CDSL's Q2 FY26: Core Operations Drive Robust Performance Amidst Strategic Growth

Central Depository Services (India) Limited (CDSL) has reported a strong performance for the second quarter of Fiscal Year 2026, showcasing the strength of its core operations. The company posted a consolidated total income of INR 341 crore and a net profit of INR 140 crore. This quarter's profitability is particularly notable as it was entirely driven by core business activities, a shift from previous quarters that included significant dividend contributions from subsidiaries. This indicates a healthy and sustainable operational foundation for CDSL.

The company's revenue streams demonstrated a diversified and resilient structure. Online Data Charges emerged as the largest contributor, bringing in INR 63 crore, representing 31.34% of the total consolidated income. Annual Issuer Income stood at INR 41 crore, while Transactions Charges contributed INR 38 crore. IPO and Corporate Action Income, along with Other Income, further bolstered the overall revenue. This balanced mix underscores CDSL's ability to generate income from various facets of the capital market ecosystem, reducing reliance on any single segment.

Strategic Initiatives and Market Leadership

CDSL continues to solidify its position as a market leader, crossing 20 crore demat accounts across the industry. The company itself added over 65 lakh new accounts in the quarter, bringing its total to 16.5 crore and maintaining a dominant 80% market share. This consistent growth highlights the increasing participation of investors in the Indian securities market and CDSL's pivotal role in facilitating this expansion. Management emphasized its focus on building scalable, secure, and investor-first infrastructure, aligning with the national vision of #AtmanirbharNiveshak (self-reliant investor).

Innovation remains a cornerstone of CDSL's strategy. The company launched Nomination Phase 2, a significant enhancement aimed at simplifying and strengthening the nomination process for investors, thereby boosting investor protection and ease of access. Other notable initiatives include the introduction of Direct Pay-out of securities into investors' demat accounts, and the launch of an Investor App with unified features. This app provides a consolidated view of securities across various exchanges and clearing corporations, eliminating the need for investors to log into multiple platforms. Furthermore, CDSL rolled out an Investor Protection Fund (IPF) investor education website in 12 languages, reinforcing its commitment to financial literacy and empowerment.

Subsidiary Performance and Future Outlook

CDSL's subsidiaries are also contributing to its strategic growth. CDSL Ventures Limited (CVL), the KYC Registration Agency (KRA), continues to be the largest in the country. Centrico Insurance Repository Limited (CIRL) is expanding its reach, having signed up LIC as a new customer, with integration expected to go live in November. CIRL anticipates further growth from its online portal and the development of a broking channel, aiming to diversify its revenue streams beyond insurance companies to direct customers and brokers.

While the company's incremental market share for demat account additions saw a slight dip from 93% to 82%, management clarified that absolute account openings continue to rise. The consistent increase in technology and employee costs reflects CDSL's proactive investment in its infrastructure to support future growth and regulatory requirements. Management views these as essential inputs for creating value propositions for all new market participants. The company's average tax rate is expected to remain stable, ranging from 22% to 25%.

Concluding Thoughts

CDSL's Q2 FY26 performance underscores its resilience and strategic foresight. The company's focus on core operational strength, coupled with continuous innovation and investor-centric initiatives, positions it well for sustained growth. By enhancing its infrastructure, expanding its service offerings, and promoting financial literacy, CDSL is not just adapting to the evolving capital market but actively shaping its future, reinforcing investor trust and confidence.