Central Depository Services Limited (CDSL) reported strong numbers in its Q2 results, leading to upbeat commentary from analysts.

What Happened: CDSL's net profit was up 48% year on year to ₹162.02 crore compared to  ₹108.85 crore in the previous year. The company's revenues jumped 55% to ₹322.26 crore. 

The company's total demat accounts reached 13.5 crore in September 2024. 1.18 crore new demat accounts were opened in the September quarter.

Brokerage View: HDFC Securities maintained its "buy" call with a target price of ₹1,650, indicating an 11% upside from the previous day's closing price. The brokerage said the company's robust revenue was powered by higher IPO and corporate action revenue — which almost doubled — strong KYC revenue and e-voting, a seasonality boost.  The company’s market share increased to 78.3% with a 90% incremental market share, the brokerage noted.

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The core transaction revenue was up 11% quarter on quarter despite a reduction in transaction charges as there was high volume. The transaction charges are being reduced to ₹3.5 per debit from ₹4 per debit to adhere to the Securities and Exchange Board of India’s true-to-label circular from October, the brokerage noted.

The two amounts of price cuts will have a 17% impact in FY25, HDFC Securities said. The brokerage expects EBITDA margin to be in the range of 60%-65%. It sees the growth normalising in the third quarter and FY26 and FY27 growth will be similar to its long-term growth rate of 15%-20%. 

The research firm also increased FY26 revenue and EPS estimates by 5% and 2% while keeping the buy call. 

Price Action: Shares of CDSL were down 2.14% to ₹1,451.85  on Tuesday morning. 

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