C D S L — Q2 FY26 earnings call

Call held 3 Nov 2025

Management summary

CDSL reported a mixed Q2 FY26, with strong growth in demat accounts, adding over 65 lakh new accounts and maintaining an 80% market share. However, consolidated total income and net profit saw a YoY decline, attributed by management to the absence of significant subsidiary dividends received in the prior year. The company continues to invest in technology and regulatory initiatives, while its subsidiary CDSL Ventures also experienced a notable decline in H1 FY26 performance.

Highlights

  • CDSL added over 65 lakh accounts in Q2 FY26, bringing total demat accounts to 16.5 crore.

  • Maintained 80% market share in demat accounts.

  • Launched Nomination Phase 2 to simplify and strengthen the nomination process for investors.

  • Actively participated in World Investor Week and SEBI vs SCAM campaign to promote financial literacy.

Concerns

  • Consolidated total income for Q2 FY26 declined to INR341 crores from INR359 crores YoY, a decrease of 5.01%.

  • Consolidated net profit for Q2 FY26 decreased to INR140 crores from INR162 crores YoY, a decline of 13.58%.

  • CDSL Ventures (CVL) H1 FY26 total income decreased to INR92.84 crores from INR144.41 crores YoY, a decline of 35.69%.

  • CDSL Ventures (CVL) H1 FY26 PAT decreased to INR27.09 crores from INR66.48 crores YoY, a decline of 59.25%.

Key financials

2 periods

Q2 FY26

  • Consolidated Total Income
    ₹341 Cr
    YoY -5%
  • Consolidated Net Profit
    ₹140 Cr
    YoY -13.6%
  • Standalone Total Income
    ₹290 Cr
    YoY -10.5%
  • Standalone Net Profit
    ₹128 Cr
    YoY -25.1%

H1 FY26

  • Consolidated Total Income
    ₹637 Cr
    YoY -1.2%
  • Consolidated Net Profit
    ₹242 Cr
    YoY -18.2%
  • Standalone Total Income
    ₹602 Cr
    YoY +11.1%
  • Standalone Net Profit
    ₹280 Cr
    YoY +1.5%

What they filed

Q1 FY27: revenue up 13.1%, net profit up 15.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue322 278 224 259 319 −1%304 +9%263 +17%293 +13%
EBITDA200 161 109 130 176 −12%160 −1%116 +6%138 +6%
Net profit162 130 100 102 140 −14%133 +2%80 −20%118 +16%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • CDSL Ventures Limited (CVL)
    ₹92.84 Cr Total Income (H1 FY26)₹35.82 Cr PBT (H1 FY26)₹27.09 Cr PAT (H1 FY26)

What to watch in Q3 FY26

LIC Integration Go-Live

Next quarter (Q3 FY26)
Current Expected to go live in November 2025
Target Successful integration and impact on Insurance Repository numbers

Why it matters

LIC integration is a significant event expected to boost the Insurance Repository business.

LIC integration is expected to go live in November. So we expect some numbers to increase from there.

Risks & concerns

  • Decline in Consolidated and Standalone Profitability

    medium

    Consolidated net profit down 13.58% YoY for Q2 FY26, standalone net profit down 25.15% YoY for Q2 FY26, though management attributes this to the absence of subsidiary dividend in the current year.

    Analyst acknowledged

  • Declining Incremental Demat Account Market Share

    medium

    Incremental market share for demat account additions declined from 93% to 82%, but management emphasized absolute growth and a long-term perspective, suggesting it's a relative number.

    Analyst downplayed

  • Competition in KYC Services

    low

    KFintech has started operations, and some Fintech brokers have joined them, but CDSL has not seen any material impact to date.

    Analyst downplayed

Q&A highlights

6 direct, 1 evasive
IPO/Corporate Action Income Split Evasive
The first number, we don't give it out in the public domain.

Analyst sought granular detail on revenue streams, but management declined to provide it, indicating a lack of transparency on specific income components.

Asked by Lalit Deo

Competition in KYC Business Direct
I mean if you are referring to KFintech, they have just started operation. And we have not really seen any impact as on date. I believe they have also stated that some of the Fintech brokers have joined them.

Analyst inquired about competitive threats in the KYC segment, and management acknowledged a new entrant (KFintech) but stated no material impact yet, providing insight into the competitive landscape.

Asked by Lalit Deo

Annual Issuer Charges & Unlisted Market Share Direct
So, Amit, the annual issuer charges normally are raised in the first quarter of the financial year to all the companies which are admitted till 31st of March based on the process that we follow every year, which is as per the SEBI circular. ... So, in this quarter, we have admitted 3,593 unlisted companies, and that has accrued the relevant income in our annual issuer charge.

Clarified the timing and source of annual issuer charge revenue, explaining sequential flatness and the contribution from new unlisted companies.

Asked by Amit Chandra

Technology and Employee Cost Growth Direct
we are constantly in an endeavor that human resource and technology are the two core inputs or reasons for our business and creating the value proposition on both sides is very, very critical. So, we have been embarking on a journey to ensure that our technology sophistication and our technology advancement would reach a state which ensures that it creates that value propositions for all the new players which are coming in.

Management justified sustained high growth in technology and employee costs as essential investments for future growth, competitive advantage, and regulatory compliance.

Asked by Amit Chandra

KYC Income Restatement Direct
So earlier in our presentation, we were providing the only online data charges on CDSL Ventures Limited. Now we have included other KRA income as well in this category, like KYC income, esign income and other.

Explained a reclassification in reporting, providing clarity on the composition of KYC-related revenues and indicating a more comprehensive reporting approach.

Asked by Devish Agarwal

Incremental Demat Account Market Share Decline Partial
We've not been losing market. See, again, you have to look at the absolute numbers. Percentage is basically a relative number. So, what is the total accounts which have been opened?, you have to see the absolute numbers which are getting opened between quarter-to-quarter. It has steadily been on an increase.

Analyst highlighted a decline in incremental market share from 93% to 82%, but management downplayed its significance by focusing on absolute account growth and a longer-term perspective, leaving some ambiguity about competitive dynamics.

Asked by Devish Agarwal

Online Data Charges Revenue vs. New Demat Accounts Direct
So, see, when the accounts are opened, that shows the number of new people coming into the fold. But there could be multiple transactions which happen, which includes pledge transactions. It includes your actual buy and sell transactions. And each one is recorded as a revenue. So, it depends on the market activity in that quarter, which determines what the total income from that market-driven activity constitutes.

Clarified that online data charges revenue is not solely correlated with new demat account openings but also influenced by various market activities and transactions, providing a more nuanced understanding of this revenue stream.

Asked by Rohan Narkar

Insurance Repository Business Growth Outlook Direct
With reference to the current half yearly closing, we have signed up two new customers. LIC integration is expected to go live in November. So we expect some numbers to increase from there. As far as the numbers of insurance accounts opening is concerned, we are actually reflecting the industry numbers. ... But still, we have shown a 30% growth vis-a-vis last year.

Provided an update on the Insurance Repository business, including new customer acquisitions, upcoming LIC integration, and historical growth, outlining potential drivers for future growth.

Asked by Sanketh Godha

3 min read 7 chapters

Detailed narrative

Q2 FY26 Financial Performance Overview

CDSL reported a consolidated total income of INR341 crores for Q2 FY26, a 5.01% decline from INR359 crores in Q2 FY25. Consolidated net profit also decreased by 13.58% to INR140 crores from INR162 crores YoY. On a standalone basis, Q2 FY26 total income was INR290 crores (down 10.49% YoY) and net profit was INR128 crores (down 25.15% YoY). Management noted that the previous year's profits included significant dividend contributions from subsidiaries (INR47.5 crores in Sep 2024 quarter and INR62 crores in Jun 2025 quarter), which were absent this year, making current year's core operational profit relatively stronger.

Demat Account Growth and Market Share

CDSL continued its strong growth in demat accounts, adding over 65 lakh new accounts in Q2 FY26. This brought the total number of demat accounts to 16.5 crore, with CDSL maintaining an 80% market share. While the incremental market share for demat account additions saw a decline from 93% to 82%, management emphasized focusing on absolute growth and a long-term perspective rather than relative percentages.

Subsidiary Performance: CDSL Ventures (CVL)

CDSL Ventures Limited (CVL) experienced a significant decline in its H1 FY26 performance. Total income for H1 FY26 was INR92.84 crores, down 35.69% from INR144.41 crores in H1 FY25. Profit After Tax (PAT) for CVL also decreased substantially by 59.25% to INR27.09 crores from INR66.48 crores in the previous year.

Annual Issuer Charges and Unlisted Market

Annual issuer charges are typically raised in the first quarter of the financial year based on admissions up to March 31st, as per SEBI circulars. In Q2 FY26, CDSL admitted 3,593 unlisted companies, contributing to the annual issuer charge income. The unlisted market share currently stands at 30% to 32%. The ISIN system for unlisted securities is currently under testing between depositories, with management hopeful for a level playing field once it goes live.

Technology Investments and KRA Services

CDSL continues to prioritize investments in technology and human resources, viewing them as critical for business growth and creating value propositions for new market players. The company clarified a reclassification in its KYC income reporting, now including all KRA-related income (like eSign, eKYC/CKYC, GSP services) under this category, rather than just online data charges. Management stated that they have not seen any material impact from new competitors like KFintech in the KYC segment.

Insurance Repository Business Update

In the Insurance Repository business, CDSL signed up two new customers in the current half-year. The integration of LIC is expected to go live in November, which is anticipated to boost numbers. Despite a general decrease in policies issued by IRDA, CDSL's Insurance Repository business showed a 30% growth YoY. Future growth is expected to come from the online portal and the broking channel, in addition to existing insurance company partnerships.

Regulatory Initiatives and Investor Education

CDSL launched Nomination Phase 2, an enhancement designed to simplify and strengthen the nomination process for investors, aligning with its commitment to investor protection. The company actively participated in the World Investor Week and the SEBI vs SCAM campaign, promoting financial literacy and awareness about fraud prevention, emphasizing that an informed investor is a protected investor.

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