Central Depository Services (CDSL) continues to gain market share in the month of Oct and Nov 2018 with net beneficial owner accounts increasing to 16.5mn at the end of November 2018 compared to 16 mn at the end of 2QFY19. CDSL\u2019s strategy of consolidating its position among non- institutional investors has enabled the company to not depend on few large institutional investors. CDSL continues to focus on increasing DPs with net beneficial owner accounts at the end of November 2018 increasing to 16.5 mn from 16 mn in 2QFY19, with an incremental market share of 64% (Oct \u2013 63.2% and Nov \u2013 65.2%).CDSL\u2019s position in non-institutional (retail) investors has helped the company to spread its risk and expand its depository participants to 592 v\/s 273 for NSDL. Strong EBITDA margin (in the range of 57-58%) along with negative working capital and minimal capex requirement makes business cash rich. We expect the company to maintain healthy free cash flow and higher dividend payout.The company is venturing into digitisation of academic records, depository services to unlisted companies, insurance companies, and commodity repositories. We believe all these business will take 3-4 years to scale up and contribute meaningfully. They offer long-term growth opportunities for CDSL beyond the capital market. Read Also| Analyst Corner: Expect revenue growth of 1.8-3.2 pc for Tier 1 IT vendors in Q3 We believe CDSL is an attractive play on the capital markets growth, given its annuity based revenue stream, new growth avenues of Insurance & Academics, fixed operating costs, robust cash flow generation coupled with a strong balance sheet and stable dividend policy. Besides this, strong room to scale up, minimal capex requirement, with healthy cash flow generation, makes CDSL a long-term story. The stock has corrected in the recent past in line with other midcaps and broader indices, but at current valuation of 22.4x and 20.9x FY19E and FY20E earnings, respectively, CDSL is trading attractive given the above-mentioned reasons. Besides this, compulsory demat of unlisted firms if it materialises, will further support earnings. We reiterate our BUY rating with an unchanged target price of `290.