01 — At a Glance
The Tollgate of Dalal Street is Having a Rough Quarter
- 52-Week High / Low₹1,829 / ₹1,047
- Q3 FY26 Revenue₹304 Cr
- Q3 FY26 PAT₹133 Cr
- Q3 FY26 EPS₹6.38
- Annualised EPS (Q1+Q2+Q3 avg ×4)₹24.0
- Book Value₹83.4
- Price to Book14.6x
- Demat Accounts (CDSL)17.27 Cr
- Market Share (Demat)80%
- Assets in Custody₹85 L Cr
The Auditor’s Opening Remark: CDSL is the kind of company that makes money every time an Indian opens a demat account, buys a stock, pledges shares, or votes in an AGM. Q3 FY26 revenue of ₹304 crore grew 9.4% YoY. PAT came in at ₹133 crore — up 2.5% YoY, which sounds fine until you realize the stock has dropped 20% in 3 months and is sitting at a P/E of 53x. Meanwhile, 17.27 crore Indians trust CDSL to hold their shares. Their subsidiary CVL (the KRA business) is having a genuinely terrible year. And the market has been soft — combined average daily turnover was down ~8.3% YoY in December 2025. The tollgate is intact. The traffic has slowed. The P/E hasn’t gotten the memo.
02 — Introduction
India’s Most Inescapable Business That Nobody Talks About at Parties
Let us introduce you to the most quietly dominant company in Indian capital markets. Central Depository Services Limited — CDSL — is the reason your demat account exists. Not your broker, not your trading app, not that YouTube channel that convinced you smallcaps were free money. CDSL. They are the digital vault where every share certificate in the country lives in electronic form. And they charge rent. Cleverly. Constantly. At scale.
Think of CDSL as a massive digital locker service, except the lockers hold your Infosys shares, your government bonds, your mutual fund units, and approximately seven Adani stocks you bought in 2021 and haven’t looked at since. Every time something happens with those holdings — a transfer, a pledge, a corporate action, an annual meeting e-vote — CDSL makes money. Quietly. Predictably. Almost annoyingly so.
The business has 17.27 crore demat accounts and 80% market share. That’s eight out of every ten demat accounts in India sitting on CDSL infrastructure. The only competitor is NSDL, which handles the remaining 20% and has managed to stay relevant mostly because certain institutional types prefer its older, grumpier interface.
Q3 FY26 (quarter ended December 2025) delivered ₹304 crore in revenue and ₹133 crore in PAT. The revenue grew, the standalone depository did well, but the consolidated picture was dragged by CVL — the KYC Registration Agency subsidiary — which saw profits collapse. The stock, meanwhile, has fallen 20% in the past three months because markets were soft, algo traders traded less, and someone somewhere decided 53x P/E was too much for a monopoly-adjacent infrastructure play. As if logic ever governed P/E multiples in India.
Concall Gem (Feb 2026): Management described CDSL as “similar to basically an infrastructure company” and “similar to a road.” Except roads don’t have a 42% ROCE. And roads don’t have 80% market share. And roads definitely don’t have a P/E of 53x. But sure. A road. We respect the humility.
03 — Business Model: WTF Do They Even Do?
They Hold Your Shares. Then They Charge You for Breathing Near Them.
The business model is elegant in its simplicity, and infuriating in how good it is. CDSL is one of only two depositories in India — CDSL and NSDL — which means SEBI has essentially gifted them a regulated duopoly. You cannot operate in Indian capital markets without using one of them. Institutional investors need them. Retail investors need them. The government needs them. Your grandmother who bought 100 shares of a PSU bank in 1998 and never told anyone — yes, those shares are somewhere in a depository too.
Revenue streams are diversified across issuer fees (34% of Q2 FY26 revenue), transaction charges (17%), IPO and corporate action income (18%), online data charges (13%), and other income (17%). The smart bit: issuer income is relatively stable and less dependent on market activity, while transaction charges are the volatile, market-linked piece. When markets are hot and everyone is trading intraday, CDSL laughs all the way to its own vault. When markets cool, the issuer fees provide a cushion.
Subsidiaries add flavour. CDSL Ventures Ltd (CVL) is the largest KYC Registration Agency (KRA) in India with over 9.57 crore KYC records. CDSL Insurance Repository (CIRL) holds insurance policies electronically. CDSL Commodity Repository (CCRL) does the same for commodity assets. The mothership is profitable and cash-generating. CVL, however, is currently producing the kind of quarterly numbers that make CFOs drink heavily.
Demat Accounts17.27 CrDec 2025
Market Share80%Demat industry
Assets in Custody₹85 L CrStandalone
Registered DPs574Across 28 States
Moat Note: CDSL holds ₹85 lakh crore worth of securities in custody. That number, said out loud, is ₹85,00,000,00,00,00,000. They charge for managing this on behalf of 17.27 crore Beneficial Owners. The switching cost for any BO to move from CDSL to NSDL is effectively “why would anyone bother.” Network effects, regulatory moats, and institutional inertia doing their quiet work.
💬 Quick question: How many demat accounts do you personally own, and did you know CDSL is probably involved in all of them? Drop a comment!
04 — Financials Overview
Q3 FY26: Revenue Up, Profits Stubbornly Flat, CVL Being CVL
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