NSDL shares extend losses to second day on Q1 results, drop 18% after 62% post-listing rally

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The shares of National Securities Depository (NSDL) dropped nearly 4 percent on August 14, extending losses for the second consecutive session after the release of its Q1 results. The newly-listed stock has now fallen nearly 18 percent from its record high level in just three sessions.

After opening flat, NSDL shares dropped nearly 4 percent to hit an intraday low of Rs 1,161 apiece. Yesterday, the stock dropped more than 6 percent to close at Rs 1,206 apiece. This came after the company released its results for the April-June quarter of the financial year 2026.

NSDL on August 12 reported a net profit of Rs 89.63 crore for the first quarter of the financial year 2026. This marks a rise of more than 15 percent on-year from the Rs 77.82 crore reported by the newly-listed company for the same quarter last year. While the firm saw a rise in its bottom line, its expenses dropped more than 14 percent on-year to Rs 228 crore in April-June quarter of the ongoing financial year.

The firm's revenue from operations however dropped 7.5 percent on-year to Rs 312 crore in Q1 FY26. Its revenue from operations stood at Rs 337 crore in Q1 FY25. Sequentially, it fell more than 14 percent from the Rs 364 crore revenue reported in Q4 FY25.

NSDL shares had made a decent stock market debut on August 6, listing at 10 percent premium to IPO price at Rs 880 apiece on BSE. Analysts had advised investors to consider holding the stock for the long term, given NSDL’s strong fundamentals and leadership in the depository segment. The Rs 4,000-crore IPO had turned out to be a multi-bagger for some of India’s top financial institutions.

The shares of the company rallied as much as 62 percent from its listing price, and over 78 percent from its IPO price during the sharp rally, to hit an all-time high level of Rs 1,425 per share in just four sessions.

This is how the stock performed since listing:

"Post Q1FY26 result, NSDL's stock price experienced a notable correction following an exceptional initial rally after its IPO. Net profit rose 15.1% YoY to ₹90 crore, however, revenue fell 7.5% YoY to ₹312 crore and over 14% sequentially, likely due to softer capital market activity. NSDL trades at a premium PE ratio of around 72, compared to peers like CDSL at about 66, sustaining this premium will depend on consistent revenue growth in the coming quarters. For long-term investors, NSDL’s dominant position, high switching costs, and regulatory tailwinds support the story, but near-term topline softness needs monitoring," said Ajit Mishra, SVP, Research, Religare Broking Ltd.

"Long-term investors can take comfort in the fact that India's capital market infrastructure fundamentals remain robust, which indirectly optimizes real estate sentiment as liquidity confidence gets bolstered...Non-allotted investors can consider buying on dips with a horizon of 2–3 years. The listing confirms the wider demand for reliable, regulated market participants – and a welcome boost for allied industries such as housing finance and commercial property," said Siddharth Maurya, Founder & Managing Director, Vibhavangal Anukulakara Private Limited.

NSDL’s current P/E ratio currently stands at around 71.5, significantly higher than the 49 P/E ratio recorded during its debut. Its peer CDSL currently has a P/E ratio of around 66.

The valuation may appear to be stretched when compared to that of CDSL, investors are clearly willing to pay a premium for NSDL’s scale, technology backbone, and long-standing trust within the ecosystem, said Bhavik Joshi, Business Head at INVasset PMS.

"That said, prospective investors should be mindful of certain structural risks — dependence on transaction volumes, evolving investor participation patterns, and the ever-present cybersecurity and regulatory compliance requirements. In the near term, valuations may moderate if market activity slows, offering potential entry points for those who missed the IPO,” Joshi added.

Also read: NSDL shares see volatility after rally; what lies ahead?

Nitin Jain, Senior Research Analyst at Bonanza, said it is recommended for short-term and listing-gain-focused investors to book some profits. "The near-term upside may be capped after such a sharp move, and markets tend to see consolidation post a robust debut. If you are a long-term investor willing to ride out near-term volatility, NSDL remains a high-quality stock supported by rising demat penetration," he added.

Market expert Ambareesh Baliga told CNBC-TV18 that it will be ideal for IPO investors to book profits at current levels and make a shift back to CDSL. "At the IPO price, NSDL was definitely cheaper compared to CSDL but now it is expensive after the recent run-up. I think along with long investors shifting from CDSL to NSDL post listing, we have seen huge number of momentum trader getting in, which has pushed the stock higher," he said.

Sunny Agarwal of SBI Securities also told the news channel that investors focused on short-term gains should book profits after the record rally, while long term investors should consider accumulating more shares using any dip.

Also read: Our LIVE blog on stock market updates

NSDL shares later recovered some losses to close over 2 percent lower at Rs 1,180.80 apiece on August 14.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.