NSDL Navigates Market Headwinds with Robust Q2 FY26 Performance

National Securities Depository Limited (NSDL), a pivotal market infrastructure institution in India, has reported a strong and consistent performance for the second quarter of fiscal year 2026 (Q2 FY26), ending September 30, 2025. Despite facing a challenging market environment marked by a significant de-growth in incremental DEMAT accounts across the industry, NSDL demonstrated resilience, strategic foresight, and an impressive ability to capture market share. The company's consolidated total income surged by 12.2% year-on-year to ₹432.2 crore, while its Profit After Tax (PAT) witnessed a commendable increase of 14.7% year-on-year, reaching ₹110.3 crore. This performance underscores NSDL's robust business model and its unwavering commitment to technological innovation and investor protection.

NSDL's operational performance in Q2 FY26 highlights its ability to outperform industry trends. While the broader market experienced a substantial de-growth of nearly 40% in incremental DEMAT account additions, NSDL successfully grew its total DEMAT accounts to over 4 crore, with an incremental run rate of 4.9%. This stellar performance translated into a sharp rise in its incremental market share, which climbed to 17.6% in Q2 FY26 from 9.9% in the same period last year. This indicates NSDL's strong competitive positioning and its success in attracting new investors. Furthermore, the company solidified its leadership in the unlisted issuer equity segment, achieving a 73% market share and onboarding over 1 lakh issuers onto its network, reflecting deep engagement across corporate ecosystems.

Strategic Initiatives and Technological Edge

NSDL's growth is underpinned by its continuous focus on technology and process innovation. The company has rolled out several key digital initiatives, including the successful migration to the common contract note regime on its STEADY platform, which consolidates trades across exchanges for easier reporting. It also integrated proxy advisory recommendations within its e-voting system to boost retail investor engagement and launched an enhanced SPEED-e application offering a consolidated view of an investor's entire portfolio. Recently, NSDL introduced a Common Application Form (CAF) platform to simplify and speed up the onboarding process for Foreign Portfolio Investors (FPIs) and Foreign Venture Capital Investors (FVCIs).

Management emphasized that technology spending is strategically directed towards improving cybersecurity, enhancing capacity, refining customer experience, and increasing automation. They candidly acknowledged historical underinvestment in technology, signaling a proactive approach to future-proofing the business. Upcoming initiatives include the operationalization of nomination options allowing up to 10 nominations per DEMAT account and the introduction of systematic transfer and withdrawal plans in DEMAT form for mutual funds.

Subsidiary Performance and Future Outlook

NSDL's wholly-owned subsidiaries have also contributed significantly to its strong performance. NSDL Payments Bank has achieved remarkable milestones, crossing 3 million customers and witnessing over 100% growth in CASA (Current Account Savings Account). Its inclusion in the second schedule of the RBI Act further elevates its operational capabilities and regulatory stature. The bank's UPI acquisition business is also gaining significant traction, contributing to sustainable revenue growth. NSDL Database Management Limited continues to manage approximately 13.62 million dematerialized insurance policies and 19.3 million KYC records for over 1,800 SEBI-registered intermediaries.

While the company expects the run rates for unlisted issuer additions to slow down as the market matures, it remains optimistic about sustaining the growth momentum from its payments bank and UPI acquisition businesses. NSDL's management is committed to maintaining its incremental DEMAT account market share within the 70-72% range, plus or minus 2%. The company's robust capital position, cash-generating ability, and strong operating margins position it well to benefit from the structural expansion of Indian capital markets and continued digital transformation.

Conclusion: Sustained Growth and Strategic Clarity

NSDL's Q2 FY26 results reflect a company that is not only navigating challenging market conditions with agility but also strategically investing for long-term growth. The focus on technological innovation, enhanced customer experience, and the strong performance of its subsidiaries underscore NSDL's commitment to its role as a key market infrastructure institution. With clear strategic priorities and a disciplined approach to capital allocation, NSDL appears well-positioned to continue its trajectory of sustained growth and value creation for its stakeholders.