Shares of Central Depository Services (India) Ltd. (CDSL) experienced a sharp decline of nearly 10% on Monday, January 27, 2025, following the release of disappointing third-quarter financial results.
The stock plummeted by 9.45%, reaching an intraday low of ₹1,358.35, marking its lowest point in over three months.
The decline in CDSL’s share price was primarily attributed to a significant drop in total income, which fell by 26.27% year-on-year to ₹298 crore for the December 2024 quarter.
This figure was a stark contrast to the ₹404 crore reported in the same period last year.
While the company’s net profit rose by 21.49% to ₹130 crore compared to ₹107 crore a year ago, it still fell short of market expectations and represented a 38% decrease from the previous quarter’s profit of ₹171 crore.
Analysts noted that the number of new demat accounts opened during the quarter was particularly concerning, with only 92 lakh accounts registered—down from 1.18 crore in the preceding quarter.
This marked the lowest new account additions since the December quarter of FY24, raising alarms about investor engagement and market activity.
The disappointing earnings report has led to mixed reactions among analysts. Out of ten analysts covering CDSL, six maintain a “hold” rating on the stock, while two have rated it as a “buy” and two as a “sell.”
Concerns over CDSL’s operational strategies and the impact of increased investments in technology and human resources on profit margins have also been highlighted.
As trading volumes surged—more than doubling the one-month average—investors reacted swiftly to the news, leading to a broader sell-off in related capital market stocks such as 360 One WAM and Angel One.
In light of these developments, market observers will be closely monitoring CDSL’s performance in upcoming quarters to determine whether this downturn is a temporary setback or indicative of deeper issues within the company’s business model.
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