Q2 FY27 results analysis · October 31, 2026
Central Depository Services (India) Ltd (CDSL) Q2 FY27 Results Analysis: PAT Jumps 24%, KYC Fee Cut Compresses Margin
+23.9%PAT year on year, Rs. 173.30 Cr
Source: Quarterly results filing (NSE)
Quick summary
Central Depository Services (India) Ltd's Q2 FY27 numbers came in strong, with revenue of Rs. 394.48 Cr (+23.71% YoY) and PAT growth of +23.85% YoY. Here's a quick read of what worked, what to watch, and what management said.
Quick Details
| Results date | October 31, 2026 |
|---|---|
| Revenue (Q2) | Rs. 394.48 Cr (+23.71% YoY) |
| PAT (Q2) | Rs. 173.30 Cr (+23.85% YoY) |
| EPS (Q2) | Rs. 8.32 (+23.99% YoY) |
Quarter Snapshot
CDSL delivered 23.71% YoY revenue growth and 23.85% PAT growth with cost-to-income improving to 44.70% and operating margin at 55.30%, while Q2 comparisons were clean of subsidiary-dividend distortion. The main headwind is the KYC fee cut effective April 1, 2026, which compressed the Data Entry & Storage segment margin by 9.33pp YoY to 25.54%. No management guidance exists to benchmark against, but cash conversion (CFO/PAT 1.64×) and FCF of Rs.423.72 Cr underscore earnings quality.
Q2 FY27 Expectations vs Results
| Driver | Expected before results | What happened | Verdict |
|---|---|---|---|
| Revenue/demand — IPO boom + account adds | Ahead | Revenue from ops +23.71% YoY, +34.75% QoQ | Played out |
| Margins flat-to-compressing on cost pressure | "expect flat-to-compressing operating margins" | Cost-to-income 44.70% vs 51.12% Q1 / 46.11% year-ago; operating margin 55.30% — margins expanded | Contradicted |
| Other income — MTM headwind from rising yields | Headwind vs Q1 | Other income Rs.22.82 Cr vs Rs.47.74 Cr Q1 (−52.20%) | Played out |
| Transaction charges mixed | In-line to modestly ahead | Income-line split not disclosed in the filing | Not observable |
| CVL/KRA first full quarter at reduced fees | Watch revenue hold | DE&S revenue +17.89% YoY / +21.97% QoQ; margin −9.33pp YoY | Partially |
| Subsidiary dividend as the YoY PAT bridge | Key bridge | Rs.0 in Q2 both years — Q2 comparisons clean; distortion was Q1-only | Played out |
| Rs.1 Cr SEBI cybersecurity fine (web-sourced, post-quarter) | Q2 event | Not addressed anywhere in the filing | Not observable |
| Strategic investments deployed | IIBHL/ONDC/Sahamati | Standalone associate investments Rs.69.20 Cr vs Rs.50.00 Cr (+19.20, the two IIBHL tranches); confirmed in the notes to the results | Played out |
Read our full results preview.
Management Guidance vs Delivery
| What management said | What happened | Verdict |
|---|---|---|
| Technology spend "stabilized after a few quarters" (Q1 FY27 earnings call) | Consolidated tech expense +9.91% QoQ / +38.70% YoY (Rs.52.36 Cr); standalone +4.74% QoQ — decelerating but still rising | Partially confirmed |
| "The efficiency and the leverage effect of technology rollout will overtake the employee cost" (management commentary in filings/calls) | Employee cost −1.31% QoQ, but tech grew ~3.5× faster than employee cost YoY; leverage not yet visible in the cost mix | Too Early |
| KYC fee reduction would be intimated; cuts took effect April 1, 2026 (prior-quarter analyst notes / management commentary) | Data Entry & Storage margin −9.33pp YoY to 25.54% despite +17.89% revenue growth — headwind visible in the numbers | Confirmed |
Key Numbers, Quarter by Quarter
| Metric | Q1 FY26 | Q2 FY26 | Q3 FY26 | Q4 FY26 | Q1 FY27 | Q2 FY27 |
|---|---|---|---|---|---|---|
| Net demat adds (lakh) | 57 | 65 | 76 | 74 | 58 | not addressed in the filing |
| Custody (Rs. lakh Cr) | 79 | 80 | 85 | 77 | 88.2 | not addressed in the filing |
| Issuers | 39,609 | 44,011 | 46,271 | 48,103 | 49,684 | not addressed in the filing |
| ISINs | 1,05,588 | 1,13,909 | 1,20,277 | 1,26,779 | 1,33,364 | not addressed in the filing |
Key Investment Insights
Key Positives
- Consolidated revenue from operations grew 23.71% YoY to Rs.394.48 Cr and 34.75% QoQ
- Consolidated PAT grew 23.85% YoY to Rs.173.30 Cr and 47.27% QoQ; EPS Rs.8.32 vs Rs.6.71 YoY
- Cost-to-income improved to 44.70% from 46.11% YoY and 51.12% QoQ; operating margin 55.30%
- Depository segment revenue grew 24.62% YoY with margin expanding to 57.93% (+3.76pp YoY, +13.52pp QoQ)
- Standalone PAT grew 28.11% YoY to Rs.163.34 Cr on a clean dividend-free base (subsidiary dividend Rs.0 in Q2 both years)
- H1 FY27 consolidated CFO of Rs.478.16 Cr was 1.64× PAT; FCF of Rs.423.72 Cr funded Rs.266.48 Cr dividends and Rs.19.20 Cr associate investment
- Total segment results rose 28.79% YoY with every segment growing revenue double-digit YoY except Repository
Risk Factors
- Data Entry & Storage segment result fell 13.67% YoY with margin down 9.33pp to 25.54% due to April 1, 2026 KYC fee cuts (fetch Rs.35→Rs.28, creation Rs.20→Rs.5)
- Computer technology expenses grew 38.70% YoY, the fastest cost line, outpacing revenue growth
- Consolidated other income fell 52.20% QoQ to Rs.22.82 Cr, reflecting MTM/investment income volatility
- Trade receivables rose 89.58% to Rs.122.49 Cr since March 2026, outpacing revenue growth
- Anugrah Stock & Broking arbitral award remains pending before the Bombay High Court with no provision made
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