CDSL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 4.2

📈 Positive

• 💹 Excellent return metrics — ROCE at 46.5% and ROE at 36.3% reflect superior capital efficiency.
• 📉 Zero debt (Debt-to-equity: 0.00) ensures financial stability and low risk exposure.
• 📈 Strong quarterly profit growth of 44.4%, with PAT rising to ₹152 Cr. from ₹80.8 Cr.
• 📊 EPS of ₹24.4 supports earnings strength and valuation justification.
• 📈 MACD at 21.2 and RSI at 57.5 indicate bullish momentum with room for upside.

⚠️ Limitation

• 📉 High P/E of 65.2 compared to industry average (55.4), suggesting premium valuation.
• 📉 PEG ratio of 3.16 implies limited growth relative to price, raising valuation concerns.
• 📉 Book value of ₹66.6 is significantly lower than market price, indicating overvaluation.
• 📉 Volume below 1-week average, suggesting reduced short-term trading interest.

📰 Company Negative News

• 📉 FII holding declined by 1.36%, reflecting foreign investor caution.
• 📉 DII holding also dipped slightly by 0.06%, indicating mild institutional pullback.

🌟 Company Positive News

• 📈 Quarterly PAT surged 44.4%, showcasing strong operational performance.
• 📈 Trading above DMA50 and DMA200 (₹1,573 and ₹1,506), confirming technical strength.

🏭 Industry

• 💼 CDSL operates in the depository services space, benefiting from rising retail participation and digitization of financial assets.
• 📊 Industry P/E of 55.4 reflects high growth expectations and strong investor interest in financial infrastructure firms.

🧭 Conclusion

• 📌 Suggested entry zone: ₹1,450–₹1,520, offering better margin of safety near DMA200.
• 🕰️ Long-term holding favorable due to zero debt, strong return metrics, and growing financial market penetration.
• ⚖️ Monitor valuation and institutional flows as key indicators for future price action.