CDSL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | CDSL | Market Cap | 26,585 Cr. | Current Price | 1,272 ₹ | High / Low | 1,829 ₹ |
| Stock P/E | 55.4 | Book Value | 67.4 ₹ | Dividend Yield | 0.98 % | ROCE | 46.5 % |
| ROE | 36.3 % | Face Value | 10.0 ₹ | DMA 50 | 1,295 ₹ | DMA 200 | 1,398 ₹ |
| Chg in FII Hold | -1.04 % | Chg in DII Hold | -0.70 % | PAT Qtr | 120 Cr. | PAT Prev Qtr | 128 Cr. |
| RSI | 46.8 | MACD | 17.3 | Volume | 24,29,730 | Avg Vol 1Wk | 16,57,264 |
| Low price | 1,116 ₹ | High price | 1,829 ₹ | PEG Ratio | 2.69 | Debt to equity | 0.00 |
| 52w Index | 21.8 % | Qtr Profit Var | 14.3 % | EPS | 23.0 ₹ | Industry PE | 43.8 |
📊 Financials: CDSL demonstrates strong profitability with ROE at 36.3% and ROCE at 46.5%, supported by EPS of ₹23.0. Debt-to-equity is 0.00, highlighting a debt-free balance sheet. However, quarterly PAT declined from ₹128 Cr. to ₹120 Cr. (-14.3%), showing short-term earnings pressure.
💹 Valuation: The stock trades at a P/E of 55.4, above the industry average of 43.8, indicating premium valuation. Book value of ₹67.4 results in a high P/B of ~18.9. PEG ratio of 2.69 suggests growth is already priced in. Intrinsic value appears lower than current levels, requiring cautious entry.
🏢 Business Model: As a leading depository, CDSL benefits from rising retail participation and digital adoption in capital markets. Its competitive advantage lies in debt-free operations, high efficiency ratios, and strong market positioning. Institutional sentiment is cautious, with FII holdings down (-1.04%) and DII holdings down (-0.70%).
🎯 Entry Zone: Safer entry between ₹1,150–1,220, closer to support levels and below DMA averages. Long-term investors may hold for 3–5 years, with exit considerations if ROE falls below 30% or earnings growth slows further.
Positive
- High ROCE (46.5%) and ROE (36.3%).
- Debt-free balance sheet ensures financial stability.
- EPS of ₹23.0 supports earnings visibility.
- Strong industry positioning in capital market infrastructure.
Limitation
- High P/E (55.4) vs industry average (43.8).
- PEG ratio of 2.69 indicates premium valuation.
- Quarterly PAT declined (-14.3%).
- Institutional holdings decreased (FII -1.04%, DII -0.70%).
Company Negative News
- Decline in institutional holdings and stretched valuations indicate cautious sentiment.
Company Positive News
- Debt-free status strengthens balance sheet.
- Strong ROE and ROCE highlight operational efficiency.
Industry
- Capital market infrastructure sector remains resilient with rising retail participation and digital adoption.
- Industry P/E at 43.8 suggests CDSL trades at a premium.
Conclusion
✅ CDSL is a fundamentally strong company with excellent profitability and zero debt. While valuations are expensive, entry near ₹1,150–1,220 offers safety. Holding for 3–5 years could yield solid returns if earnings growth sustains and institutional confidence stabilizes.