Time period given by analyst is one year when Central Depository Services (India) Ltd. price can reach defined target.
Central Depository Services (India) Ltd., incorporated in the year 1997, is a Small Cap company (having a market cap of Rs 14400.10 Crore) operating in Financial Services sector.
Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 110.25 Crore, up 6.83 % from last quarter Total Income of Rs 103.20 Crore and up 51.08 % from last year same quarter Total Income of Rs 72.98 Crore. Company reported net profit after tax of Rs 51.64 Crore in latest quarter.
Investment Rationale
The brokerage expects a revenue CAGR of 25% between FY21-FY23E driven by strong growth in market linked revenues (29% CAGR during the period). The brokerage expects non-market linked revenues to clock an 18% CAGR across the same timeline. Within market linked revenues, it expects transaction revenues to witness a strong CAGR of 33%. It also estimates IPO / Corporate action and Online data charges to grow at 27% / 25% CAGR on the back of continued retail participation in capital markets in the medium term. Within non-market linked revenues, it expects annual issuer charges to rise at 13% CAGR between FY21-FY23E. It also forecasts operating leverage benefits to accrue resulting in margin expansion from 61.6% in FY21 to 67% in FY22, and 69% in FY23. It values CDSL at 40x core EPS of Rs25.7 and free cash of Rs136/share to arrive at a target price of Rs1,160.
Promoter/FII Holdings
Promoters held 20 per cent stake in the company as of June 30, 2021, while FIIs held 9 per cent, DIIs 32.4 per cent and public and others 38.6 per cent.
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