What explains the sharp growth in the profits of CDSL in the Sep-20 quarter?
Answer
Answer
India’s second largest depository by custody value and the largest by number of accounts, CDSL, reported a 68% jump in profit after tax at Rs.48.87 crore for the three months ended September 30, 2020. This was largely driven by a spurt in new demat accounts.
This is in contrast to the profit of Rs.29.06 crore in Sep-19 quarter. In the post COVID period, there has been a geometric rise in the number of demat accounts as young investors entered the market in a big way. Most of the new accounts have gone to CDSL.
For the Sep-20 quarter, CDSL reported total income at Rs.101 crore, a spurt of 46% on a yoy basis. Interestingly, just in the last 3 months, the number of new active beneficial ownership accounts with CDSL increased by 2.9 million to 2.61 crore in total.
CDSL currently operates through a network of 593 depository participants offering services across India from over 20,000 locations, in addition to its digital offerings. In the last 5 months, digitisation has proved to be the key to business growth and CDSL has proved that.