The two listed depositories that quietly sit behind every demat account in India have just reported their April-June quarter results, and the numbers are giving market watchers plenty to ponder on. How has Q1 fared for NSDL and CDSL.
The question on every investor’s mind is simple – which one deserves a spot in their portfolio right now?
NSDL Vs CDSL: A closer look at Q1 numbers
NSDL’s topline jumped a sharp 66% from a year earlier, touching around Rs 520 crore, and even climbed 13% over the previous quarter. That kind of growth usually turns heads.
A large chunk of this surge came from the banking services arm, which more than doubled year-on-year, partly thanks to a one-off card onboarding project. Strip that one-time effect away, and the underlying business looks far steadier than the headline number suggests. Costs, meanwhile, rose even faster than revenue, climbing close to 92% annually, which squeezed profitability. Operating margins slipped to under 20% , down from over 30% a year ago, and net profit grew a more modest 10%.
CDSL’s quarter looked far less dramatic on paper, and that is precisely the point. Revenue rose a steady 13% year-on-year to roughly Rs 290 crore, broadly in line with what analysts had already priced in. Its core depository business, which makes up the bulk of its income, grew 11%. Expenses did rise too, largely on account of higher employee and other costs.
Profit after tax climbed 15% YoY for CDSL and jumped 47% sequentially, helped along by stronger other income from mark-to-market gains.
NSDL Vs CDSL: Motilal Oswal view after Q1
Motilal Oswal has a view on both these counters. The domestic brokerage house has kept a Neutral stance on both stocks for now.
NSDL’s target has been set at around Rs 930, implying roughly 14% potential upside, with the view being that its expanding banking services arm and a rising share of recurring depository income could support profitability over time, even if near-term costs remain elevated.
CDSL, too, carries a Neutral tag, with Motilal Oswal pointing out that its continued spending on technology and manpower could cap the extent to which it benefits from operating leverage in the near future.
Motilal Oswal noted, “With the share of recurring fees rising to 55.5% in Q1FY27 depository income, imparting greater stability to the annuity-led business model, and increasing contribution from banking services, NSDL is well positioned to benefit from operating leverage.” However, Motilal Oswal also said it has trimmed its earnings estimates because of higher operating expenses.
For CDSL, the brokerage remains cautious on valuations despite healthy profitability.
According to the report on CDSL, “Continued investments in human resources and technology for future growth could restrict gains from operating leverage.”
The brokerage estimates a revenue, EBITDA and profit after tax compound annual growth rate (CAGR) of 12%, 9% and 11%, respectively, over FY26-FY28 for CDSL.
NSDL Vs CDSL:Where do analysts see better value now?
Geetanjali Kedia, Chief Analyst at SPTulsian Investment Advisers, believes CDSL currently has an edge over NSDL, citing its stronger quarterly performance and dominant market position.
She said, “We like CDSL over NSDL, as its Q1FY27 earnings were stronger with higher sequential operating profit growth, whereas NSDL remained flat. CDSL’s PE multiple of 50x is more than NSDL’s 40x due to former’s 80% market share and better operating leverage.”
NSDL Vs CDSL: What are the charts hinting at
Beyond the balance sheets, the price charts are telling their own story. According to Jigar S. Patel, Senior Manager of Equity Technical Research at Anand Rathi Share and Stock Brokers, both stocks are currently consolidating after pulling back from recent highs.
“Both NSDL and CDSL are consolidating after correcting from their recent highs, but CDSL appears technically stronger. CDSL is trading close to its 21-day EMA and is holding firmly above the crucial Rs 1,260 support zone, indicating better price stability despite short-term weakness.”
He added that NSDL continues to trade below its 21-day Exponential Moving Average (EMA), suggesting relatively weaker momentum.
“In contrast, NSDL continues to trade below its 21-day EMA, reflecting a weaker trend and limited buying momentum. Although both stocks have subdued ADX readings, suggesting the absence of a strong trend, NSDL’s momentum indicators remain comparatively weaker.”
Patel further said CDSL faces resistance in the Rs 1,350-1,375 zone, while important support is placed around Rs 1,260 and Rs 1,180.
For NSDL, he said immediate resistance lies between Rs 830 and Rs 840, while support is seen at Rs 800 and Rs 775.
Patel said, “Overall, CDSL has a stronger technical setup and appears better positioned for a recovery once it decisively breaks above its immediate resistance, whereas NSDL still requires further confirmation before turning convincingly bullish.”
What should investors watch out for?
Both depository companies continue to benefit from India’s growing investor base and increasing demat account additions.
NSDL grew faster this quarter, but much of that growth leaned on a one-off boost, and rising costs impacted margins. CDSL grew slower but with steadier earnings and a firmer chart.
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