106 crore capitalized in FY2026. Management notes this is part internal assessment, part regulatory and market expectations, with operating leverage expected in the medium term.
GIFT City Investment: Board approved investment in IIBH, a GIFT City subsidiary, with NSDL holding a 20% stake.
Investor Awareness Programs (IAPs): Over 157 IAPs conducted in Q1 FY2027 across 10 states/UTs, reaching 8,000+ participants in multiple languages, in association with corporates, defense services, education institutions, and women-focused forums.
Leadership Additions: Subhash Kelkar joined as Executive Director, Critical Operations, bringing ~33 years of experience, most recently as CTO of BSE.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Operating Margins (Standalone) | Normalization expected over medium term | Management has front-loaded investments in manpower and technology; as these mature, operating leverage is expected to support normalized margins. |
| Demat Market Share | Continued improvement expected | Newly onboarded DPs (21 in FY2026, 6 in Q1 FY2027) at various stages of integration/scale-up are expected to contribute to account additions, contingent on market conditions. |
| Payments Bank Margin | Gradual stabilization/improvement expected | Q1 margin impacted by upfront onboarding revenue sharing with partner project; as acquired customers pivot to transactions and banking services, profitability should improve. |
| Hiring / Employee Costs | Peak largely reached; cautious hiring going forward | FY2026 net hiring of 98 employees; costs from recent hires will flow into upcoming quarters, but adequacy levels are broadly met. |
| IPO Activity | Pick-up expected in remaining calendar year | Muted Q1, but pipeline suggests increased activity for the rest of the year, benefiting NSDL through increased account additions. |
| Tech Capitalization | Continued investment in technology | Focus on resilience, customer experience, and automation; no specific capex guidance provided for FY2027. |
Risks & Constraints
| Risk | Context |
|---|---|
| Geopolitical / Macro Environment | West Asia conflict eased during the quarter but renewed hostilities in July have revived geopolitical and crude price risks. FPIs were net sellers for the third consecutive quarter; continued FPI outflows could pressure market sentiment and, in turn, Demat account additions and transaction volumes. |
| Competitive Pressure – Demat Market Share | NSDL's incremental market share at 17.6% remains well below the industry leader; ramp-up of new DP onboarding (21 in FY2026, 6 in Q1 FY2027) may not translate into expected account additions. Management explicitly cautioned that progress with specific new customers "does not mean anything till we see the outcome in terms of numbers" and declined to treat it as guidance. |
| Margin Pressure from Investments | Standalone EBITDA margin moderated to 57.8% due to front-loaded technology and hiring investments. If investment benefits (automation, resilience) don't materialize as expected, margin normalization could be delayed. |
| Payments Bank Partner Concentration | A specific partner project contributed significant revenue on a pass-through basis with low margins; while onboarding peaked in Q1, there is execution risk in converting acquired customers into profitable transaction-led relationships. |
| Regulatory Risks | IRDAI-directed restructuring of NDML's Insurance Repository business into a separate subsidiary is in progress, carrying transition/execution risk. Regulatory expectations on technology resilience also drive capex intensity. |
| Pricing Pressure in KRA Business | Regulator-driven 20% cut in KYC fetch charges was largely offset by volumes and diversification, but further price cuts could pressure NDML's KRA revenue. |
Q&A Highlights
Cost Structure & Investment Peak
- Question: Employee costs on standalone basis rose ~40% YoY. Are we close to peaking? Where are additions happening? (Prayesh Jain)
- Answer: Net hiring in FY2026 was ~98 employees, with costs now flowing into FY2027. Hiring will be very cautious going forward and adequacy requirements are broadly met. Additions were largely in technology and cybersecurity, which are critical for a market infrastructure institution. (Vijay Chandok)
- Question: Is technology investment regulator-driven or market-driven? (Prayesh Jain)
- Answer: Investments span four themes: technology resilience (regulatory + market overlap), customer experience (predominantly market), automation (internal operational efficiency), and infrastructure refresh (compulsion due to end-of-life hardware, typically every 5-8 years). It's a combination, not purely regulatory. (Vijay Chandok)
Payments Bank Partner Project & Margins
- Question: With the new partner arrangement, will revenues only get better from here? (Prayesh Jain)
- Answer: The project relates to card business with customers onboarded and a joining fee charged. This fee has significant revenue sharing with the partner—virtually pass-through, hence low margins. Onboarding journey peaked in Q1; from Q2 onwards, the revenue should normalize, and transaction-related profitability, which is better than joining-related profitability ratios, should follow. (Vijay Chandok; Jigar Shah confirmed significant part of onboarding completed in Q1.)
Custody Fee Growth Drivers
- Question: Annual custody income grew 30% YoY. How much driven by folio count? (Sanketh Godha)
- Answer: Growth is from onboarding unlisted companies—~33,000 in FY2025 and ~30,000 in FY2026; 3,600 added in Q1 FY2027. Folio count stands at ~14 crore versus ~11.9 crore in Q1 FY2026. NSDL's market share in unlisted companies is ~70%+. (Jigar Shah; Vijay Chandok)
Pledge Income Growth
- Question: Pledge income showed strong YoY and QoQ growth. Is this driven by MTF book growth or broker market share gains? (Sanketh Godha)
- Answer: NSDL benefits from broad market trends including growth in margin trade funding book. Pledge/unpledge counts grew ~15% YoY. With large custody presence and quality customers, NSDL benefits structurally as MTF books grow. (Jigar Shah)
KYC / NDML Revenue
- Question: KYC fetch charges were cut 20%, but KYC income declined only 2%. What drove this? What's the KYC account count? (Sanketh Godha)
- Answer: NDML's diversified business (SEZ Online, KRA, Insurance Repository, etc.) offsets price cuts; measuring solely on Demat/KRA downloads is inaccurate. Some decline from KRA price cuts was offset by SEZ business growth. Subsidiary-level revenue splits not disclosed at this stage. (Vijay Chandok; Jigar Shah)
Fintech Wins & Product Readiness
- Question: What has driven fintech's share of incremental Demat accounts from ~2% to ~20%? Is the product 70-80% ready? (Rushabh)
- Answer: Work over several quarters: addressing existing customer pain points, reducing friction, engaging back-office vendors, and positive word-of-mouth. Onboarding typically takes ~4 months with testing; ramp-up is gradual. 21 DPs added in FY2026, 6 in Q1 FY2027. Product gaps are not a showstopper—some APIs NSDL launched are not available with competition. Tactical pricing interventions (Youth/Women's Plans) also help. (Vijay Chandok)
Strategic Priorities Update
- Question: What have been hits and misses and key priorities for the next year? (Rushabh)
- Answer: Four themes laid out 1.5 years back: technology modernization, skill/leadership gap filling, market penetration, and IPO completion (done in 7 months). Leadership hiring is complete; some gap-filling below leadership. Going forward: residual technology modernization, automation, resilience, and customer experience enhancements will take center stage; market penetration remains high focus. (Vijay Chandok)
DLT Revenue & New DP Contribution
- Question: Can you quantify DLT charges in annual custody fees? How will accounts flow from the 21 new DPs? (Lalit Mohan Deo)
- Answer: DLT is a new revenue line; no specific numbers shared, but ~600 issuers are on the platform. The 21 DPs are exclusive to NSDL, so all accounts opened flow to NSDL. Onboarding takes 12-16 weeks through integration, testing, pre-production, soft launch, and final launch. Many are in various stages, with several now in production; this has driven the fintech share from ~2% to ~20%. (Vijay Chandok; Jigar Shah)
Folio & Unlisted Company Counts
- Question: What's the folio count and unlisted companies added in the quarter? What proportion of other transaction charges is joining fees? (Ritesh Goel)
- Answer: Folio count is ~14 crore vs ~11.9 crore previous year. 3,600 companies added in Q1 FY2027. Joining fee charged at ₹15,000 per company, totaling approximately ₹5-6 crore in the quarter. (Jigar Shah; Vijay Chandok)
Key Takeaway
NSDL delivered a steady Q1 FY2027 with standalone total income up 15.3% YoY to ₹219.7 crore and PAT up 7.9% to ₹89.1 crore, while consolidated income surged 61.6% on Payments Bank revenue growth. Incremental Demat market share improved to 17.6% from 15.5% a year ago, aided by 12.4 lakh net account additions, six new DPs onboarded in the quarter, and fintech's contribution to incremental additions rising from ~2% to ~20% over several quarters. Custody fee growth was driven by ~33,000 unlisted companies onboarded in FY2025 and ~30,000 in FY2026, lifting folio count to ~14 crore. Management has front-loaded technology and manpower investments, moderating standalone EBITDA margins to 57.8%, and expects operating leverage to normalize margins over the medium term. Payments Bank margins were impacted by a low-margin, pass-through partner onboarding project that peaked in Q1, with transaction-led profitability expected to improve. Strategy centers on completing technology modernization—resilience, customer experience, and automation—while continuing market penetration through new DP onboarding. Key watch points include FPI outflows, geopolitical risks from renewed West Asia hostilities, and conversion of newly onboarded DPs into meaningful account additions.
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