Summary
National Securities Depository Limited - Q3 FY 2026 Earnings Call Summary Thursday, January 29, 2026 11:00 AM
Event Participants
Executives 6 Harsh Kamdar, Jigar Shah, Kothandaraman Prabhakaran, Sameer Gupte, Sameer Patil, Vijay Chandok
Analysts 4 Amit Chandra, Ansuman Deb, Prayesh Jain, Ravi Kumar, Sanket
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Demat Accounts (NSDL) | 4.32 crores | 14.65% incremental market share in Q3; net additions grew YoY despite industry-wide deceleration. |
| Value of Custody | $527 trillion (₹4,400+ lakh cr) | NSDL maintains 86% market share by value; 81% of custody is in equity instruments. |
| Total Income (Standalone) | ₹198.7 crores | +15.4% YoY; sequential decline due to seasonality in e-voting and dividend receipts. |
| Total Income (Consolidated) | ₹394.3 crores | +0.8% YoY; revenue mix heavily impacted by Payments Bank gross accounting. |
| PAT (Standalone) | ₹77.9 crores | Broadly flat YoY; +10.3% YoY excluding a one-time non-recurring tax item. |
| PAT (Consolidated) | ₹89.7 crores | +4.5% YoY; +13.3% YoY excluding one-time tax impact. |
| EBITDA Margin (Standalone) | 60.5% | Strong operational efficiency despite increased technology spends. |
| Payments Bank Deposits | ₹475 crores | Growth driven by CASA float and UPI acquisition income. |
| Issuer Base | 1 lakh+ issuers | Milestone reached following MCA mandate for dematerialization of non-small companies. |
Geographic & Segment Commentary
- Depository Services: NSDL added 6 new Depository Participants (DPs) this quarter, including fintech players. While industry Demat growth decelerated (89 lakh vs 99 lakh YoY), NSDL’s 9-month additions rose to 37.3 lakh from 29.98 lakh YoY due to bank-broker digitization.
- Banking Services (NSDL Payments Bank): Segment results improved significantly from ₹2 crores to ₹14 crores over 9 months. The business model is transitioning toward higher-margin float and UPI acquiring, with Protean e-Governance recently acquiring a 4.95% stake.
- E-Voting: NSDL maintains market leadership, though revenue saw seasonal decline from Q2. Management noted that while event counts are up (4,400 vs 4,200 YoY), revenue fluctuates based on the specific shareholder mix per event.
Company-Specific & Strategic Commentary
- Digital Onboarding: Launched digital Demat opening for HUF joint accounts and API facilities for Government Securities (GCEX) to enhance retail accessibility.
- Strategic Partnerships: The ₹30 crore equity infusion by Protean into the Payments Bank (valuing it at ₹580 crores) aims to boost digital public infrastructure (DPI) services.
- Market Expansion: Focusing on the “conversion gap” as only 9.5% of Indian households currently participate in securities markets, aligning with SEBI’s goal of 10 crore more investors in 3-5 years.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Market Share | Improving | Scale-up from newly onboarded fintech DPs expected in H2 CY 2026. |
| Revenue Mix | Diversifying | Expected growth in non-depository segments like UPI acquiring and CASA float to provide operating leverage. |
| Issuer Growth | Cautious | Deceleration expected in unlisted issuer additions as the initial June 30th regulatory deadline has passed. |
Risks & Constraints
| Risk | Context |
|---|---|
| Regulatory Impact | New MCA/SEBI rules for unlisted companies have reduced the “eligible universe” for new joins, leading to lower joining fee run-rates. |
| Market Volatility | Persistent FII outflows ($18.9B in 2025) and subdued mid/small-cap volumes impact transaction-based revenues. |
| Revenue Concentration | While Payments Bank revenue is high, its contribution to the bottom line remains low due to high business correspondent commissions. |
Q&A Highlights
Market Share and Fintech Onboarding
- Question: Why did incremental market share dip slightly in Q3 compared to Q2? (Amit Chandra)
- Answer: Growth in Q3 was episodic, driven by high-profile IPOs that favored discount brokers; however, 6 new DPs were added, and a major Pune-based fintech player has started scaling up (Vijay Chandok).
Joining Fees and Unlisted Companies
- Question: Is the 26% QoQ drop in other transaction income permanent due to regulatory changes? (Sanket)
- Answer: The drop is primarily due to lower joining fees (4,400 companies added vs 11,000 in Q2); the full impact of the December regulation is still being monitored (Jigar Shah).
Payments Bank Profitability
- Question: Why is the bank’s profit contribution so low relative to its revenue? (Ravi Kumar)
- Answer: Gross revenue includes commissions paid to correspondents; however, the contribution margin has improved from 0.5% to 5.0% due to CASA float and UPI acquiring (Vijay Chandok, Jigar Shah).
Revenue per Demat Account
- Question: How does revenue per account differ between old and new clients? (Amit Chandra)
- Answer: While newer “Yuva” accounts contribute less transactionally today, the long-term goal is for these to mature as economic progress drives higher activity (Vijay Chandok).
Key Takeaway
National Securities Depository Limited delivered a resilient Q3 FY26, with consolidated PAT growing 13.3% YoY (adjusted for one-time tax items) to ₹97.2 crores, despite a cooling industry trend in Demat additions. The company successfully defied the broader market deceleration, increasing its 9-month Demat additions to 37.33 lakhs through deepened bank-broker digitization and the onboarding of new fintech partners. Strategic focus remains on dominant custody value (86% market share) and scaling high-leverage segments like Payments Bank UPI acquiring and e-voting. While regulatory shifts in unlisted company dematerialization pose a near-term headwind to joining fees, the management expects a structural scale-up in retail participation to offset this by H2 CY 2026. Looking ahead, NSDL remains positioned as a primary beneficiary of India’s household financialization as it targets the significant untapped majority of non-investing households.
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