Capitaline

Results 01-Aug-22

Analysis

Central Depository Services (India)

Market volatility impacts revenue growth

Central Depository Services has reported 10% decline in consolidated net profit to Rs 57.78 crore for the quarter ended June 2022. The consolidated revenue of the company increased 20% to Rs 140.18 crore in Q1FY2023. Operating margin (OPM) eased by 187 bps to 60.99%. As a result, the operating profit (OP) climbed up at slower pace of 16% to Rs 60.99 crore. Other income declined 60% to Rs 5.00 crore. Depreciation moved up 155% to Rs 4.19 crore. PBT rose 2% to Rs 86.28 crore in Q1FY2023.

There is extra ordinary net expense of Rs 9.74 crore in Q1FY2023 against nil in Q1FY2022, leading PBT to decline 10% to Rs 76.54 crore The tax expenses eased 8% to Rs 18.93 crore. The effective tax rate rose 38 bps to 24.73%. The PAT before MI and Share in Profit of Associates fell 10% to Rs 57.61 crore. After accounting for gains of Rs 0.17 crore in minority interest, the Net Profit fell by 10% to Rs 57.78 crore.

Book value of the company stood at Rs 110.1 per share at end June 2022.

Business performance Highlights

CDSL became the first depository to register 6.85 crore demat accounts in June 2022.

55 lakh demat accounts were opened in Q1 FY22-23, as compared to 62 lakhs in Q1FY21-22.

Value of Securities in Demat Custody (in crore) increased to Rs 33.84 lakh crore end June 2022.

The company through its subsidiary CVL continued to generate capital market investor records and being the first and largest KYC Registration Agency (KRA) in the country.

Management comments

Nehal Vora, MD & CEO said “We are happy to present the first quarter of the new financial year. Our primary focus in the first quarter of this year remained on maintaining an organic and sustainable growth and providing diversified services. Our digital services for DPs, investors and other market participants have been delivering on the promise, of making it easier to access the securities markets independently and improve the experience for all market participants.

As India celebrates the 75th year of independence, while we find ourselves at a crossroad - a crossroad where the decision we make today will shape the future we build together. Furthermore, we reflect on our past efforts where we have spent years constructing this future that is defined by our steadfast commitment to a better India, our shared objective to empower every Indian through financial independence making them an ‘Atmanirbhar Niveshak’ and the opportunity to build a better economy for all Indians.

Considering this, our long-term goal at CDSL is not only to grow individually, but to also grow collectively as responsible contributors to the growth of our nation. To achieve the same, CDSL as a market infrastructure institution will continue to deliver on our promise of making the securities market a convenient and secured place."

Financial Performance FY2022

For the year ended March 2022, Sales of the company were up 60% to Rs 551.33 crore. OPM jumped by 466 bps to 66.3%, thus, OP declined 73% at Rs 365.45 crore. Other income rose 4% to Rs 58.97 crore. After accounting for depreciation (up 25% at Rs 11.46 crore), the PBT increased 59% to Rs 412.95 crore in FY2022.

The effective tax rate rose 205 bps to 24.5%. Thus, the PAT before MI gained 55% to Rs 311.81 crore. After accounting loss of Rs 0.63 crore in Minority interest, the Net Profit, as a result, grew by 55% to Rs 311.18 crore in FY2022.

Notes:

During the quarter, the holding company has divested 92.5% stake in its subsidiary - India International Depository IFSC on 2 May 2022 to its associate India International Bullion Holding IFSC thus resulting in a loss of control. The profit on sale of such investment stands at Rs 1.1188 crore and after eliminating its share in the associate has been disclosed in EO.

During the quarter the board of directors of holding company and one of the subsidiary approved an additional performance payout to its employees of Rs 10.86 crore which has been recorded as charge in the quarter.

Central Depository Services (India) : Consolidated Results
Particulars	2206 (3)	2106 (3)	Var %	2203 (12)	2103 (12)	Var %
Sales	140.18	117.28	20	551.33	343.72	60
OPM %	60.99	62.86		66.29	61.63
OP	85.49	73.72	16	365.45	211.82	73
Other Income	5.00	12.51	-60	58.97	56.92	4
PBIDT	90.49	86.23	5	424.42	268.74	58
Interest	0.02	0.00	-	0.01	0.02	-50
PBDT	90.47	86.23	5	424.41	268.72	58
Depreciation	4.19	1.64	155	11.46	9.20	25
PBT	86.28	84.59	2	412.95	259.52	59
Share of P&L from Associate	0.00	0.00	-	0.00	0.00	-
PBT before EO	86.28	84.59	2	412.95	259.52	59
EO	-9.74	0.00	-	0.00	0.00	-
PBT After EO	76.54	84.59	-10	412.95	259.52	59
Tax	18.93	20.60	-8	101.14	58.25	74
PAT before MI	57.61	63.99	-10	311.81	201.27	55
MI and share of associates	-0.17	0.12	LP	0.63	0.93	-32
PAT	57.78	63.87	-10	311.18	200.34	55
EPS*	24.9	24.4		29.8	19.2
* Annualized on current equity of Rs 104.5 crore. Face Value: Rs 10 per share, Figures in Rs crore, EPS is calculated after excluding EO and relevant tax PL: Profit to Loss, LP: Loss to Profit
Source: Capitaline Corporate Database

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