Buzzing Stock: CDSL at all-time high; jumps by nearly 18 per cent

On Wednesday, the stock of Central Depository Services Ltd (CDSL) became one of the top gainers on Nifty 500 index. CDSL is buzzing on bourses, up by nearly 18 per cent on an intraday basis.

In its recent results, CDSL reported an increase of 67 per cent YoY in the total profit after tax at Rs 46.73 crore while its total income on a consolidated basis increased by 17 per cent YoY to Rs 86.01 crore. 

CDSL is one of the two depositories in India, which has been steadily gaining market share. The current year has been quite good for CDSL with the advent of newcomers into the stock market. There is a huge spike in the number of new Demats accounts being opened in the first half of 2020 and CDSL is one of the biggest beneficiaries of this trend. The sales growth for the past three years has been 13.68 per cent (CAGR).

The stock’s P/E stands at 34.22 while RoE for CDSL stands at 15.23. The dividend yield for the stock is 1.10 per cent and the market cap for CDSL stands at Rs 4,881 crore. CDSL has outperformed Sensex by 139 per cent in one year. The stock has more than doubled on a YTD basis and is up by almost 114 per cent. In one month, the stock has gained by nearly 40.5 per cent. 

Gaining for the second straight day, today’s gain of CDSL is its biggest single-day gain in eight months. Though some analysts say that the stock is trading at 22.4 per cent higher than its 12-month consensus price target of Rs 348.8, it implies a negative return potential. And, since its relative strength index (RSI) is at 78, it could be in the overbought territory.

On NSE, the stock of CDSL is currently trading at Rs 477.70, up by 16.83 per cent or Rs 68.80 per share.