CDSL Stock: Up 40% in 2024, Should You Buy?

CDSL shares hit 52-week high, surge 9%

CDSL Shares Surge Over 9%, Hit 52-Week High – Key Highlights

CDSL Stock: Up 40% in 2024, Should You Buy? Central Depository Services Ltd (CDSL) shares experienced a significant surge of over 9%, reaching a 52-week high of ₹1,865.40. As of the latest update, the stock was trading at ₹1,845.95. Over the past six months, CDSL shares have delivered impressive returns of over 80%, while the annual returns stand at more than 90%. The 52-week high and low for the stock are ₹1,865.40 and ₹811, respectively.

In July, CDSL made headlines by issuing bonus shares in a 1:1 ratio, a first in the company’s history, as reported by Trendlyne. Additionally, the company’s Q2 FY 2024-25 results showcased robust growth, with a 48.8% year-on-year increase in net profit, amounting to ₹162 crore. Revenue from operations surged 55.5%, reaching ₹322.3 crore compared to ₹207.3 crore in the same period last year.

Notably, CDSL became the first depository to achieve 13.5 crore registered demat accounts by September 30, 2024, adding 1.18 crore new accounts in Q2 alone.

CDSL Share Price Surges Nearly 9% to Reach 52-Week High: Expert Insights for Investors

CDSL Stock: Up 40% in 2024, Should You Buy? Central Depository Services Ltd (CDSL) saw its stock jump nearly 9%, reaching a fresh 52-week high of ₹1,865.40 during Thursday morning trade on the NSE. Despite a generally weak market, the stock opened at ₹1,740, up from the previous close of ₹1,718.60, and surged by as much as 8.5%. By 11:30 am, it was trading 7.15% higher at ₹1,841.55, marking the second consecutive day of gains following a 3.3% rise in the previous session.

CDSL’s Stock Performance

CDSL’s shares have shown remarkable performance in 2024, climbing approximately 89% year-to-date. From its 52-week low of ₹811 on March 20, the stock has surged 130% in under nine months. Since June, CDSL has consistently posted gains, including a 10% increase in December.

Why the Surge?

The company’s robust Q2 FY25 results have been a key driver. CDSL reported a nearly 49% rise in consolidated profit, with total income increasing 56% year-on-year. Revenue from IPO-related activities, corporate actions, and KYC services have been significant contributors.

Abhishek Pandya, a research analyst at Stoxbox, highlighted that CDSL added 11.8 million demat accounts in Q2, pushing its market share to 78.3%, capturing 90% of the incremental market. Management’s focus on leveraging technology for better service delivery and expanding its insurance repository market also underscores its growth potential.

Technical Analysis and Expert Opinions

Mandar Bhojane from Choice Broking noted that CDSL’s recent breakout from an ascending triangle pattern indicates strong investor confidence, suggesting potential short-term targets of ₹2,000 to ₹2,100. He recommended a stop-loss at ₹1,650 for traders seeking to capitalize on the bullish trend.

Jigar S. Patel of Anand Rathi Share and Stock Brokers pointed out the stock’s breakout from a consolidation range of ₹1,350 to ₹1,675, signaling a potential upward trend. Patel projected a target of ₹2,325 over the next few months, with pullbacks to ₹1,750 offering buying opportunities.

Conclusion

Experts believe CDSL is well-positioned for continued growth due to its technical strength and expanding market share. Investors looking for medium- to long-term opportunities may find CDSL attractive, while traders can leverage the bullish momentum with appropriate risk management.

CDSL Shares Rise 7%: Should You Invest?

CDSL Stock: Up 40% in 2024, Should You Buy? Shares of Central Depository Services Limited (CDSL) have drawn investor attention, climbing 7.28% to trade at ₹1,843.65. By 11:05 AM, the company’s market capitalization had reached ₹384.07 billion.

Key Metrics

CDSL boasts a market capitalization of approximately ₹37,516 crore and an enterprise value of ₹37,275.47 crore. It currently trades with a P/E ratio of 81.21 and a P/B ratio of 24.22. With profit growth of 33.53%, its EPS stands at ₹21.99. Notably, the company has a robust cash reserve of ₹44.62 crore and carries zero debt.

Is CDSL a Buy?

Strong Q2 Performance:
In Q2, CDSL reported a net profit of ₹162 crore, marking a 48% increase year-on-year. Revenue surged by 55.5% to ₹322.3 crore, compared to ₹207.3 crore in the same quarter last year.

Expansion Plans:
The company is looking to broaden its operations by introducing new digital services, signaling long-term growth potential.

Brokerage Recommendations

Motilal Oswal:
Motilal Oswal is optimistic about CDSL’s growth in digital transactions and services, giving a “Buy” rating with a target price of ₹1,900. It suggests a stop loss at ₹1,700.

ICICI Securities:
While highlighting the high valuation as a concern, ICICI Securities remains positive on CDSL’s long-term growth. It recommends holding the stock with a target price of ₹1,850 and a stop loss at ₹1,680.

HDFC Securities:
HDFC Securities acknowledges the current high valuation but advises long-term investors to hold the stock. Although it did not specify a target price, it recommends a stop loss of ₹1,700.

In summary, CDSL’s robust earnings and market expansion plans present a promising outlook, but investors should weigh the high valuation before making a decision.

CDSL Share Price Up 4.68%: Should You Buy, Hold, or Sell?

CDSL Stock: Up 40% in 2024, Should You Buy? Central Depository Services (India) Limited (CDSL) has seen significant movement in its share price, prompting investors to reconsider their strategies. As of December 5, 2024, CDSL’s share price stands at ₹1,799.05, up by ₹80.45 or 4.68% from the previous close. This analysis explores current market dynamics and provides insights on whether investors should buy, hold, or sell CDSL shares.

CDSL’s Performance in Today’s Market

In today’s trading session, CDSL shares opened at ₹1,740.00, up from the previous close of ₹1,718.60. The stock hit a high of ₹1,825.00 and a low of ₹1,732.70, with a trading volume of approximately 6.2 million shares and a total transaction value of ₹111,554.01 lakhs.

CDSL Financial Overview

• Market Cap: ₹37,516 crore
• Enterprise Value: ₹37,275.47 crore
• P/E Ratio: 81.21
• P/B Ratio: 24.22
• EPS (TTM): ₹21.99
• Sales Growth: 42.25%
• Profit Growth: 33.53%
• ROE: 34.18%
• ROCE: 44.48%
• Cash Reserves: ₹44.62 crore (No debt)

Recent Factors Influencing CDSL’s Share Price

1. Strong Q2 Earnings:
   CDSL reported a significant boost in revenue, driven by higher transaction volumes and increased demand for its depository services.
2. Market Expansion:
   The company is introducing new digital offerings to enhance customer engagement and improve service delivery.
3. Positive Analyst Sentiment:
   Analysts have shown optimism due to CDSL’s strategic growth initiatives and its strong market position within the financial services industry.
4. Regulatory Support:
   Ongoing regulatory backing for India’s securities market is expected to benefit key players like CDSL.

Pros and Cons of Investing in CDSL

Pros:

• Impressive sales and profit growth, highlighting operational efficiency.
• Strong position as one of India’s leading depository service providers.
• Debt-free status, providing financial stability for future growth.

Cons:

• High P/E ratio suggests the stock may be overvalued relative to its earnings potential.
• Market volatility could influence short-term performance.
• Dependence on regulatory frameworks introduces potential risks if policies change.

Analyst Recommendations

1. Motilal Oswal:
   • Recommendation: Buy
   • Target Price: ₹1,900
   • Stop Loss: ₹1,700
   • Reasoning: Expected growth from increased transaction volumes and expansion into digital services.
2. ICICI Securities:
   • Recommendation: Hold
   • Target Price: ₹1,850
   • Stop Loss: ₹1,680
   • Reasoning: High valuation concerns, but long-term growth prospects remain promising.
3. HDFC Securities:
   • Recommendation: Hold
   • Target Price: Not specified
   • Stop Loss: Around ₹1,700
   • Reasoning: Advises caution due to current valuation but sees potential for long-term investors.

Conclusion

CDSL Stock: Up 40% in 2024, Should You Buy?  CDSL’s recent share price rise reflects strong revenue growth and positive market sentiment, driven by robust earnings and expansion efforts. While its digital initiatives present a compelling case for holding shares, concerns about high valuations and market volatility should not be overlooked. Investors should carefully evaluate their risk tolerance and investment horizon before making a decision.