CDSL Share price: Anand Rathi maintains BUY rating, revised target price of Rs 960 per share

In its latest report, Anand Rathi said that CDSL has announced a strong set of numbers for the quarter under review with revenue growth of 72.1% yoy to Rs 1030 mn on a reported basis. The company reported healthy revenue growth led by record number of new investor accounts, during Q4-FY21 the company added 4.50 mn investor accounts taking the total number of investor accounts to 33.4 mn as on March 2021.

CDSL also provides value added services such as facilitating annual general meetings through video conference, email updation, e-DIS for electronic instruction platforms stock brokers / depository participants, e-voting, m-voting, e-CAS, SMS alerts, etc. On profitability front, the EBITDA from operations for the quarter improved by 145.7% yoy at Rs 633 mn with an operating margin of 61.5%. The company achieved the reported PAT of Rs 517 mn, a growth of 80.9% yoy with a net margin of 50.1% translating into EPS of Rs 4.95 per share for the quarter, says Anand Rathi.

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CDSL has three subsidiaries CDSL Ventures Ltd. (CVL), CDSL Insurance Repository Ltd. (CIRL), CDSL Commodity Repository Ltd. (CCRL) having strong business, which contributes to the strength of the company. q CVL is the first and the largest KYC Registration Agency (KRA) in the country with over 28.1 million fully digitised KYC records as on March 2021. CVL provides eKYC services, esign services, facilitates intermediaries to upload their KYC records in the CKYC, providing validation of Aadhar & PAN, online account application software, undertaking SEBI special projects. CVL is also a leading GST Suvidha provider, explains Anand Rathi.

CIRL is an Insurance Repository and has 0.60 million e-insurance accounts. CCRL operates under the regulatory authority of warehouse development and regulatory authority, it has 3258 registered warehouses. The board of directors recommended a final dividend of Rs 9 per share. Within financial assets, the allocation towards equities has been rising as retail investors have usually been under-invested in equities. CDSL stands to benefit with growth in capital markets. Also, increasing thrust on digital account opening & online initiatives create further optimism. 

Anand Rathi says it has maintained a BUY rating on the stock with a revised target price of Rs 960 per share.