Capitaline

Analyst Meet / AGM 23-Jan-18

Conference Call

Central Depository Services

Maintains higher incremental demat accounts share of 64%

Central Depository Services conducted a conference call on 22 January 2018 to discuss the financial results of the company for quarter ended December 2017. PS Reddy, MD&CEO of the company addressed the call:
Highlights:

The company has recorded strong 36% growth in the operating income for the quarter ended September 2017. Income growth is driven by strong growth in most of the key sub segments.
The breakup of revenues shows that annual issuance charges have increased 8% to Rs 13.89 crore in Q3FY2018 from Rs 12.87 crore in Q3FY2017, transaction charges have jumped 67% to Rs 12.70 crore from Rs 7.59 crore, IPO corporate changes have galloped 122 % to Rs 8.34 crore and online data charges have moved up 74% to Rs 7.77 crore from Rs 4.47 crore.
The company has recorded 25% growth in the net profit for the quarter ended December 2017.
The other income showed decline in Q3FY2018, was impacted due to mark to market losses in its investment book for the quarter ended December 2017. The other income comprising mainly investment income has declined Rs 24.78 crore in 9MFY2018 from Rs 31.18 crore in 9MFY2017.
The cash level of the company stood at Rs 530 crore end December 2017.
The company is required to maintain cash level of Rs 100 crore for depositories business, Rs 50 crore for CDSL Commodities Repository, Rs 30 crore for CDSL Insurance Repository and Rs 30 crore for CDSL Ventures.
On outstanding basis, the company is maintaining demat account share of 46%, while industry revenue share stood at 42%. However, on incremental basis, the company is maintaining a high demat account opening share of 64%.
The new accounts opening growth is given by banks while the company also has empanelment with exclusive 519 DPs, higher than 262 to 280 DPs of NSDL.
The company inaugurated CDSL Commodities Depository in September 2017. The company has added 11 employees in the quarter landed December 2017, while would add another 10 employees in the commodities repositories segment.
As per the company, the transaction charges stands at Rs 5 per debit transaction.
As per the company the national academic depository will take time to generate revenues, while CDSL Ventures is in the process of registering more and more universities. E-KYC business is growing well, while it would contribute to revenues in next few years.
The company is in the process of discussion with government for dematerialisation of fixed deposits, insurance policies, corporate fixed deposits etc.
As a GST Suvidha provider, the company is expecting business to be lower than earlier expected as government is reducing return filing requirement.
The IT expenses of the company were nearly flat at Rs 2.51 crore in the quarter ended December 2017, while the company expects annual 7 to 8% growth in its IT expenses.
As per the company, its dividend policy states payout of 50% of EPS on standalone basis.

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