NSDL vs CDSL: Which Depository Stock Is Best to Buy After Q1 Results 2025?

NSDL vs CDSL: Investing in India’s booming capital markets can be a game-changer, but choosing the right stock is critical. With NSDL vs CDSL dominating India’s depository landscape, investors are eager to know which stock offers better value after their Q1 2025 results. National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) are the backbone of India’s electronic securities system, facilitating seamless trading and settlement.

When it comes to Indian depositories, the debate of NSDL vs CDSL often arises among investors.
Both play a key role in holding securities electronically, but NSDL vs CDSL differ in their origin and market share.
While NSDL (National Securities Depository Limited) was the first depository in India, CDSL (Central Depository Services Limited) gained popularity later.

The comparison of NSDL vs CDSL mainly revolves around reliability, technology, and the number of Demat accounts they serve.
For investors, knowing the difference between NSDL vs CDSL is essential before choosing a broker. Ultimately, both ensure smooth settlement of trades and safe storage of securities in Demat form.

This article dives deep into their Q1 2025 financials, market positioning, and investment potential to help you decide which depository stock is the smarter bet. Whether you’re a seasoned investor or new to the market, this analysis provides actionable insights to guide your decision.

Understanding NSDL and CDSL

What Is NSDL?

Established in 1996, NSDL is India’s first and largest securities depository, pioneered in response to the 1992 Harshad Mehta scam. It revolutionized the market by digitizing securities, eliminating risks like forgery and delays. Backed by the National Stock Exchange (NSE), NSDL serves institutional clients and holds a commanding share of custody value.

What Is CDSL?

Launched in 1999, CDSL is the younger player, aligned with the Bombay Stock Exchange (BSE). It has carved a niche among retail investors, leveraging lower fees and partnerships with discount brokers like Zerodha and Groww. CDSL dominates in demat account numbers, making it a retail favorite.

Q1 2025 Financial Performance: A Head-to-Head Comparison

Both depositories released their Q1 FY26 results, offering critical insights into their financial health and growth prospects. Here’s a detailed breakdown:

NSDL Q1 2025 Results

• Revenue: ₹312 crore, down 14% sequentially but up 19% year-on-year in depository revenue.
• Net Profit: ₹89.6 crore, an 8% increase from the previous quarter, driven by reduced expenses.
• EBITDA: ₹95.2 crore, up 4% quarter-on-quarter, with margins improving to 30.5% from 25.1%.
• Market Share: Demat account share rose to 15.5% (from 9.4% last year), with an 86.6% share in custody value.
• Stock Performance: Post-IPO, NSDL’s stock surged 80% above its ₹760–₹800 issue price, hitting ₹1,425.

CDSL Q1 2025 Results

• Revenue: ₹259 crore, up 15.6% sequentially, fueled by issuer revenue and transaction income recovery.
• Net Profit: ₹102 crore, a marginal increase from ₹100 crore, but down 24% year-on-year.
• EBITDA: ₹130.6 crore, up 20%, with margins expanding to 50.4% from 48.6%.
• Market Share: Retained an 84% share in demat accounts, adding 5.7 million accounts (down from 6.4 million in Q4).
• Stock Performance: Steady at ₹1,573, with a 4% rise in the past five days but a 10% dip over the month.

Key Differences: NSDL vs CDSL

Market Positioning

• NSDL: Dominates institutional accounts (10.47 lakh vs. CDSL’s 2.17 lakh) and custody value (₹464 lakh crore vs. CDSL’s ₹71 lakh crore). It earns higher revenue per investor (₹156.80 vs. CDSL’s ₹55.44).
• CDSL: Leads in retail demat accounts (15.3 crore vs. NSDL’s 3.95 crore), driven by partnerships with discount brokers offering lower fees.

Valuation

• NSDL: Trades at a P/E ratio of ~74–79, reflecting a premium due to its post-IPO rally and institutional focus.
• CDSL: Trades at a P/E ratio of ~65–66, considered more reasonably valued given its retail-driven stability.

Growth Prospects

• NSDL: Its focus on institutional clients and high-value custody makes it a strong play for long-term growth in India’s expanding capital markets. Innovations like blockchain settlements could further boost its edge.
• CDSL: Benefits from sticky retail participation, but its growth in account additions slowed, signaling potential saturation in the retail segment.

Analyst Insights: Which Stock to Buy?

Analysts offer mixed views on NSDL vs CDSL post-Q1 2025:

• Anshul Jain, Lakshmishree: Suggests CDSL for its stable price structure and better risk-reward setup near the ₹1,378.9 support zone. NSDL’s sharp post-IPO rally limits its immediate upside.
• Seema Srivastava, SMC Global Securities: Notes NSDL’s accelerating momentum and growth potential despite higher valuations, while CDSL offers stable, retail-driven earnings.
• Vaibhav Vidwani, Bonanza: Highlights NSDL’s valuation discount (market cap ₹24,166 crore vs. CDSL’s ₹32,806 crore) and institutional strength, making it attractive long-term.

Risks and Considerations

• NSDL: High P/E and post-IPO volatility pose risks. A potential market slowdown could impact transaction volumes.
• CDSL: Declining year-on-year profits and slowing account additions raise concerns about growth sustainability.
• Market Risks: Both face regulatory changes and competition, though their duopoly status offers a strong moat.

Conclusion

Choosing between NSDL vs CDSL depends on your investment goals. NSDL is ideal for those seeking exposure to institutional growth and high-value custody, with its recent listing and technological advancements signaling long-term potential. However, its premium valuation requires caution. CDSL, with its retail dominance and stable earnings, suits investors prioritizing steady returns and lower risk, especially on price dips. Both stocks benefit from India’s growing capital markets, making them compelling long-term bets.

Call to Action: Have you invested in NSDL or CDSL, or are you considering it after their Q1 2025 results? Share your thoughts in the comments below or subscribe to our newsletter for more market insights! Always consult a financial advisor before investing.