Summary
Central Depository Services (India) Limited - Q3 FY 2026 Earnings Call Summary Monday, February 02, 2026
Event Participants
Executives 6 Girish Amesara, Kamlendra Srivastava, Latesh Shetty, Nehal Vora, Sunil Alvares, Swaroop Gothi
Analysts 7 Amit Chandra, Lalit Mohan Deo, Muskan Chopra, Rohan Nagpal, Sanketh Godha, Shreya Kejriwal, Supratim Datta
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Income (Consol) | ₹334 crores | +12% YoY; Growth driven by strong transaction volumes and issuer charges. |
| Net Profit (Consol) | ₹133 crores | +2.3% YoY; Impacted by higher technology spend and lower CVL margins. |
| Total Income (Standalone) | ₹279 crores | +18.7% YoY; Reflects robust growth in the core depository business. |
| Net Profit (Standalone) | ₹120 crores | +14.3% YoY; Stronger than consolidated performance due to depository scale. |
| CVL Revenue (9M FY26) | ₹132 crores | -30% YoY; Primarily impacted by changes in KYC dynamics and high base effect. |
| Demat Accounts | 17.27 crores | +75 lakh accounts added in Q3; Maintaining 80% market share. |
| CAS Income | ₹12.78 crores | Quarterly revenue from Consolidated Account Statements. |
| e-Voting Income | ₹5.23 crores | Seasonal decline from Q2 (₹19.77 cr) but +11% higher than Q3 FY25. |
| Annual Issuer Income | ₹33.76 crore folios | Folio count as of Q1; reset expected in Q1 of next fiscal. |
| Technology Cost | ~14% of Revenue | Increased approx. 4x since FY23 to build future-ready infrastructure. |
Geographic & Segment Commentary
- Depository Services: The core segment maintains market leadership with an 80% share of total demat accounts (17.27 crores). Growth is driven by account additions and transaction volumes, though average daily turnover in the broader market saw a slight decline of 8.3% YoY in December 2025.
- CDSL Ventures Limited (CVL): Revenue for the 9-month period fell to ₹132 crores from ₹189 crores YoY. The segment is navigating regulatory shifts in KYC (KRA) and competition from CKYC, though management maintains that KRA data remains superior due to validated fields and deeper client due diligence.
- Insurance & Commodity Repositories: Centrico (Insurance) revenue remains steady with strategic focus on the Q4 peak policy season. The Commodity repository continues to monitor market shifts as investor interest in commodities grows relative to equities.
Company-Specific & Strategic Commentary
- Technology Infrastructure: Management is aggressively investing in hardware, software, and AI-ready systems, with technology costs rising to 14% of revenue. The focus is on building “road-like” capacity to handle sudden volume surges, similar to the 2020-21 period.
- KYC Registration Agency (KRA): CVL is integrating with CKYC as per Ministry of Finance mandates. Management argues KRA is irreplaceable for capital markets due to SEBI-proposed additions like bank details and occupation data not currently in CKYC.
- Investor Education: Reached a milestone of 100 million YouTube views and launched the “Reimagine Ideathon” involving 1,000+ students to innovate on investor empowerment and market trust.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Technology Spend | Continued high investment | Costs are not strictly linear to volume but geared toward “step-up” capacity and security. |
| Issuer Fee Hike | Under Discussion | No specific timeline; management noted the current fee structure has been static for 10 years and are in dialogue with the regulator. |
| Unlisted Demat | Tracking Regulatory Shifts | Growth will depend on companies raising or transferring capital under new “not so small company” definitions. |
Risks & Constraints
| Risk | Context |
|---|---|
| Technology Cost Inflation | Tech spend has outpaced volume growth (4x vs 1.8x). Management views this as essential infrastructure “road building” rather than variable cost, potentially pressuring short-term margins. |
| KYC Regulatory Shifts | Potential for revenue capping or shifts toward CKYC 2.0. Management believes higher-quality KRA data and regulatory mandates for intermediaries to fetch their own records mitigate this. |
| Market Share Pressure | Slight dip in incremental market share noted by analysts. Management attributes this to seasonal DP performance and maintains they are ₹0.50 cheaper than competitors. |
Q&A Highlights
Technology Costs
- Question: Why have technology costs grown 4x since FY23 while volumes only grew 1.8x? (Supratim Datta)
- Answer: Capacity must be built ahead of the curve to ensure seamlessness during surges. Investment covers application, hardware, network, and security to incorporate AI and newer SEBI security requirements (Nehal Vora).
KRA/KYC Business Durability
- Question: Does CKYC 2.0 pose a risk to the KRA business pricing? (Supratim Datta)
- Answer: KRAs hold validated data and more fields than CKYC. New SEBI proposals for bank/occupation data in KRAs and MoF mandates to link KRAs to CKYC ensure long-term relevance (Sunil Alvares).
Issuer Charges
- Question: Is an issuer fee hike likely after 10 years of stagnation? (Amit Chandra)
- Answer: We do not disclose regulatory correspondence, but the regulator is observant of cost increases. Any hike will be announced at the appropriate time (Nehal Vora).
Incremental Market Share
- Question: Has there been a mass migration of DPs to competition causing a drop in incremental share? (Sanketh Godha)
- Answer: No significant drop; share fluctuates based on seasonal DP activity. CDSL remains ₹0.50 cheaper than the competition and focuses on its value proposition (Nehal Vora).
Key Takeaway
CDSL delivered a steady Q3 FY26 with consolidated revenue growing 12% YoY to ₹334 crores, supported by a dominant 80% market share in demat accounts (17.27 crores). While standalone performance remained resilient, consolidated margins were tempered by a 30% revenue decline in the CVL (KYC) segment and a deliberate 4x increase in technology spend since FY23. Management characterizes this spending as essential “infrastructure building” to ensure system integrity for future market surges. Despite analyst concerns regarding incremental market share and the rise of CKYC, CDSL remains focused on its low-cost leadership and expansion into insurance and commodity repositories. The forward outlook depends on the timing of a potential (though unconfirmed) issuer fee hike and the stabilization of KRA revenue streams.
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