NSDL Q2 operating revenue rises 11.6% as margins narrow

NSDL reported revenue from operations of ₹227.8 crore in Q2 FY27, up 11.6% year on year, while total expenses rose 22.5% to ₹118.1 crore. Technology-related expense increased 52.2% to ₹32.4 crore, and operating margin declined to 48.1% from 52.8% in Q2 FY26.

How did NSDL’s Q2 FY27 revenue perform?

NSDL’s revenue from operations increased 11.6% year on year to ₹227.8 crore in Q2 FY27 from ₹204.2 crore in Q2 FY26. It also rose 25.1% from ₹182.2 crore in Q1 FY27. Total income, including other income, reached ₹279.8 crore, up 11.7% year on year and 27.4% sequentially.

Other income was ₹52.0 crore in Q2 FY27, compared with ₹46.4 crore in Q2 FY26 and ₹37.5 crore in Q1 FY27. This represented growth of 12.1% year on year and 38.7% quarter on quarter. Other income accounted for the difference between Q2 FY27 total income of ₹279.8 crore and revenue from operations of ₹227.8 crore.

Which NSDL revenue streams drove Q2 FY27 operating income?

NSDL’s annual custody fee was its largest disclosed operating-income component in Q2 FY27 at ₹101.8 crore, up 14.5% from ₹88.9 crore in Q2 FY26. The fee increased 0.8% sequentially from ₹101.1 crore in Q1 FY27. It includes annual fees charged to listed and unlisted companies, mutual funds, depository participants and the Distributed Ledger Technology platform.

Recurring fees represented 44.7% of NSDL’s Q2 FY27 operating income, compared with 43.6% in Q2 FY26, while non-recurring fees accounted for 55.3%, compared with 56.4%. CA/IPO income rose 24.2% year on year to ₹36.5 crore, and e-voting income increased 10.2% to ₹31.9 crore. Other transaction charges declined 12.4% to ₹25.0 crore.

The sequential increase was concentrated in CA/IPO and e-voting income. CA/IPO income rose 93.1% from ₹18.9 crore in Q1 FY27, while e-voting rose 258.3% from ₹8.9 crore. Settlement fees increased 4.4% to ₹15.5 crore, whereas pledge fees were ₹17.2 crore, down 0.3% from Q1 FY27.

Why did NSDL’s operating margin decline in Q2 FY27?

NSDL’s operating margin declined to 48.1% in Q2 FY27 from 52.8% in Q2 FY26 as total expenses grew faster than revenue from operations. Expenses rose 22.5% year on year to ₹118.1 crore, compared with the 11.6% increase in operating revenue. Operating profit therefore increased 1.8% to ₹109.7 crore from ₹107.7 crore.

Technology-related expense rose 52.2% year on year to ₹32.4 crore from ₹21.3 crore, and increased 17.6% from ₹27.6 crore in Q1 FY27. Employee benefits expense increased 22.3% to ₹35.1 crore, while depreciation and amortisation expense rose 51.6% to ₹9.8 crore. The contribution to the investor protection fund increased 4.6% to ₹5.7 crore.

Other expenses were ₹35.1 crore in Q2 FY27, 1.8% above ₹34.5 crore a year earlier and 31.5% above ₹26.7 crore in Q1 FY27. Earnings before interest, tax, depreciation and amortisation, or EBITDA, increased 6.8% to ₹171.6 crore. Its margin declined to 61.3% from 64.1% in Q2 FY26.

How did NSDL’s profit and first-half results compare?

NSDL’s profit after tax, or PAT, increased 5.2% year on year to ₹126.7 crore in Q2 FY27 and rose 42.1% from ₹89.1 crore in Q1 FY27. Profit before tax increased 4.9% from ₹154.1 crore to ₹161.7 crore. PAT margin was 45.3%, below 48.1% in Q2 FY26 but above 40.6% in Q1 FY27.

For H1 FY27, NSDL reported revenue from operations of ₹410.0 crore, up 12.3% from ₹365.1 crore in H1 FY26. Total income grew 13.3% to ₹499.5 crore. Total expenses increased 24.3% to ₹220.5 crore, while operating profit increased 0.9% to ₹189.4 crore.

The first-half comparison shows that operating margin declined to 46.2% in H1 FY27 from 51.4% in H1 FY26, and PAT margin declined to 43.2% from 46.0%. H1 FY27 PAT increased 6.3% to ₹215.8 crore, while earnings per share rose to ₹10.79 from ₹10.15. Technology-related expense for the half year increased 52.9% to ₹60.0 crore.

Conclusion

NSDL delivered double-digit growth in Q2 FY27 operating revenue, led by annual custody fees and higher CA/IPO and e-voting income. However, total expenses grew at nearly twice the rate of revenue from operations, limiting operating-profit growth to 1.8% and leaving operating and PAT margins below their Q2 FY26 levels.

The presentation does not disclose an expense target, management plan or scheduled event. The unresolved point in its H1 FY27 results is whether growth in annual custody fees, which rose 21.9% to ₹202.9 crore, can continue alongside technology-related expense, which increased 52.9% to ₹60.0 crore.