Since 2015 when new accounting standards came into effect, CDSL has used Fair Value through Profit and Loss (search for FVTPL in its prospectus) to account for its financial assets. I have seen normally companies use Fair Value though Other Comprehensive Income (FVTOCI).
Source: CDSL IPO Prospectus
Becaue of this, CDSL’s operating cashflow has consistently lagged net profits especially over last 3 years
Source: CDSL IPO Prospectus
In 2017, out of 87 Cr of reported profits, 27 Cr came from FVTPL accounting. If interest rates rise, this part of the profits will be gone or substantially reduce. Recurring profits are only 60 cr. Based on this this P/E works out to be 45. In fact, if you strip out FVTPL items from profits, picture looks pretty bad. CDSL also relies more on fees from IPO and corporate actions than transactions compared to NDSL. These sources of revenues are more volatile than transaction fees. In bear markets, these sources of revenues will not grow.