CDSL shares rise 6% on volumes, stock gains 18% in 10 session; Here's why

Shares of Central Depository Services Limited, India's only listed depository, have been on a bull run in late March after hitting a low of ₹1,047. The stock gained nearly 6 per cent in trade today.

 

Central Depository Services' stock rose as much as 6.07 per cent during the day to ₹1,529 per share, the biggest intraday gain since March 18 this year. The stock trimmed gains to trade 5.8 per cent higher at ₹1,256.8 apiece, compared to a 0.08 per cent advance in Nifty 50 as of 11:10 AM. 

 

Shares of the company extended gains to their second day on Friday. Meanwhile, the stock has fallen 28 per cent this year so far, while the benchmark Nifty50 has fallen by 0.18 per cent during the same period. Since hitting a low of ₹1,047 on March 17, the stock has zoomed by nearly 18 per cent so far aided by high volumes. The stock currently trades at 2.7 times its 30-day average volume, according to Bloomberg data. 

 

During the session, the stock crossed its 50-day moving average on high trading volumes and the stock's relative strength index (RSI) was last seen at 56. The stock has risen 46 per cent during the last 12 months and has declined by 28 per cent on a year-to-date basis.  

 

 

CDSL was set up to provide convenient, dependable and secure depository services to all market participants. CDSL was initially promoted by the BSE which thereafter divested its stake to leading banks. During Friday's session, BSE stock rallied over 15 per cent after its rival  -- National Stock Exchange (NSE) -- deferred its plan to change the day of expiring of its derivatives contracts from Thursday to Monday. 

 

In an exchange filing on Wednesday, CDSL said that the market regulator observed instances of aberration in compliance with the SEBI circulars and regulations. A warning was issued after the Securities and Exchange Board of India (SEBI) conducted an onsite inspection from July 01, 2023, to June 30, 2024 and a DR site inspection from April 01, 2023, to March 30, 2024. The depository said that there is no financial impact from the inspection. 

 

Third quarter results

 

The company posted weak financial results for the third quarter of FY25 on a sequential basis. During the quarter under review, the company’s consolidated profit dropped 19.7 per cent quarter-on-quarter (Q-o-Q) to ₹130.1 crore from ₹162 crore in Q2FY25. In Q3FY25, CDSL’s revenue from operations dropped 13.7 per cent Q-o-Q to ₹278.1 crore from ₹322.3 crore reported in the previous quarter of the current fiscal year. 

 

The company’s earnings before interest, taxes, depreciation, and amortisation (Ebitda) during Q3FY25 dropped 19.6 per cent sequentially to ₹160.6 crore from ₹199.8 crore in Q2FY25. Subsequently, CDSL’s Ebitda margin or operating profit margin (OPM) contracted 420 basis points (bps) to 57.8 per cent as against 62 per cent Q-o-Q.