CDSL Shares Tank 5% After Q1 Earnings Miss: NSDL IPO Adds Pressure; What Should Investors Do? BUY/SELL/HOLD

CDSL share price took a sharp hit on Monday, July 28, sliding over 5% in intraday trade. The stock declined after the company reported a disappointing set of earnings in Q1 FY26 on Saturday, July 26, along with growing market excitement for the upcoming NSDL IPO, which is its direct rival in the depository services space.

CDSL Share Price Today

As of 3:00 PM, CDSL shares were trading 5.4% lower at Rs. 1,527.70 apiece on the NSE. Over the last five trading sessions, the stock has declined by approximately 12.5% and is down nearly 14% so far this month. Despite the recent correction, CDSL shares remain up by around 47% from their 52-week low.

"CDSL has slipped below its recent support of Rs. 1,540, signaling near-term weakness. Support is now placed at Rs. 1,500, and a breakdown may extend the decline to Rs. 1,470. Resistance remains strong near Rs. 1,550, and sentiment will stay cautious unless this level is reclaimed." said Riyank Arora, technical analyst at Mehta Equities.

CDSL Q1FY26 Results Highlights

CDSL Q1FY26 results showed continued margin pressure, as the depository reported a 23.6% year-on-year decline in net profit, which fell to Rs. 102.4 crore from Rs. 134 crore in Q1FY25.

Despite this, revenue from operations rose marginally by 0.6% to Rs. 259 crore, compared to Rs. 257.4 crore in the same quarter last year. However, rising operational costs took a toll on profitability.

EBITDA dropped 15.1% to Rs. 130.6 crore from Rs. 154.4 crore, while EBITDA margins narrowed sharply to 50.4%, down from 60% YoY.

This marks the second consecutive quarter of profit decline because of the impact of rising expenses and shrinking margins on CDSL's financial performance. In the previous Jan-to-March quarter, Q4FY25, CDSL had already seen total income dip to Rs. 255.78 crore vs. Rs. 267.37 crore YoY, while expenses jumped to Rs. 129.40 crore vs. Rs. 100.93 crore.

NSDL IPO vs CDSL

The market is also closely watching the NSDL IPO, scheduled to open for subscription on July 30. NSDL, India's oldest and largest depository, has a wider physical reach and larger market infrastructure than CDSL. Its IPO GMP is already soaring at around Rs. 135, due to high investor interest and potentially intensifying competition for CDSL.
As of now, CDSL has 18,918 service centres, while NSDL operates through 65,391 depository participant centres, giving it a scale advantage.

CDSL Share Price Outlook: Hold, Sell, or Buy?

While some believe CDSL stock could face near-term volatility due to earnings pressure and NSDL IPO impact, others see it as a long-term compounder in the financial infrastructure space.

As per Trendlyne's analyst consensus, CDSL stock carries a 'Hold' rating, with a target price of Rs. 1,446, with a potential downside of around 6% from its current trading level of Rs. 1,538.3 as of July 28, 2025. The recommendation is based on input from 10 analysts, with 3 rating it a 'Strong Buy,' 5 as 'Buy,' and 1 each as 'Hold' and 'Sell.'

Despite the recent earnings pressure, CDSL maintains strong financial metrics, including a Return on Equity (ROE) of 29.9% and Return on Capital Employed (ROCE) of 37.5%, both among the highest in the industry. However, its PE ratio of 65 is above the industry median, and the PEG ratio of 20.7 signals a potentially overvalued stock relative to its earnings growth.

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