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One of the two depositories in India, Central Securities Depositories Ltd (CDSL), published its second quarterly reports on Monday, 1st November 2021. The earnings reports showed an impressive performance by the company in the July-September 2021 quarter as the net profit jumped 76% year-on-year (YoY) from Rs.48.87 crores in Q2 FY21 to Rs.86.06 crores in the quarter under review. On the half-yearly basis, the PAT grew 57% YoY and amounted to Rs.150.05 crores after the first half of FY22.

The total income posted by the company grew 63% YoY and stood at Rs.165.1 crores in the September quarter. CDSL had reported total income of Rs.101.17 crores in the year-ago period. On a half-yearly basis, this is a gap up by 58% YoY amounting to Rs.294.95 crores. 

The PBT (Profit Before Tax) also showed an impressive annual growth. It rose to Rs.114.80 crores compared to Rs.63.71 crores in the July-September 2020 quarter after a 80.2% YoY increase.

This stellar performance is attributed to the liquidity in the economy finding its way to the stock markets. The pandemic period has in fact seen one of the highest retail participation in the markets. The proof is in the pudding. According to official filings by CDSL, there is a jump in the number of Demat accounts opened by investors over the last 3 months too. The company said that 68 lakh new accounts were opened during the July-September 2021 quarter which was the highest number of accounts opened in any quarter. The value of securities in the Demat custody also saw a jump and amounted to Rs.35.21 lakh crores in this quarter.

Given the increase in the PAT and total income, the Earnings Per Share (EPS) also rose considerably. CDSL’s EPS grew by 76% YoY as it increased from Rs.4.67 per share to Rs.8.22 per share. 

On Monday, the stock of CDSL was trading at a gain of 2% at Rs.1382 on the National Stock Exchange. The last time that CDSL declared a dividend was on 16th May 2020 when the company declared a final dividend of Rs.4.50 per equity share.

Hits 

  • 76% YoY and 34% QoQ jump in the PAT. The PAT recorded in Q2FY22 was Rs.86.06 crores compared to Rs.48.87 crores in Q2FY21 and Rs.63.99 crores in Q1FY22
  • 63% YoY and 27% QoQ growth in the total income which stood at Rs.165.15 crores in Q2FY22 compared to Rs.101.17 crores in Q2FY21 and Rs.129.79 crores in Q1FY22
  • PAT jumped 57% YoY in H1FY22, from Rs.95.59 crores to Rs.150.05 crores
  • Total income jumped 58% YoY in H1FY22 from Rs.187.17 crores to Rs.294.95 crores
  • On a standalone basis, the growth was as follows –
  • Total income grew 62% YoY from Rs.79.15 crores to Rs.127.92 crores
  • PAT grew 80% YoY from Rs.38.06 crores to Rs.68.40 crores

Misses

  • The standalone PAT fell 6% on a sequential basis from Rs.73.13 crores in Q1FY22 to Rs.68.40 crores in Q2FY22

Management speak

Nehal Vora, the MD and CEO of CDSL said that the Indian capital markets have seen unprecedented growth due to the addition of new investors in the markets and the swarm of IPOs in the current financial year. He said that the main reason why the company has posted rock-solid growth figures is because of the ease of doing business and the secured services that the company offers focused on offering convenience to its investors.

Other things to know

Here are some important and latest updates about CDSL 

  • There are only 2 depositories in India – CDSL and NSDL.
  • The company offers the facility of holding and trading in securities on the stock exchange.
  • It also facilitates the settlement of trades and provides services to intermediaries.
  • The significant shareholders of the company include –
  • HDFC Bank
  • Canara Bank
  • BSE
  • Standard Chartered Bank
  • LIC
  • CDSL’s subsidiary, CVL is the first and the largest KYC Registration Agency (KRA) in India having more than 2 crore KYC records.
  • The company registered 4 crore Demat accounts in July 2021 becoming the first depository to do so.
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