Central Depository Services (India) Ltd — ZetaVantage Knowledge Base

Hold

Thesis MAINTAINING

Valuation EXPENSIVE

Method PEG

LOW 1.0pts from 45 ↑2.4 over 7d stable 11d

Near threshold — system is uncertain

Investment Thesis

Strong — all assumptions holding Maintaining — minor concerns, thesis intact Weak — key assumptions under pressure Broken — critical assumption invalidated

Status MAINTAINING

Conviction 46 / 100

Time Horizon 12-18 months

Last Grading Q4FY26 1 MEET 2 MISS

GROWTH Over the next 12-18 months, Central Depository Services (India) Ltd will achieve robust revenue growth driven by increasing retail investor participation and expansion of its service offerings, while maintaining strong financial health and market leadership.

Conviction vs. Price

Assumptions

Holding — assumption intact At Risk — evidence weakening Broken — assumption invalidated Critical — if broken, thesis fails

BEAT — exceeded target MEET — met expectations MISS — missed target Insufficient Data

#1 CRITICAL GROWTH AT_RISK 48

CDSL will continue to expand its demat account base, driving transaction and data service revenue growth

GROWTH 60% VOLUME 40%

Quarterly Checkpoint: Q4FY26 will see Revenue of ₹338.00 Cr, representing a YoY growth of ~11.2% (Q3FY26: ₹304.00 Cr, +9.4% YoY)

Thesis Horizon Target: By end of FY27, CDSL will cross 20 crore demat accounts, supporting revenue growth targeting >= INR1,400 crores in standalone revenue (FY26E: ~INR1,160 crores, based on 9MFY26 run rate and Q3FY26 quarterly run rate)

Grade History: Q4FY26

#2 CRITICAL GROWTH AT_RISK 53

CDSL will successfully monetize new service offerings and expand its ecosystem business lines

GROWTH 70% PRICING 30%

Quarterly Checkpoint: Q4FY26 will see Revenue of ₹338.00 Cr, with new ventures (commodity/insurance) contributing ~1.8% of total revenue (Q3FY26: ₹304.00 Cr, <1.5% contribution)

Thesis Horizon Target: By end of FY27, revenue contribution from new ventures (commodity, insurance repositories, etc.) will reach 3-5% of standalone revenue (FY27E: INR35-60 crores), supplementing core depository services.

Grade History: Q4FY26

#3 FINANCIAL HEALTH AT_RISK 46

CDSL's high operating margins will remain resilient due to its asset-light, scalable model despite moderate capex increases

COGS 50% CAPEX 50%

Quarterly Checkpoint: Q4FY26 OPM% to recover to 53.5% (Q3FY26: 52.0%; 9MFY26: 57.4%)

Thesis Horizon Target: FY27 standalone operating margin to average >= 55% (FY26E: ~56%; KB: operating leverage, high EBITDA margins)

Grade History: Q4FY26

#4 GOING CONCERN HOLDING 70

No material adverse regulatory changes or governance failures will disrupt CDSL's operations or market position

GOING_CONCERN 100%

Quarterly Checkpoint: No new SEBI regulations imposing significant new compliance costs or restricting core depository operations in Q4FY26

Thesis Horizon Target: CDSL will maintain its market leadership and operational integrity through FY27 without significant regulatory penalties or governance issues (KB: SEBI regulations paramount, no major red flags)

Grade History: Q4FY26

Recent Developments

Structural Tactical

GROWTH TACTICAL May 25, 2026

[NSE] - General Updates

GROWTH STRUCTURAL May 12, 2026

Sebi explores tokenized corporate bonds pilot to deepen India’s debt markets - Mint

Sebi is exploring a pilot program for tokenized corporate bonds to deepen India's debt markets, leveraging existing blockchain-based systems used by depositories like CDSL for monitoring non-convertible securities.

GOING_CONCERN TACTICAL May 10, 2026

[CONFERENCE_CALL] [Q1FY27] Preparation for Securities Market Code 2025 regulat

[Q1FY27] Preparation for Securities Market Code 2025 regulatory overhaul

GROWTH TACTICAL May 10, 2026

[CONFERENCE_CALL] [Q1FY27] Standalone and Consolidated Net Profits decline des

[Q1FY27] Standalone and Consolidated Net Profits decline despite revenue growth

VOLUME TACTICAL May 08, 2026

Vedanta Demerger: Demat credit begins for 4 new entities; listing likely soon - Zee Business

Commenced demat credit of shares for four new entities following the Vedanta demerger, driving corporate action transaction volumes.

VOLUME TACTICAL May 06, 2026

When will FIIs come back to India? Why the ‘AI Trade’ and $114 crude are keeping foreign investors away - financialexpress.com

FIIs sold over ₹1.91 lakh crore in Indian equities in 2026, driven by macro pressures including $114 crude and a record low rupee at 95/$.

VOLUME TACTICAL May 04, 2026

CDSL, NSDL trade mixed after core biz underperforms in Q4; Here are some positives

Q4 revenue declined 13.7% and PAT fell 40% sequentially, driven by a 71% collapse in IPO and corporate action income.

VOLUME TACTICAL Mar 16, 2026

ASI Industries Opens Special Window for Physical Share Transfer Re-lodgement - scanx.trade

ASI Industries opened a year-long window for physical share re-lodgement, requiring all processed securities to be issued exclusively in demat mode.

VOLUME TACTICAL Mar 10, 2026

Groww: 7 reasons why JP Morgan calls it India’s ‘most lucrative consumer internet’ stock’ - The Financial Express

Major partner broker Groww increased retail cash market share from 18% to 29% and derivatives share from 11% to 18% year-over-year.

GROWTH TACTICAL Mar 06, 2026

Reached 18.02 crore total demat accounts following 75 lakh additions in Q3FY26; regulator currently evaluating proposed issuer fee hike.

GROWTH STRUCTURAL Feb 21, 2026

Sebi's NAV upload mandate for alternative funds inevitable demat cleanup: Industry experts - Moneycontrol

SEBI mandated dematerialization and NAV uploads for Alternative Investment Funds (AIFs), expanding the regulatory scope for depositories.

Investor Documents

Annual Report (FY25) Quarterly Results (Q4FY26) Conference Call (Q1FY27) Investor Presentation (Q1FY27)