C D S L — Q4 FY26 earnings call

Call held 7 May 2026

Management summary

CDSL reported a mixed Q4 and full year FY26, with standalone and consolidated total income showing growth, driven by strong demat account additions and market share. However, consolidated net profit and CVL's financial performance saw declines. The company emphasized its continued investment in technology and infrastructure to support an expanding investor base and evolving market needs, while acknowledging geopolitical uncertainties and regulatory changes impacting revenue streams like KYC charges.

Highlights

  • Standalone Total Income for FY26 reached ₹1,096 crores, up 11.27% YoY from ₹985 crores in FY25.

  • Consolidated Total Income for FY26 was ₹1,239 crores, a 3.34% increase from ₹1,199 crores in FY25.

  • CDSL's demat accounts grew to 18.01 crores as of March 31, 2026, adding over 2.7 crores accounts in FY26, maintaining an 80%+ market share.

  • Recognized with the Golden Peacock Innovative Product Service Award 2026 and as India's Best CEO of 2026 (Nehal Vora) by Business Today.

Concerns

  • Consolidated Net Profit for FY26 declined 13.50% to ₹455 crores from ₹526 crores in FY25.

  • Standalone Net Profit for Q4 FY26 decreased 14.81% to ₹69 crores from ₹81 crores in Q4 FY25.

  • CVL's revenue from operations for FY26 saw a significant decline of 21.21% to ₹182 crores from ₹231 crores in FY25.

  • CVL's Profit After Tax for FY26 dropped 49.65% to ₹55.36 crores from ₹109.95 crores in FY25.

  • Impairment cost of ₹7.62 crores recorded in Q4 FY26.

Key financials

  1. Standalone Total Income ₹1,096 Cr +11.3%YoY
  2. Standalone Net Profit ₹468 Cr +1.3%YoY
  3. Consolidated Total Income ₹1,239 Cr +3.3%YoY
  4. Consolidated Net Profit ₹455 Cr -13.5%YoY
  5. Demat Accounts ₹18.01 Cr
  6. CVL Revenue from Operations ₹182 Cr -21.2%YoY

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.

Capital allocation

medium confidence
  • Capex ₹250 Cr
    • Technology investment and fixed asset accretion ₹250 Cr
    Harshit Toshniwal: "But if I look at our today's number of run rate, INR160 crores is the cost and another INR120-INR100 crores we keep spending on the fixed asset accretion. So roughly INR250- INR240 crores is what we are effectively investing in technology on an annual basis."

What to watch in Q1 FY27

Folio count and growth

next quarter
Current 18.01 crores as of March 31, 2026
Target Updated folio count for June quarter

Why it matters

The folio count is a key indicator of CDSL's market penetration and growth, and management committed to disclosing it next quarter.

Girish Amesara: "Folio as on 31st March '26, we'll be disclosing in the earnings call for June quarter '26-'27."

Risks & concerns

  • Geopolitical developments and market volatility

    medium

    Recent geopolitical developments have added uncertainty to the global environment, influencing energy prices, capital flows, and short-term market sentiment, leading to phases of volatility in Indian markets.

    Management acknowledged

  • Competition in the depository space

    medium

    Management views competition as 'the way of life' and a driver for maintaining value proposition, but acknowledges its presence.

    Management acknowledged

  • Impact of regulatory changes on KYC revenue

    medium

    New KYC regulations have led to a reduction in fetch charges by 20% (from ₹35 to ₹28) and creation charges by 75% (from ₹20 to ₹5), potentially impacting revenue.

    Analyst acknowledged

Q&A highlights

4 direct
Technology Cost and Capacity Creation Direct
So, technology has to cope with the scale, both in terms of infrastructure, application, security and the linkages which form this. All these 4 components have to be invested in... the scalability of volumes is one aspect, but the scalability of access across depository participants having different scales themselves, it has to be up to speed and ahead of the curve to kind of ensure that the value proposition of this connectivity remains extremely high.

Analysts questioned the significant increase in technology costs and its translation into capacity. Management explained it as a strategic investment for horizontal and vertical scalability to handle 10x growth in demat accounts and evolving market needs.

Asked by Supratim Datta

Folio Count Disclosure Partial
In terms of folio increase, we will be disclosing this as per our practice as the CFO mentioned earlier, in the first quarter call of the next, financial year after the June quarter end. So, at that time, you will be able to see what our folio situation has been as compared to the previous year.

Management deferred the disclosure of the latest folio count (post FY26) to the next quarter's earnings call, indicating it's a key metric for investors to track.

Asked by Supratim Datta

Breakdown of Other Income and Specific Revenue Streams Direct
So, Amit, the investment income is subject to mark-to-market as on 31st March, and that is the main reason for the fall in investment income. In terms of consolidated account statement revenue, it is INR12.08 crores for March quarter. E-voting is INR5.58 crores and other operating income of INR3.23 crores. This is the breakup of the other income that we have provided in the investor presentation.

Analyst sought clarification on the sharp fall in other income and specific revenue figures for eCAS, pledge, and unlisted companies, which management provided, offering granular insight into revenue components.

Asked by Amit Chandra

Impact of KYC Regulation Changes on Revenue Partial
Yes. with effect from 1st of April, the fetch charges have been reduced by 20% from INR35 to INR28 and the creation charges have been reduced by 75% from INR20 to INR5... It's going to be across basically the industry. So, it is not only for CVL.

Analyst questioned the impact of new KYC regulations on fetch and creation charges, noting a significant reduction. Management confirmed the reductions and clarified it's an industry-wide change, implying potential revenue pressure.

Asked by Harshit Toshniwal

Market Share in Unlisted Companies and ISIN Issuance Direct
In respect to your second question, the market share as compared to our competition. So, there was basically the ISIN issuance, which has been exclusively given to our competition for many years. The intent is now it's going to be done by both in the near future.

Analyst probed CDSL's market share in unlisted companies and the historical exclusivity of ISIN issuance to competition. Management indicated a future change where both depositories would handle ISIN issuance, potentially leveling the playing field.

Asked by Sanketh Godha

Pricing Principles and Inflation Direct
I think the intent is that inclusion. And as we've seen in the mobile phone market, what were the charges when it started off, it's kind of become 120 or 125 of that because that scale grows, the charges go down so that there is more usage, more inclusion... We have not changed our charges for many, many years. But in terms of the structure, the SEBI approves charges where depositories are concerned.

Analyst questioned why prices haven't increased despite inflation, given operational leverage. Management explained their focus on inclusion and that charges are SEBI-approved, implying regulatory constraints on price adjustments.

Asked by Mehul Pathak

3 min read 7 chapters

Detailed narrative

Q4 FY26 and Full Year FY26 Financial Performance

CDSL reported a standalone total income of ₹1,096 crores for FY26, an 11.27% increase from ₹985 crores in FY25, with standalone net profit at ₹468 crores (up 1.30% YoY). For Q4 FY26, standalone income was ₹215 crores (up 4.88% YoY), but standalone net profit declined by 14.81% to ₹69 crores. On a consolidated basis, total income for FY26 grew 3.34% to ₹1,239 crores, while consolidated net profit decreased by 13.50% to ₹455 crores. Q4 FY26 consolidated income was ₹268 crores (up 4.69% YoY), but consolidated net profit fell 20% to ₹80 crores.

Demat Account Growth and Market Share

CDSL continued its strong growth trajectory, adding over 2.7 crores demat accounts in FY26, bringing the total to 18.01 crores as of March 31, 2026. This performance allowed CDSL to maintain an 80% plus market share, with incremental market share consistently in the 85% to 90% range. Management highlighted that the total depository industry demat accounts crossed 22.4 crores.

Strategic Technology Investments

The company emphasized its continuous investment in technology, viewing it as the 'DNA' of its business. These investments are aimed at ensuring horizontal and vertical scalability to cope with the 10x growth in demat accounts over the past six years. Approximately ₹250-240 crores are being invested annually in technology and fixed asset accretion to maintain a robust and adaptable platform for evolving market structures and regulatory developments.

Impact of KYC Regulation Changes

New KYC regulations, effective April 1, 2026, have led to significant reductions in charges. Fetch charges were reduced by 20% from ₹35 to ₹28, and creation charges by 75% from ₹20 to ₹5. Management noted this is an industry-wide change, and while it impacts revenue streams, the intent is to promote greater investor participation and inclusion.

CDSL Ventures Limited (CVL) Performance

CDSL Ventures Limited (CVL) experienced a challenging year, with revenue from operations for FY26 declining by 21.21% to ₹182 crores from ₹231 crores in FY25. Total income for CVL was ₹198.17 crores, down 22.27% YoY, and profit after tax saw a substantial drop of 49.65% to ₹55.36 crores from ₹109.95 crores in FY25. CVL is setting up a separate business unit at GIFT IFSC as the first KYC Registration Agency there.

Unlisted Companies and ISIN Issuance

CDSL aims to increase its market share in the unlisted companies segment. Historically, ISIN issuance for unlisted companies has been exclusively handled by competition. However, management stated that this is expected to change in the near future, with both depositories being able to issue ISINs, which could provide CDSL with an additional growth avenue and enhance its competitive position in this segment.

Market Reforms and Investor Education

Several key market reforms were launched, including the acceptance of Form 15G/15H (now Form 121) by both depositories and automation of demat account portability. The Securities Market Code 2025, tabled in Parliament, is a significant development aiming to consolidate the Indian securities market framework. CDSL also launched an investor education comic book in collaboration with 'Amar Chitra Katha' in 12 languages to simplify investor education.

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