AI-generated · cited to primary sources · not investment advice
C D S L (CDSL) Feb 2026 Filing Analysis
Does management do what it says?
Standalone IT costs for Q2FY25 were ₹18 crore against an operating income of ₹248 crore, representing approximately 7.2% of operating income. On a consolidated basis, IT costs were ₹24 crore against ₹359 crore total income (approx 6.7%). While slightly below the 10-12% range in percentage terms due to the massive revenue surge, the absolute spend has increased from ₹13 crore in Q2FY24. (1 met, 1 in progress, 1 revised across 3 tracked commitments)
“Second is there are newer ways on security side, on the application side, which make it easier, more seamless with AI coming in also. So, the technology has to keep in step with all these newer reforms which are coming into play also.”
CDSL is maintaining a price advantage by keeping costs INR 0.50 lower than the competition to drive value proposition and account retention. — target: INR 0.50 cheaper than competition
“Also, in terms of cost, we are INR0.50 cheaper than that of our competition. So, it is the overall scheme of things, which people will take into consideration as to where they would like to.”
See the full cited Management analysis of C D S L
How durable is the business?
The network effect is expanding as the total demat account base crossed the 15 crore milestone, though the pace of new additions (Net A/c opened) moderated to 64 lakhs in Q4 from 92 lakhs in Q3. (5 expanding)
“First depository to cross the milestone 14.50+ crore demat accounts... Became the First Listed Depository in Asia Pacific Region”
Annual Issuer Income continues to expand as the primary stable revenue pillar, growing 7.4% sequentially from Q3 to Q4 FY25, and significantly up from the previous year's quarter. (5 expanding across 1 engine)
“Annual Issuer Income Q3FY26: 113; Q3FY25: 81”
Other income grew significantly in the final quarter, primarily driven by mark-to-market gains on the company's debt investment portfolio. (1 expanding across 1 engine)
“Other Income Q3FY26: 52; Q3FY25: 44”
The company maintains its pricing moat by remaining INR 0.50 cheaper than the competition for transaction charges, though it is exploring potential price hikes with the regulator. (2 stable)
“Became the First Listed Depository in Asia Pacific Region... First depository to cross the milestone 14.50+ crore demat accounts”
Income from IPOs and Corporate Actions experienced a sharp decline of 56.9% in Q4 FY25 compared to the previous quarter, indicating a significant slowdown in primary market activity. (2 contracting, 3 expanding across 2 engines)
“IPO / CA Income Q3FY26: 59; Q3FY25: 58”
See the full cited Business Model analysis of C D S L
Where does growth come from?
The number of companies (issuers) using CDSL services is accelerating, with a sharp jump to 24,858 in Q1FY25, up from 23,060 in the previous quarter, driving recurring annual income. (5 accelerating across 5 signals)
“NUMBER OF ISSUERS ... Q3FY26 46,271”
Technology spending has seen a significant jump to handle higher market volumes and new settlement cycles, with annual tech costs rising 65% year-on-year. (5 accelerating across 5 signals, 2 leading indicators)
“Introduction of Direct Pay-out of Securities in investor’s demat account”
Management indicates that while they do not disclose regulatory correspondence, they anticipate a potential issuer fee hike at an 'appropriate time' after a 10-year hiatus. (1 new trend across 1 signal)
“CDSL saw more than 75-+ lakh accounts opened during this quarter, bringing our total to 17.27 crores Demat accounts, maintaining our 80% share.”
The number of companies (issuers) registered with CDSL is accelerating, with a sharp increase of nearly 3,500 new issuers in the latest quarter alone. (1 accelerating, 1 new trend, 1 steady across 3 signals, 1 leading indicator)
“Launch of Investor App Enables BO’s to monitor Open & Margin Position across various exchanges & clearing corporations.”
CDSL is seeing a significant increase in its 'Folio' count, which represents the number of unique company-investor records it manages, reaching 33.76 crores. — Folio Count: Strong Y-o-Y growth
“The folio remains what we had disclosed in first quarter, it is 33.76 crores. ... Obviously, on a Y-o-Y basis, we are seeing very strong growth here. And it has been a function of the higher additions and the rising folios.”
See the full cited Future Growth analysis of C D S L
What could break the thesis?
Transaction charges have declined for two consecutive quarters, falling from ₹83 crore in Q2FY25 to ₹59 crore in Q3FY25, and further to ₹49 crore in Q4FY25, indicating a significant slowdown in market-linked revenue. (3 intensifying, 2 easing, 1 high-severity)
“Transactions Charges: Q3FY25 59, Q4FY25 49, Q1FY26 62, Q2FY26 59, Q3FY26 60”
IT costs increased to ₹26 crore in Q1FY26 (Consolidated) from ₹24 crore in Q2FY25, while standalone IT costs jumped to ₹26 crore from ₹18 crore in Q2FY25, showing persistent upward pressure. (4 intensifying, 1 stable, 1 high-severity)
“So, it gone from about 7% of revenue to 14%. So just looking backwards in terms of what this has enabled for us, could you give us some sort of, some KPIs in terms of success rate on transactions or capacity of transactions that CDSL is able to handle as a result of the increasing investment intensity?”
Stable to Intensifying; combined average daily turnover at BSE and NSE for December 2025 was approximately 8.3% lower than the same period in the previous year, indicating a cooling of market activity. (1 intensifying)
“And second would be, as we can see for the past 1.5 years and as a general position that there is some softness that is prevailing in the capital markets in general in terms of the general market activity and with the commodities taking over and attracting a lot of investors right now.”
Regulatory costs (SEBI/IPF) have eased slightly to ₹10 crore in Q4FY25 from ₹15 crore in Q3FY25, though they remain a recurring mandatory expense. (1 easing, 2 intensifying, 1 stable)
“SEBI/IPF: Q3FY25 15, Q4FY25 10, Q1FY26 13, Q2FY26 16, Q3FY26 15”
The pace of new account additions is decelerating sharply. Net accounts opened dropped from 118 lakhs in Q2FY25 to 92 lakhs in Q3FY25, and reached a low of 64 lakhs in Q4FY25. (3 intensifying, 2 easing)
“CDSL Net A/c opened in the quarter (in lakhs): Q3FY25 92, Q4FY25 64, Q1FY26 57, Q2FY26 65, Q3FY26 76”
See the full cited Risk analysis of C D S L
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