# 1. Financial Performance ## A. Key Figures * **Total Income:** **₹190.4 Cr** stand-alone (+21.7% YoY) · **₹346.8 Cr** consolidated * **Operating Income:** **₹161 Cr** (+5% YoY) * PAT: **₹82.6 Cr** (+24% YoY) * EBITDA: ₹115.3 Cr (+27% YoY) ## B. Revenue Growth * **Top-Line Contraction:** Revenue decline driven by **strategic controls to enhance customer quality**, particularly favoring higher CASA-value clients, resulting in lower transaction volumes and commissions. * **Business Mix Impact:** Dampened top-line performance reflects intentional moderation in transactional business, with consolidated expense reduction linked to lower commission payouts. ## C. Profitability Trends * **Strong Bottom-Line Expansion:** Robust profit growth significantly outpaced revenue, indicating improved operating leverage and cost discipline despite rising employee and tech costs. * **Margin Transparency Request:** Analyst inquiry highlights need for **EBITDA margin ex-Payment Bank** to enable peer benchmarking against NDML and other KYC-focused players. ## D. Expense Drivers * **Cost Discipline with Inflationary Pressures:** Standalone operating expenses declined sequentially due to prior quarter's one-off regulatory fee; underlying trend shows **rising employee and technology costs**. * **Technology Spend Clarity:** Quarterly tech cost (ex-depreciation) reported as **₹8 Cr (approx. ₹20 Cr annualized)**, underscoring ongoing digital investment. * **Depreciation Volatility:** Sequential decline attributed to prior quarter asset write-down during transition from Kamla Mill to BKC premises. ## E. Cash Deployment * **Capital Allocation Strategy:** **₹2,000 Cr** total investments, with **₹281 Cr** in subsidiaries/associates and remainder in GSECs, mutual funds, and corporate bonds. * **Dividend Signal Over Deployment Shift:** Board maintains current cash deployment policy but signaled stronger shareholder returns via **dividend payout increase from 50% to 100% of face value**. * **Working Capital Profile:** Extended cycle influenced by unlisted segment dynamics and scale across **90,000+ companies**. --- # 2. Revenue Mix & Streams ## A. Key Figures * ADTO: **15%** increase in BSE and NSE deliveries in Q1 on a sequential basis * **Revenue Mix:** **~42%** recurring · **~58%** transactional * **Settlement Fee:** **₹4** per daily debit (included in transaction charges) ## B. Recurring vs Transactional * **Resilient Activity:** Average daily turnover rose despite slowing Demat account growth, signaling sustained trading engagement. * **Diversified Model:** Revenue base spans **nine distinct streams**, with recurring components anchored in custody and issuer fees providing stability. * **Clarity on Classification:** Transaction income appears low relative to peers; management clarified that **AMC charges are excluded from issuer income** and reported under other income. ## C. Issuer & Settlement Fees * **Issuer Revenue Core:** Custody fees from corporates (listed and unlisted) contribute **slightly over 40% to 42% of total revenue**, forming a stable base. * **NSDL Revenue Diversification:** Seven-component model—including settlement, pledge, and corporate action fees—drives resilience, accounting for **58% of total revenue** amid weak markets. * **New Mandatory Revenue Streams:** Brokers now pay for **trade detail uploads**, adding a new source of income under settlement-related charges. ## D. New Revenue Initiatives * **Strategic Monetization:** Company is the **largest provider for common contract notes**, with initial revenue impact confirmed and outsized benefits expected versus peers. * **Growth Levers:** Management is actively deploying all **nine revenue streams** to reduce volatility exposure and enhance scalability. * **Payment Bank Progress:** Margins improved sequentially, though below **120%**, with future gains tied to digitization and cross-selling execution. --- # 3. Customer & Market Share ## A. Key Figures * **Demat Account Additions:** **67 lakh** in Q1 FY26 (–6% seq) · **71 lakh** prior quarter * **NSDL Demat Accounts:** **4 crore** as of June 30, 2025 * NSDL Market Share (BO Accounts): 15.5% run-rate in Q1 FY26 (+610 bps YoY) * NSDL Equity Dematerialized Share: **73.2%** in Q1 FY26 (up from 70.8% in Q1 FY25) * **Unlisted Custody Market Share:** **73%** * **Demat Market Share:** **15%** (up from <10%) * **Companies Admitted:** **10,392** in Q1 FY26 ## B. Demat Account Growth * **Resilient Expansion:** Robust Demat account additions despite global headwinds, with recent sequential dip following record prior quarter. * **Youth & Digital Focus:** Uptick in monthly additions driven by **zero transaction charges for under-24s** and digital decongestion initiatives per broker. * **Payments Bank Traction:** Banking arm has acquired ~3 crore accounts via BC partners and built a meaningful CASA base. ## C. NSDL Market Share * **Sharp Share Gains:** Significant YoY improvement in BO account share, reflecting rising adoption across new-age brokers and institutional clients. * **Diversified Revenue Model:** Business remains resilient to market cycles due to **7 distinct transaction income streams**, including dominant unlisted custody position. * **Multi-Factor Growth Drivers:** Market share gains attributed to digitization, bank focus on three-in-one accounts, and scale-up of emerging brokers—not isolated to one channel. ## D. Client Segment Expansion * **Broadening Participation:** Record number of companies admitted in Q1 underscores deepening market infrastructure and inclusion. * **Broker Ecosystem Strengthening:** Growth fueled by enhanced support for existing brokers and rising momentum among **new-age, high-growth brokers**, particularly in Bangalore. * **Strategic Shift Beyond Acquisition:** Business model evolving toward higher customer quality and expansion into adjacent services, with early success evident. --- # 4. Product & Platform Innovation ## A. Key Figures * **DLT Platform Revenue:** **Revenue generation initiated** following launch (previously non-revenue-generating) ## B. Common Contract Note * **Mandatory Adoption Achieved:** Common contract note system now fully operational with mandatory broker uploads, marking a shift from voluntary compliance and enhancing standardization. * **Platform Integration Accelerates:** Steady platform rollout enables unified services, including e-voting proxy advisories and API-driven mutual fund demat conversion, boosting investor functionality. * **Investor-Centric Consolidation:** Unified investor application on NSDL's PD app delivers **single-view access** across equities, mutual funds, AIFs, and other assets, improving usability and engagement. ## C. Digital Decongestion * **Friction-Led Growth Strategy:** Sustained focus on reducing onboarding friction is yielding measurable improvements in user experience and market adoption. * **Iterative Product Enhancement:** Continuous deployment of **small, incremental updates**—released weekly or monthly—drives cumulative efficiency gains across the ecosystem. * **Broad-Based Experience Focus:** Customer experience investments now span DPs, brokers, end investors, mutual funds, and FPIs, signaling platform-wide modernization. --- # 5. Technology & Infrastructure ## A. Key Figures * **Tech Spending:** **₹35 Cr** capex · **₹65 Cr** opex (prior year) ## B. Automation Focus * **Strategic Tech Investment:** Technology positioned as a core growth enabler to capture market share amid rising competition and tighter broker partnerships. * **Four-Pillar Tech Agenda:** Focus areas include **automation**, user experience, cyber security, and technological resilience, with automation central to operational efficiency and scalability. * **Automation Rationale:** Prioritized due to operations-intensive model, leveraging new-age tools to enhance dependability and drive long-term cost optimization. ## C. System Resilience * **Critical Infrastructure Role:** Cyber security, uptime, speed, and resilience are key priorities, reinforcing the company’s status within **India’s critical financial infrastructure**. * **Capacity Expansion:** Infrastructure upgrades underway to handle rising market volumes, increasing dematerialization of **debt and new instrument types**, and growing client folios. * **Growth Initiatives:** Revenue contribution from acquisition business commenced in Q1; **3-in-1 account** discussions with brokers remain exploratory. --- # 6. Risks & Regulatory Exposure ## A. Market Volatility * **Headline:** NSDL recognizes **market and regulatory risks** as inherent to its role in capital markets, with no expectation of fully mitigating the impact of market fluctuations. ## B. Regulatory Changes * **Headline:** **Common contract notes** implementation is a mandatory, industry-wide regulatory requirement, not a discretionary initiative. ## C. Cyber Security Threats * **Headline:** Cyber security is a critical priority given custody of **over $6 trillion in assets**, driving sustained investment in infrastructure resilience. * **Headline:** Robust safeguards including **redundancies, backups, data centers, and contingency systems** are in place to ensure operational continuity and threat response. --- # 7. Guidance & Outlook ## A. Capital Expenditure * **Substantial Capex Increase Ahead:** Capex set to more than double prior-year levels, signaling aggressive investment ahead despite absence of exact figures. ## B. Future Disclosures * **Limited Subsidiary & Income Breakdowns:** No current disclosures on KYC/insurance depository market share or split of issuer income by listed/unlisted, with management citing standard practices. * **Granular Transaction Data Requested:** Investors seek detailed breakup of transaction income; company acknowledges feedback but defers enhancements due to recent listing. * **No EBITDA Disclosure for NDML:** Combined EBITDA including NDML not disclosed; only standard reporting provided for now. ## C. Strategic Execution * **Long-Term Payments Bank Focus:** Strategy anchored in financial inclusion and digitization, with sustained investment planned despite lack of near-term margin guidance. * **Early-Stage Initiative:** Payments Bank revenue impact too early to quantify—live for only **one month**—but future updates expected.