Buy CDSL; target of Rs 325: HDFC Securities

HDFC Securities' research report on CDSL

CDSL delivered robust performance in a challenging environment. Both revenue and margin were higher than estimate, and the company's operation is not impacted due to Covid-19. The transaction charges increased for the second consecutive quarter and KYC revenues have surged. SEBI recently allowed Aadhaar based e-KYC for account opening, which will further boost CVL-KYC volumes. CDSL continued to gain BO account market from NSDL (stood at 52.4% in April-20 vs. 48.4% in FY19).

Outlook

We value CDSL on SoTP basis by assigning 30x to FY22E core profit and adding net cash to arrive at a TP of Rs 325. Maintain BUY.

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