Buy Central Depository Services; target of Rs 1180: ICICI Direct

Buy

ICICI Direct's research report on Central Depository Services

Depositories remain a structural play on India’s capital markets, buoyed by higher retail participation and distinguished by a mix of annuity and transaction-based business. Central Depository Services (CDSL) benefits from: 1) its leadership (in a duopoly industry) in terms of number of demat accounts (market share at 80%, as of Feb’26 [calculated as per data on website]); 2) steady non-market-linked revenue from annuity issuer charges, plus others like corporate actions; and 3) traction from market-linked revenue segments like cash delivery, company listings and KYC. However, continuous investments through costs have led to a decline in margins and rate cuts have led to likely lower earnings growth in the KYC subsidiary. Maintain HOLD.

Outlook

Maintain HOLD; TP revised to INR 1,180 (earlier INR 1,500), based on 40x FY28E core EPS of INR 26.6.

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Central Depository Services - 1203026 - icici