Very insightful. Individual stocks go to extreme lengths unlike Nifty (which is a basket of multiple stocks).
In 2021 CDSL did command an insane valuation, and it sure does not in 2024.
One thing I’ve observed about CDSL is that the Sep results are way better than previous or next quarter. What do you think leads to that?
Does it have relation to the number of IPO’s in that quarter.
@Contrabets have you taken the bonus shares into consideration for your graph? I doubt so! Here’s a simple graph of 5 years comparison between cdsl and nifty50 on google finance.
Looks like post is deleted of wrong comparision.
@Contrabets I dont agree with what you have shared.
Decline in Transaction Charges: A drop in transaction charges suggests that trading activity in the market has slowed down. Transaction charges are directly linked to the volume of trades and transactions occurring in the market. So the slowdown in the market may suggest poor earnings performance of CDSL.
Seems like the stock is also on the way to meet the analyst expectations for FY25 estimates. In the first 3 quarters, total EPS is Rs. 20.40(6.42+7.75+6.23).
So to hit the median estimates, it needs an EPS of Rs. 7.10 or more in Q4. It will be interesting to see if analysts change their estimates after the Q3 result due to current market conditions. There have been no changes in the past couple of months.
Please can you elaborate why qoq shouldn’t be used for comparison. It is linked to market conditions but other than that there is no seasonality here so QoQ comparison appears very valid here
Are you paid user of this tool ?
No. I work at the company behind this tool and am participating in the discussion to share relevant data points that might be helpful.
IPOs come when stock market is in bull market.
So, qoq would not tell you a great picture as qoq would be highly volatile and be affected by the minor blips in the economy. Market seasonality can effect the CDSL revenues.
Take, budget for eg, stock transactions will be more practical to analyse it qoq or from the yoy (last budget)?
YoY gives a better picture as these.
Many people do tax harvesting in Q4 which can show you a contrasting picture if compared with Q3/1. Also, transaction volumes fluctuations qoq will be more aggressive than yoy.
These are some reasons due to which yoy is better comparison than qoq.
Also, going forward qoq will get poorer as it’s a market linked stock (bear market)
Again this is what I think. Would love to get a better insight.
In the last Concall: I asked #CDSL Will you list this business ?
Management:
We have taken this as a feedback, might consider this!
What do you think folks ?
CDSL | First Repository > 15M accounts
CDSL becomes the first depository to register over 15 crore demat
accounts
As CDSL expands its number of demat accounts, does it offer any network effect benefits for new brokers who choose to work with them?
I recently read a great article ( link → 10,000x. Bloomberg’s return and why financial data is so darn lucrative) which said, opening new exchange doesn’t benefit anyone, because new comer never reach enough liquidity to benefit end customer. Exchanges seem to have huge network effect advantage as they grow dominant.
CDSL has lower financial requirements for new brokers, making it more appealing for them to work with CDSL. However, as CDSL grows in the number of demat accounts, does it offer any network effect benefits for new brokers to choose CDSL over NSDL, especially since both CDSL and NSDL charge similar fees and CDSL isn’t necessarily a low-cost provider?
Both players understand that continuing with status quo is best for each other. If they start competing on pricing, it will hurt them both. Oligopoly benefits both and rocking the boat too much won’t be fun. They can focus on improving service and tech than on cost.
CDSL and NSDL launched unified investor app features, enhancing access to financial data across Market Infrastructure Institutions (MIIs).
https://x.com/Ashishkafunda/status/1899633871442133231
Account additions in Feb at 21 month low.
