CDSL margin falls 8.49 points QoQ as expenses outpace revenue
Revenue grew +17.11% YoY, but higher costs and a sharp fall in other income pushed consolidated net profit down -20.52%.
Filed 02 May 2026, 15:08 IST · after market close · Central Depository Services (India) Ltd (CDSL)
Key takeaways
- CDSL's consolidated operating margin narrowed 8.49 percentage points QoQ as revenue fell -13.64% while expenses rose +1.93%.
- Despite +17.11% YoY revenue growth, net profit declined -20.52% as other income fell -86.54% and expenses grew +26.97%.
- The stock fell -3.55% by the fifth session after results, a smaller move than its 5.69% median absolute post-results move.
Price around the results
Revenue growth did not translate into operating leverage
On a consolidated basis, revenue grew +17.11% YoY, but expenses rose faster at +26.97%, limiting operating profit growth to +6.74%. That imbalance narrowed operating margin by 4.31 percentage points YoY. Sequentially, revenue fell -13.64% while expenses increased +1.93%, causing an 8.49-percentage-point margin decline.
Other income amplified the profit decline
Other income fell -86.54% YoY and -84.55% QoQ, reducing a non-operating contribution that accounted for 4.19% of current-quarter pre-tax profit. Depreciation also rose +24.72% YoY, while the tax rate increased 1.62 percentage points. Together, these factors help explain why pre-tax profit fell -18.85% and net profit fell -20.52% despite higher revenue.
Margin has declined for two straight quarters
Operating margin peaked at 55.70% in Q2FY26, eased to 52.91% in Q3FY26 and fell further to 44.42% in Q4FY26. The latest margin was 14.99 percentage points below the 59.41% median for 52 Financial Services peers that had reported the quarter.
The market reaction was negative but within CDSL's usual range
The stock fell -2.65% on the first reaction day and was down -3.55% by the fifth session, with volume at 2.13 times the reference level on day zero. Its move was weaker than the market by 3.16% on day zero and 2.80% by day five. Even so, the five-day decline was smaller than the stock's 5.69% median absolute move across its previous eight results.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹263 cr | ₹304 cr | -13.64% | +17.11% |
| Other income | ₹4 cr | ₹28 cr | -84.55% | -86.54% |
| Expenses | ₹146 cr | ₹143 cr | +1.93% | +26.97% |
| Operating profit | ₹117 cr | ₹161 cr | -27.49% | +6.74% |
| Operating margin (%) | 44.42% | 52.91% | — | — |
| Interest | ₹0 cr | ₹0 cr | +0.00% | -20.00% |
| Depreciation | ₹18 cr | ₹17 cr | +4.27% | +24.72% |
| Profit before tax | ₹103 cr | ₹172 cr | -39.96% | -18.85% |
| Tax | ₹23 cr | ₹39 cr | -39.89% | -12.61% |
| Net profit | ₹80 cr | ₹133 cr | -39.98% | -20.52% |
| EPS (₹) | ₹3.84 | ₹6.38 | -39.81% | -20.00% |
Operating margin of 44.42% compares with a Financial Services sector median of 59.41% across 52 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -2.65% | -3.16% |
| Next session | -1.36% | — |
| 5 sessions | -3.55% | -2.80% |
| 15 sessions | -4.29% | — |
| 30 sessions | -0.63% | — |
Volume on the results session was 2.13× its 20-day average.
What to watch
- Whether consolidated operating margin holds above 44.42% after two consecutive quarterly declines.
- Whether revenue recovers from the -13.64% QoQ decline while expenses stop growing faster than revenue.
- Whether other income remains around 4.19% of pre-tax profit rather than becoming a larger earnings driver.