Hold National Securities Depository; target of Rs 1170: ICICI Securities

ICICI Securities research report on National Securities Depository

National Securities Depository Ltd. (NSDL) provides depository services to investors, issuers, depository participants, financial institutions, stockbrokers, custodians, clearing corporations and other market intermediaries through an integrated platform. As such, NSDL is a play on broader Indian capital markets, with a mix of recurring/transaction revenue – split 42%/58% as of FY25. Separately, it enjoys a duopoly setup, capital-light, healthy-RoE business model.

Outlook

We initiate coverage with a HOLD rating, based on 40x FY28E EPS which is similar to our CDSL’s target multiple. The high multiple (notwithstanding the recent sectoral multiple expansion) factors in the long-term relative safe compounding potential with an optionality of market share gain, especially with a new, strong management team and a fresh focus on enhancing digital capability. Positive/negative market momentum may present upside/downside risks.