Experts add 'Buy' tag to CDSL shares
The company reported 1.5 mn increase in number of accounts by Jan
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EXPERTS and analysts have suggested a 'Buy' rating for Central Depository Services (India) Ltd. (CDSL) with a target price of Rs 760 per share.
Commencing operations in 1999, CDSL facilitates holding and transacting in securities in the electronic form and facilitates settlement of trades executed on stock exchanges. These securities include equities, debentures, bonds, Exchange Traded Funds, units of mutual funds, units of Alternate Investment Funds, and government securities, according to a report by research group of Anand Rathi Financial Services Limited.
Among other services, CDSL offers services to corporates, KYC services in respect of investors to capital market intermediaries, facilitates holding of insurance policies in electronic form to the policy holders and online services such as e- voting, e-Locker, etc.
CDSL enjoys strong market position as India's largest securities depository. In terms of cumulative market share of active demat accounts, CDSL has witnessed a solid growth in market share from 40 per cent in FY14 to 51 per cent in FY20. As of Jan 31, 2021, the company had 588 DPs.
Revenue of the company remains well diversified with Annual Issuer charges comprising about 34 per cent of FY20 revenues, followed by transaction charges (19 per cent), online data charges (16 per cent), IPO / Corporate action charges (10 per cent) and others (17 per cent). Notably, CDSL has high stability of revenues from the fixed annual charges collected from the registered Issuer companies and transaction-based fees received from DPs.
(Source: Anand Rathi research group)
