Central Depository Services (India) Limited — Q3 FY24
CDSL reported a strong Q3 FY24 with consolidated total income up 47% YoY to INR 236 crore and net profit up 44% YoY to INR 107 crore, driven by robust growth in demat accounts a...
bullish
high
✓ Verified against BSE filing
Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
20%Questions answered7Evaded / deflected10Questions auditedContradictedNumbers vs filing
Partial answer
High priority
Asked about year-to-date CapEx on technology, one-offs in other expenditure, and subsidiary growth drivers.
Asked by Prakash Kapadia, Anived Portfolio Managers Private Limited
Answered CapEx and gave CAS/e-voting breakups but did not address one-offs or KYC growth drivers.
did not address one-offs directlydid not explain subsidiary growth drivers
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Question
If you could give us some sense on what is the year-to-date CapEx on technology in FY 2024. Secondly, if I look at other expenditure, it is up 52% for the quarter. Any one-offs in this? And Sunil mentioned about the growth. So if I look at the subsidiary growth, the KYC business, we've seen a 50% growth in the nine months. So what has changed? Has pricing helped? Is it more volume?
Girish Amesara, CFO
We have incurred around INR 20 crore towards the capital expenditure on technology. With respect to the breakup of the other income, CAS is around INR 10 crore in this quarter. e-Voting income has achieved at INR 3 crore in this quarter.
Answered
Medium priority
Asked about MD term limits and possibility of sharing unique PAN holders.
Asked by Siddhant Dand, Goodwill
Answered directly about eligibility and process.
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Question
I just had a question about the term limits of the MD. So will you be up, you know, throwing your hat in again for the second term?
Nehal Vora, MD & CEO
The rule is that one term can be of five years and maximum of 10 years. So I am currently eligible for another term. So we'll see how the process goes.
Declined
Low priority
Asked if CDSL can share number of unique PAN holders.
Asked by Siddhant Dand, Goodwill
Declined to provide the data.
refused to share
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Question
Is it possible to share the number of unique PAN holders at some point?
Nehal Vora, MD & CEO
We don't share that as part of our public domain.
Evasive
High priority
Asked about progress on unlisted opportunity and potential revenue timeline.
Asked by Amit Chandra, HDFC Securities
Described the rule but gave no progress update or revenue estimate.
no timeline givenno quantification of potential
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Question
So my question is on the unlisted opportunity that you have spoken last time. So what's the progress on that? And, have we done any analysis based on the new rule? What is the kind of potential or the company eligible for the unlisted, and from when we can see that coming in the revenues?
Nehal Vora, MD & CEO
The law has that if there are any changes in the promoter holding or any raising, any transfer of holding or raising of capital for private companies, which are INR 40 crores in turnover or INR 4 crores in share capital, to be put out there. And that is going to come in by September of 2024. So only we'll have to see how it pans out.
Evasive
Medium priority
Asked about expense per employee being higher than competition and if investments are behind.
Asked by Amit Chandra, HDFC Securities
Did not address the cost comparison or whether investments are behind.
no comparison to competitionno forward guidance
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Question
If you see in terms of the expense per employee or our overall expenses, that is around 30%-40% higher than what the competition is doing. So is it that we are underinvested and still we have to increase our expenses overall at a higher rate? Or we can say that most of the investments are now behind and we can grow; the expenses will grow along with the revenue or index to inflation.
Nehal Vora, MD & CEO
We are like an infrastructure company. We're building like a road. So ensuring that the right kind of technology and people, these are kind of the specialized on both accounts are required. So we'll have to continue to invest in both to ensure that we get a good value proposition.
Evasive
Medium priority
Asked about other big revenue opportunities besides insurance.
Asked by Amit Chandra, HDFC Securities
Declined to identify any specific opportunities.
refused to give specificsforward-looking statement excuse
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Question
Can we identify any other areas which can be big in the coming years, or is it work in progress right now?
Nehal Vora, MD & CEO
It's a forward-looking statement, so we kind of not give a firm reply. But the overall intent is to ensure that India remains a securities market in infrastructure sophisticated and really top-notch.
Partial answer
Low priority
Asked about flat fee vs slab for Online Data Charges and discount range.
Asked by Amit Chandra, HDFC Securities
Confirmed flat fee but refused to disclose discounts.
declined to share discount range
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Question
Is there a flat fee in terms of creation and fetch for all the DPs, or is there a slab that we operate there? And what would be the range in terms of discounts that we give to the larger members there?
Sunil Alvares, MD & CEO, CDSL Ventures
We have a flat fee, but so far as discounts are concerned, we don't discuss it in the public domain.
Evasive
Medium priority
Asked about stagnant insurance repository business and lack of push.
Asked by Santosh Kesari, Kesari Finance
Did not explain why policies are stagnant or what efforts are being made.
did not address lack of growthblamed voluntary nature
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Question
Regarding CIRL, you do not seem to have the number of policies growing. And it appears that the management is not pushing very hard in terms of business penetration. Is that perception correct?
Nehal Vora, MD & CEO
It's not really mandatory for insurance policies to be converted into a demat. So, it's on a voluntary basis, so only as and when people feel the need, they would do it.
Evasive
Medium priority
Asked about cash balance and any consideration for bonus, split, or special dividend.
Asked by Santosh Kesari, Kesari Finance
Acknowledged feedback but gave no indication of action.
no commitmentdeferred to board
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Question
Any consideration from the management side on bonus or share split or any other way, special dividend?
Nehal Vora, MD & CEO
The feedback is taken. It has come through various forums. So the board will take it up at an appropriate time.
Evasive
High priority
Asked about timeline and investment needed for faster settlement (T+0).
Asked by Supratim Datta, Ambit Capital
Described process but gave no specifics on timeline or costs.
no timeline givenno investment quantification
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Question
What is the current timeline that we are working with on that, and what kind of investment or change in infrastructure would CDSL have to take to adapt to these changes?
Nehal Vora, MD & CEO
SEBI has released a public consultation paper on faster settlements. So once the comments are received, they will be deliberating internally. CDSL as part of the ecosystem is working very closely on how the entire processing will have to be done.
Evasive
High priority
Asked about opportunity size for private company demat and timing of revenue.
Asked by Swarnabh Mukherjee, B&K Securities
Gave a wide range but no concrete estimate or revenue timing.
no specific number givendeferred to September
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Question
If you could highlight, if you have done any kind of assessment that you know, how many companies would be there from, with this, you know, turnover and capital limits that you have highlighted, which could be addressed by the depositories. Overall, if you could give us the opportunity size.
Nehal Vora, MD & CEO
It is difficult to assess because the eligibility comes in by September 2024. So it could range from a few thousands to a few lakhs companies. But out of that, only those which indulge in any raising of capital or transfer of holding will be required to demat.
Partial answer
Medium priority
Asked why other revenue (ex-annual issuer, transaction, etc.) declined sequentially and grew only 5% YoY.
Asked by Hiten Jain, Invesco
Explained e-voting seasonality and gave CAS growth but did not address the 30% sequential drop in the aggregate.
did not explain sequential decline fully
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Question
That number is coming down to this quarter at INR 18.5 crores versus INR 26.6 crores previous quarter. So it's sequentially down 30%, and if I take nine months year-on-year data, it is up just 5%. So can you just help me why this segment is seeing such low growth?
Girish Amesara, CFO
e-voting income would accrue majority in second quarter. So if you compare nine months to nine months, more or less, it is almost same. CAS charges: in current nine months, we have earned an income from CAS at around INR 25 crore, and in the previous nine months, INR 17 crore.
Quantitative claims vs filed numbers
| Claim | Management said | Filing | Verdict |
|---|---|---|---|
| CAS income for the quarter is INR 10 crore. | ₹10 cr | ₹214 cr | Understated vs filing |
| e-Voting income for the quarter is INR 3 crore. | ₹3 cr | ₹214 cr | Understated vs filing |
| Pledge income for the quarter is INR 4.5 crore. | ₹4.5 cr | ₹214 cr | Understated vs filing |
| Unlisted company revenue for the quarter is INR 1.2 crore. | ₹1.2 cr | ₹214 cr | Understated vs filing |
| CAS income for nine months is INR 25 crore. | ₹25 cr | ₹214 cr | Understated vs filing |
| CAS income for prior nine months was INR 17 crore. | ₹17 cr | ₹214 cr | Understated vs filing |
Filed figures sourced from Screener.in. Claims within a small tolerance of the filing are marked “matches filing”.