Good afternoon, everyone. On behalf of HDFC Securities, we welcome you all to the CDSL Quarter 1 FY '27 earnings call.

Today we have with us the management team of CDSL represented by Mr. Nehal Vora, MD and CEO; Mr.

Girish Amesara, CFO; and other senior leaders from the management team. We will start the call with a brief overview of the quarter by Mr.

Nehal Vora, and then we will open up the floor for the question and answer session. Thank you, and over to you, Nehal sir.

Thank you, Amit. A very, very good afternoon, and welcome everyone.

I hope each of you and your loved ones are safe and healthy. Thank you for joining us today to discuss CDSL's financial results for the first quarter of financial year 2026-2027.

A detailed investor presentation has been uploaded on our website, and I hope you've had an opportunity to see it. I'm joined today by the leadership team of the CDSL Group.

Let me begin with a brief overview of the quarter before the CFO takes us through the financial performance in greater detail. From an industry perspective, the activity levels in the securities market remain healthy.

CDSL has opened about 58 lakh new demat accounts during the quarter, taking the total demat accounts on the CDSL platform to 18.59 crore as on 30th June 2026 and maintaining a market share of approximately 80, 80%. The quarter also saw a few important developments for the organization.

During the quarter, our governing board and our shareholders have approved the appointment of Shri Amit Mahajan as Executive Director, Vertical 1, and Smt. Nayana Ovalekar as Executive Director for Vertical 2.

The shareholders' approval happened after SEBI had given this approvals to CDSL. These appointments are expected to further strengthen the leadership across our operations, technology, regulatory, compliance, risk management, and investor-facing functions.

We were also honored to receive several recognitions during the quarter, including being named as the Most Innovative FinTech Company in Asia-Pacific by Global Finance magazine, and also receiving the Innovation and Settlement Efficiency Award at the Global Custodian Leaders in Asia Custody Awards. These recognitions reflect the efforts of our employees, depository participants, and the wider ecosystem stakeholders.

Coming to our financial performance, CDSL reported a standalone income of 370—327 crore and a standalone net profit of 144 crore for Q1 of FY 2026-2027. On a consolidated basis, the total income stood at 341 crore and a net profit of 118 crore.

CDSL has also made strategic investments in, basically, Sahamati Foundation, an RBI-recognized self-regulatory organization for the account aggregator ecosystem. As the India's securities market continues to deepen, our focus remains unchanged: strengthening core infrastructure, improving service quality for our participants and issuers, supporting investors through awareness and education in initiatives, and building capabilities for the future.

We remain grateful to our regulator, SEBI, and Ministry of Finance and all other regulators, depository participants, issuers, investors, market intermediaries, shareholders, and employees for their continued support and trust. With that, I now hand it over to the CFO, Girish, to take us through the financial performance in greater detail.

Thank you, and Jai Hind.

Thank you, Nehal. Good morning, everyone.

I will start with standalone performance. For the June quarter 2026, the total income is achieved at ₹326.51 crore as against 312.36 crore for the similar quarter during previous year.

The standalone net profit for June 2026 quarter is achieved at 144 crore as against 152 crore for the similar quarter during the previous year. Please note that the other income in standalone financial results includes dividend received from subsidiary, which was at 39.

39.50 crore in June 2026 quarter as compared to 62 crore in the similar quarter during the previous year. The said dividend is eliminated on consolidation as that is received from a subsidiary.

Now on consolidated basis, the total income for June 2026 quarter is achieved at 340.50 crore as against 295.14 crore for the similar quarter in the previous year. The consolidated net profit for June 2026 quarter is achieved at 118 crore as against 102 crore for the similar quarter in the previous year.

With this, I will request Shri Sunil Alvares to take us through CVL numbers. Thank you, and over to you, Sunil.

Good afternoon. During Q1 FY '27, CVL reported revenue from operations of 45 crore as compared to 36 crore during the same period last year, reflecting a growth of 8 crore or 22%.

The growth was largely driven by improvement in our other businesses and other digital service offerings. Total income for the quarter stood at 50 crores as against 43 crores in Q1 FY '26, an increase of 7.6 crores or 18%.

On the expenditure side, the total expenditure increased to 34.67 crores from 26.43 crores, that was up by 8.23 crores or 31%. As a result, the profit before tax stood at 15.68 crore compared to 16.61 crore, a decline of 4% or 62 lakhs.

Profit after tax was at 12.11 lakh crore as against 12.71 crore in the corresponding quarter of the previous year, which was a decline of 59 lakhs or 5%. With this, I will open the floor for the question and answer.

Thank you.

Sir. Thanks for the opportunity.

My first question is on the annual issuer charges growth. Obviously we have shown YoY growth of 12.3%, but seeing the IPOs that we have received, the IPOs that had come last year, the expectation of growth here was much better versus what we did last year in terms of YoY growth for the first quarter.

Any reasons why this growth is lower? Also, if you can give the number of folios in this year versus last year, that would be helpful.

Basically, Amit, it's a formula-driven charges or issuer charges, and it's based on the folios which are actually there. It is what it is in terms of what the numbers are in terms of what the folios have been.

I'll ask CFO Girish to give us the numbers on the folios.

Amit, the folio is 38.73 crore.

Okay. Sir, kindly on the KYC income.

We had the pricing reset in this quarter. Based on the reset math, the impact would have been in the range of 20% only on pricing, but the impact here is lower than that.

Is it offset by volumes, or there is some other things to read into it in terms of the pricing impact that we had in KYC?

I'll ask Sunil to answer this.

Yes. Amit, there were two things which really offset that.

One was the higher fetch volumes, and so the actual impact was lower to about 9%. We also, when the charges were reduced by SEBI, they had allowed us to charge on the search API, which, again, gave us some revenue which reduced the overall effect.

I hope that answers your question.

Okay. Sir, the last question from my side.

In terms of technology expenses, obviously we have seen the technology expenses going up every quarter. In this quarter we have seen some kind of stability there.

Is it fair to assume that most of the heavy lifting in terms of the technology spend is behind and from here we can see a steady-state increase in technology expenses?

Firstly, we don't give future statements which look into the future, forward-looking statements. As I've said in various investor calls, we are an infrastructure company.

Technology and human resource are the two key components, which is in a way the raw material, work in progress, and finished good. Important thing is to ensure the value proposition continues to remain.

Rather than seeing it as a quarter on quarter, you have to see in terms of the stakeholder interest growing, number of accounts growing, and that value proposition should remain intact. Whatever it takes to ensure that the value proposition would continue is really our effort and our intent in taking this forward.

It'll be difficult to comment whether the technology spend will grow or not grow in future. One is we don't give forward-looking statements.

In the overall scheme of things, it is what is required to be done to ensure that the infrastructure continues to remain contextual and value proposition-driven. You have to do whatever it takes for that.

Sir.

Thanks for that. Just wanted to understand that whatever we had in terms of a plan for technology spend, is it already done, or I'm not asking for a future guidance, but as of now, is most of the advancements have been done as per the regulatory requirement?

See, the regulatory requirements keep on changing as per the needs of the market and what needs is there. Also, technology is also changing rapidly.

The intent is that we have to be nimble as well as very, very active in ensuring that the best-in-class technology continues to remain active on the CDSL platform. That's been our intent.

It's difficult to answer this question whether it has reached or not reached because the environment itself is changing so much. Based on that, we'll have to wait and observe how that will impact in the quarters to come.

Sir. Thank you, and all the best, sir.

Thank you.

Thank you.

Thank you for taking my question. Sir, my first question is that competition has mentioned that they have seen more traction with fintech brokers after they've made some tech changes, which have sort of reduced onboarding friction.

Also, I was looking at some data. While we have maintained our market share in terms of total demat accounts, however, for our incremental demat market share, we've lost about 420 bps since close of March, it's standing at 81.4% in June '26.

How are we viewing this in the light of how fintechs are interacting with depositories? That's my first question.

For my second question, if you could just help us understand the movement in other income in this quarter, if possible could you just provide a broad split across ECAS, e-voting, income from unlisted companies, and pledge income, and also any one-offs? Also, how much of this was driven by MTM gains?

Okay.

On your first question, Hiral, I think, again, I'll repeat what I said in the reply to the first question. We are an infrastructure company, and our intent, at least CDSL is not a quarter-on-quarter growth, it is a long-term sustainable growth which creates value proposition for the market.

Growth in demat accounts is a function of various functions on how the market perceives, what is the total growth. The important thing is that the intermediaries and the investors should continue to believe and feel the value proposition of the CDSL platform.

I would see this as more of continuous work in progress quarter on quarter that how do you make our systems better in terms of value proposition. For me, the numbers is one thing which we observe, but it's more important is how are we able to ensure that the people who are accessing the CDSL platform continues to feel the value proposition as and when they do it.

For the second question, I'll ask Girish to answer.

Break up of other income consists of consolidated account statement-related fee, which is around 14.80 crore; e-voting income of 6.32 crore; investment mark-to-market-related gain and other income accrued on investment is 43.8 crore. We have other operating revenue of 6 crore, which is largely includes user facility, accounts maintenance charges, document storage charges, foreign investment limit monitoring charges.

Then we have last other income, 3.94 crore. This totals 75 crore on a consolidate basis.

All right. Thank you so much, sir.

Just one more question. For employee costs, they were up around 30% QoQ.

In case this consists of some bonus provisions, if you could just give us a broad split between the underlying increase and the bonus increase.

We don't give these numbers out in the public domain, but typically it's basically the year-end appraisal process which constitutes this number.

Okay. All right, sir.

Thank you so much.

Thank you.

Hi, sir. Thank you for the opportunity.

Sir, first, just wanted to understand the KYC revenue in a little bit more detail. As you mentioned that there was a dispensation by SEBI, if you could explain what exactly this was and till what time was this allowed so that we can get a sense a normalized run rate.

If you could give us that till what time you got the extra revenue and what is the amount of that. In terms of you mentioned higher volumes, was this more on the fetch side?

If you could maybe in a way give us some color on the blended realization on new and fetch maybe towards the end of the quarter, that would be very helpful. That's on the KYC side, sir.

Secondly, on our treasury book, if you could share what proportion of the asset is in equity or equity-oriented mutual fund? Lastly, some data keeping questions.

In the annual issuer charges, if you could give us the amount of unlisted-related revenue, and if you could break it up between processing and recurring fee? Also the pledge income, if you could provide, sir.

Thanks.

We don't give some part of information data. The first question, I'll ask Sunil to answer, and the second and third, the CFO Girish to answer.

The question what you asked was what was SEBI's directive. The charges was earlier ₹35 on fetch, it was reduced to ₹28.

There was a dip of 28 sorry, 20%. Far as the charges on creation was concerned, it was around ₹20, it was reduced to five ₹5.

That was down by about 75%. Overall during the quarter, the volumes were good, and that's how we more or less, we could maintain our performance as compared to Q1 of last year.

In terms of the other charges what SEBI allowed us to charge was on a search API so that every time somebody searches a particular PAN, there is a small charge of 25 paise levied on it. That resulted in some income, and overall the numbers are what you already indicated to you.

I hope that answers your question.

Yeah. Sir, just a follow-up on this.

Sir, just like the— Swarnabha,

just one minute. Can we just finish all the questions?

Otherwise it will Sure. Sure, sir.

Please go ahead. Thank you.

We do not make any direct investment in the equity schemes of mutual funds. We generally invest in debt schemes.

We have a small portion of ETF investment, which ranges from 5 to 7% of our investible portfolio.

Okay. Pledge income?

Pledge income in this quarter, we have achieved at margin pledge of 6.19 crore. With respect to your question on unlisted revenue, we have achieved unlisted revenue of 0.30 crore, ₹0.30 crore, and application processing fees of 2.32 crore in this quarter.

Majority income, if you look at, ACF, annual custody fees, is all listed companies.

Right, sir. That's very helpful.

Just on the KYC things, the follow-up. The search API-led revenue, this will continue henceforth?

Can you share maybe a proportion or a quantum of that?

No, it will continue, but right now I'll not be able to give you the overall details which is included in the overall income of CRA.

Okay. Just, sir, compared the rack rate has gone down in KYC as we know, the actual eventual chargeable what you are charging, has it gone down by a similar quantum?

Obviously, we'll have to follow SEBI's directive, right?

That has to be followed by all the KRAs, it's not only us.

It's an industry-wide It's an industry-wide circular, everybody's reduced their charges accordingly.

Yeah. I meant that, sir, eventually what you were realizing, say in terms of say if you give some volume discounts or anything to any customer, then even the realizable rate has it also gone down at same level?

We actually don't discuss this in our investor calls.

Sir. Okay.

Thank you. Thank you so much, sir, and all the best for FY '27.

Thank you. Thank you for the opportunity, sir.

Sir, my first question is on annual issuer charges again. Because the way you said that 38.73 crores account, actually the folio count seems to be growing at 17 percentage year on year compared to the last year, but the overall growth is just 12 percentage.

The relatively low growth is largely because of unlisted piece, sir? That's a fair way to understand?

If you compare on quarter-on-quarter basis, yes.

Understood. In unlisted, that opportunity what we had in last year with and maybe MCA changing some threshold levels, the numbers what you mentioned in the current call are likely to remain going ahead, maybe not exact number, but that's the new normal, is it fair to understand, sir?

See, again, it's difficult to give a forward-looking statement, but it is all driven by overall regulatory intent of ensuring that more and more companies come into the fold of depositories. We'll see how and in which manner, in a phase-wise manner, this will increase.

We'll not be able to give any specifics, but the overall regulatory intent is there.

Sir, on CVL business, you said search API for PAN card is 25 paisa if I understood right. That's the charge you earn, right?

Yes.

Okay. Got it, sir.

Last two questions. One one one, if you can give your impairment cost number, which you typically give every quarter?

Second, again on CVL, in the initial remarks, you said that though the charges were lowered, you benefited from other digital services. Which you intend to say that you got any SEBI project which helped to neutralize that impact, or if you can give a color of that 45 crores broken down into pure KYC income and maybe some other source of revenue what you typically get?

The impairment cost debtor provision is 2.22 crore in this quarter. What Sunil had explained for CVL-related income is purely KYC-related income, which we explained every quarter to you.

Sir, yeah, I understood, sir. Sir, in initial comments, Sunil sir said that there were other digital It is

It is part of the online data charges that we normally provide as a disclosure.

Understood, sir. Yeah.

That's it from my side. Thank you very much.

Thank you.

Good afternoon. Thank you for taking my question.

First, I joined a little late. What is the folio count for last year?

I'm not sure whether you've given that number or not. Second, we were also in the process of being able to issue the ISINs.

I wanted to just get an update on that. Have we got that capability right now?

Are we doing that for unlisted companies? Third, sir, on employee expenses that have gone up materially both on a year-over-year and on a quarter-over-quarter basis also, should we expect this number to be sort of our run rate for the rest of the year?

Thanks.

Okay. I'll answer your third question first.

See, the year on year, as it is, the number of employees have grown, and that is a function of as the complexity and the scale of operations grow and whatever is required, we are very mindful of that. The answer to quarter been quarter on quarter because this is the end of the year appraisal.

We follow a financial year appraisal cycle. The appraisal had got done in this quarter which has just ended, and all the variable pay, etc., is paid in this quarter.

You can check out the trends of the previous years' quarters to understand how the employee cost trend works. On the first two, I'll ask the CFO Girish to answer.

The folio that we achieved this year is 38.73 crore.

Okay.

In terms of the ISIN, it's again we are in active engagement. It's yet not gone live.

It needs to go through its processes. As and when it goes live, we will definitely making the necessary announcements.

Got it, sir. Understood.

Last year the number was 33.2 crores for the folio count, right? 33 Yeah.

Okay.

Yeah.

Thanks.

Okay. Thank you.

Hi, sir. Again on this KYC on the search API, if you can give more color on what particular, as you mentioned, sir, this are on some particular plans, not across the board, if you can give some more color on how much volume it can generate every quarter or what could be the run rate and how much benefit tentative is also fine, we have kind of received or we will continue to receive because of this.

Even out the impact of the rack rate which has happened, that would be very helpful.

We don't give any future and forward-looking statements. I'll ask Sunil to supplement it.

That's number one. Number two, it's a measure which has just kicked in from this quarter.

You may like to observe it over quarter on quarter how the volumes go forward. We do not give any future forward-looking statements.

Sunil, if you want

to I was asking more so from the current volume, how much on the volume we have been able to kind of generate this income out of that 45 crores.

See, it will be very difficult to actually pinpoint on that because many of the intermediaries, after this rate was levied on them, they started fine-tuning their system and we've seen a considerable drop over a period of the second and third month. We are waiting for it to stabilize, then we'll really actually have a fair idea because earlier people were doing searches for one PAN maybe 20, 30 times a day.

Now that will come down significantly. That is our reading in CVL.

We'll have to wait for one more quarter to really see where it actually stabilizes.

Okay. That is helpful.

Also, in terms of understanding any other further measures we can take to kind of reduce the impact further on the rack rate, like the edit charge and all any other charge plus unified KYC also if you can touch upon. That is again we talked about.

Far as unified KYC is concerned, we are in the process of getting integrated with CERSAI, and we are in the process of testing their systems and all. That will happen, but I cannot give you an exact date by when it will happen.

It all depends when their systems are available, etc., to us and when we actually go live. These discussions are again happening between the regulator and CERSAI, once we get a very clear picture of what process should be actually followed, though it is more or less defined, but once we actually test the system and see whether what has been decided, whether we are following the same process, then we'll be able to actually tell you with more clarity, yes.

Okay. Does this rack rate will sustain or it will further go down once unified KYC is You're again

asking forward-looking question, which is very difficult to answer because this is just the first quarter. I've already told you we'll have to wait for another quarter to see what really happens.

Okay. Any other measures to kind of make up the loss in the rack rate which we can do apart from the search API?

Again, I think you need to observe how the general trend is. It's a market volume-driven and a rate-driven.

It's kind of a mixture of both. As the overall activity increases, decreases, that's how the function and functioning works.

Again, the overall intent is we are a market infrastructure company. It's overall creating a value proposition through CDSL and its subsidiaries and giving the customer continuous value proposition because this is a way of life in terms of going forward.

That's has been our main focus on how we function.

Okay. Got it.

Thank you, and all the best. Yeah.

Thank you.

Hi, sir. Thank you for the follow-up opportunity.

Just a couple of things I wanted to understand. You mentioned that in unlisted revenue, the issuer revenue is 0.3 crore.

Did I get it right?

Hello?

Yes.

Last quarter it was 3 and 1/2 crore. For the processing fee last quarter was 3 crore, which is around 2.3 crore.

Just wanted to understand that if the universe of this unlisted has changed because of the regulation. Why are we seeing an impact on the issuer revenue?

Why I had kind of thought that, maybe the application processing side might see some impact. If you could just help me understand what is playing out here, that would be very helpful.

Normally what happens is that we get a question in this call that what is the unlisted revenue from unlisted companies admitted during the quarter. I'd given that figure.

Okay? Normally we do not give breakup of listed and unlisted annual custody fees because we do not track that way.

Okay. This is very clear, sir.

Yeah. Thank you, sir.

All the best.

Thank you.

Yeah. Hi, sir.

Sorry if I am asking this question again if it has been repeated, I joined a bit late. Just on this computer and technology-related expenses, after a few quarters, we've seen stability in that number.

Is it fair to think that we are closer to now peaking out at our investments in this piece, and from here on, it will be more of an inflationary spend and that would allow us to see operating leverage benefits coming out?

I think being as a part of the overall ecosystem, you're a part of Motilal Oswal, technology is something which continuously continues to evolve, and it's very difficult to predict whether we've reached the top end of the technology spend or not. The important thing is about the intent of ensuring the value proposition to all the stakeholders and ensuring that the newer products and platforms which are being introduced is being incorporated into the CDSL ecosystem.

One is we don't give any future and forward-looking statements. It is a function of the overall products which are going to be introduced in future, and the newer products on the technology side which are getting introduced, how much of that could be implemented at CDSL.

That itself will kind of lead to whether at basically what level the technology expenses will continue in the future quarters.

Okay. Why is the tax rate so high in this quarter?

I'll ask the CFO to answer that.

Tax rate we are having a tax rate of 25.17%, we are within that.

Okay. Second one and last one, could you give us a breakup of your cash investments as to how much is in equity, how much is in debt instruments in some form?

Largely that's coming in from the fact that other income has seen a sharp jump. Just wanted to understand the color of the investment book and the reasons for the sharp jump in the other income.

See,

we have an internal investment policy. We follow that policy, and normally we don't discuss the breakup of various instrument in which we have made investments.

What I can tell you is that we do not make investment in equity schemes of mutual funds. Rest, whatever is available in the market, we make investment as per our investment policy.

What drove this, at least you can explain what drove this jump in

the That is mark-to-market gain during the quarter.

Got that. Thank you, and all the best.

Thank you.

No, I would sincerely like to thank all of you for your participation. Continue to remain safe and healthy.

Thank you, and Jai