Neutral CDSL; target of Rs 1150: Motilal Oswal

Motilal Oswal's research report on CDSL

CDSL’s operating revenue declined 7% YoY and 19% QoQ to INR2.2b (7% miss), primarily due to a 36%/29% YoY decline in transaction revenue/online data charges. For FY25, the company’s revenue grew 33% YoY to INR10.8b. EBITDA declined 26% YoY and 32% QoQ to INR1.1b (10% miss), resulting in an EBITDA margin of 48.7% (vs. 61.4% in 4QFY24 and 57.8% in 3QFY25). For FY25, its EBITDA grew 28% YoY to INR6.2b. Operating expenses jumped 24% YoY to INR1.2b due to a 14%/28% YoY increase in employee costs/other expenses. PAT for the quarter declined 22% YoY and 23% QoQ to INR1b (10% beat). For FY25, it grew 25% YoY to INR5.3b. PAT margin came in at 44.8% vs. 53.8% in 4QFY24 and 46.7% in 3QFY25.

Outlook

We expect CDSL to post a revenue/EBITDA/PAT CAGR of 12%/13%/13% over FY25-27. We reiterate our Neutral rating on the stock with a one-year TP of INR1,150 (premised on a P/E multiple of 35x on FY27E earnings).

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