⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
CDSL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.3
| Stock Code | CDSL | Market Cap | 25,782 Cr. | Current Price | 1,234 ₹ | High / Low | 1,829 ₹ |
| Stock P/E | 53.7 | Book Value | 67.4 ₹ | Dividend Yield | 1.01 % | ROCE | 46.5 % |
| ROE | 36.3 % | Face Value | 10.0 ₹ | DMA 50 | 1,320 ₹ | DMA 200 | 1,438 ₹ |
| Chg in FII Hold | 0.86 % | Chg in DII Hold | 0.94 % | PAT Qtr | 120 Cr. | PAT Prev Qtr | 128 Cr. |
| RSI | 44.2 | MACD | -39.1 | Volume | 20,27,771 | Avg Vol 1Wk | 19,64,487 |
| Low price | 1,080 ₹ | High price | 1,829 ₹ | PEG Ratio | 2.61 | Debt to equity | 0.00 |
| 52w Index | 20.5 % | Qtr Profit Var | 14.3 % | EPS | 23.0 ₹ | Industry PE | 46.1 |
📊 Financial Overview
- Revenue & Profitability: Quarterly PAT declined slightly from 128 Cr. to 120 Cr., but EPS at 23.0 ₹ remains strong. Profit variation at 14.3% indicates resilience.
- Margins & Returns: ROE at 36.3% and ROCE at 46.5% are excellent, reflecting strong efficiency and shareholder returns.
- Debt Profile: Debt-to-equity ratio of 0.00 indicates a debt-free balance sheet, ensuring financial stability.
- Cash Flow: Strong profitability and dividend yield of 1.01% highlight healthy cash generation.
💹 Valuation Indicators
- P/E Ratio: 53.7 vs Industry PE of 46.1 → trading at a premium valuation.
- P/B Ratio: Current Price 1,234 ₹ vs Book Value 67.4 ₹ → P/B ~18.3, expensive compared to industry norms.
- PEG Ratio: 2.61 → suggests valuation premium relative to growth.
- Intrinsic Value: Trading above intrinsic value, limiting near-term upside.
🏢 Business Model & Competitive Advantage
- CDSL operates as a depository, providing electronic holding and settlement of securities in India.
- Competitive advantage lies in its monopoly-like position (one of only two depositories in India), strong regulatory backing, and high entry barriers.
- Debt-free structure and high ROE/ROCE provide resilience and efficiency.
📈 Technical & Entry Zone
- Stock trading at 1,234 ₹, below 50 DMA (1,320 ₹) and 200 DMA (1,438 ₹).
- RSI at 44.2 indicates neutral-to-oversold momentum; MACD negative suggests short-term weakness.
- Entry Zone: Attractive between 1,150–1,200 ₹ for accumulation, with long-term holding potential.
✅ Positive
- Debt-free balance sheet ensures financial stability.
- Outstanding ROE (36.3%) and ROCE (46.5%).
- Monopoly-like position in India’s depository market.
⚠️ Limitation
- High P/E (53.7) and P/B (~18.3) indicate premium valuation.
- PEG ratio of 2.61 suggests overvaluation relative to growth.
- Quarterly PAT decline from 128 Cr. to 120 Cr. shows short-term weakness.
📉 Company Negative News
- No major recent negative news, but premium valuation and slight profit decline raise caution.
📈 Company Positive News
- Strong institutional confidence with FII (+0.86%) and DII (+0.94%) increases.
- Debt-free status and high efficiency metrics reinforce long-term strength.
🏭 Industry
- Depository services benefit from rising retail participation in equity markets.
- Industry PE at 46.1 indicates high valuations across the sector.
- Limited competition (only two depositories in India) provides structural advantage.
🔮 Conclusion
- CDSL shows strong fundamentals with monopoly-like positioning, debt-free balance sheet, and excellent ROE/ROCE.
- Valuation appears stretched, limiting near-term upside despite long-term strength.
- Recommendation: Accumulate in the 1,150–1,200 ₹ range for long-term holding, focusing on structural growth in India’s capital markets.