National Securities Depository Ltd (NSDL) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to the Q4 Q2 FY '27 results conference call of National Securities Depository Limited, that is NSDL. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Aarzoo Khandelwal. Thank you, and over to you, ma'am.
Aarzoo Khandelwal (National Securities Depository Ltd): Good evening, and welcome everyone. Thank you for joining us today to discuss NSDL's Q2 FY '27 financial and business performance. The recording of today's earnings call and the transcript will be uploaded on our website under the Investor Relations section. The financial results, investor presentation, and the press release are also available on the website. For today's call, NSDL is represented by Mr. Vijay Chandok, Managing Director and Chief Executive Officer; Mr. Subhash Kelkar, Executive Director, Critical Operations; Mr. Prashant Vagal, Chief Operating Officer; Mr. Jigar Shah, Chief Financial Officer; Mr. Sameer Patil, Chief Business Officer; Mr. Abhijit Kamalapurkar, Managing Director and Chief Executive Officer of NSDL Payments Bank; Mr. Rajiv Gupta, Managing Director and Chief Executive Officer of NSDL Database Management, and myself, Aarzoo Khandelwal, from Investor Relations. The leadership team will give us a brief overview of the operational and the financial performance of the quarter gone by, which will be followed by a Q&A session. With this brief introduction, I now invite Mr. Vijay Chandok for his opening remarks.
Vijay Chandok (National Securities Depository Ltd): Thank you, Aarzoo. A very good evening, ladies and gentlemen. Let me start by extending a very warm welcome and greetings of the season to all our shareholders, investors, and analysts joining us today for the quarter 2 2027 earnings conference call. I sincerely appreciate the continued trust that all our 9.1 lakh valued shareholders have placed
Vijay Chandok (National Securities Depository Ltd): We remain committed to building a stronger business, deepening our competitive position and delivering sustained value to all our stakeholders. I am pleased to have with you, I am pleased to have you with us and as we discuss our performance and progress for Q2 FY27. To place our performance in perspective, let me first briefly outline the broader market environment during the quarter. Well, as anticipated, the primary market activity rebounded strongly during Q2 FY27 after a relatively muted first quarter. During the first nine months of the calendar year 2026, India's primary market raised over 1.17 lakh crores through 244 IPOs with nearly 90,000 of this being raised in Q2 FY 2027 alone, which included the landmark listing of National Stock Exchange. Investor participation remained healthy with total number of Demat accounts in India now crossing 24 crore. With nearly 90 lakh Demat accounts getting added in Q2 FY 2027. And when you compare this with Q2 FY 2026, that number was 79 lakh. So, the Demat account addition during this quarter on a YoY basis was up by 14.2%. NSE's unique investors reached approximately 13.7 crore by the end of September 2026 compared to 12.9 that was at the beginning of the year in April 2026. Against this backdrop, let me turn the attention now to NSDL. This quarter, our efforts remained centered around a few things, which I thought it's important to highlight. One is growing our customer franchise. Second was improving our customer experience and, thirdly, it was strengthening the investor awareness. And in that context, a few highlights I would like to develop to highlight to, a few developments I would like to highlight, please, for your attention. Starting with our depository participant business, during this quarter, the total number of Demat accounts for NSDL reached 4.72 crores. We also reached 320 depository participants. In this quarter alone, we added about four new DPs. And if you look at H1 in the current year, we have added 10 in all. So, these depository participants provide services in more than 2,000 cities and small towns. We hold, at present, 86% of the value of custody, totaling to about 5.6 trillion US dollars, which represents, 80% of that represents their equity base. During Q2 FY27, we added 15.6 lakh net Demat accounts, reflecting a continued account addition during the quarter. Market share came in at about 17.2% in Q2 FY 2027 compared with 17.6 in the sequential previous quarter. For H1, however, our market share increased to 17.4% from 16.6% in the corresponding H1 of 2026. Fintech brokers have continued to get added and today they account for 23.5% of our incremental Demat account sourcing. So, it has crossed 20% now and that stands at 23.5% at the end of quarter two, in quarter two 2027. You compare this with quarter two of FY 2026, that number was only 9.3%. So, this clearly reflects the growing ability of NSDL to attract the new-age fintech broker, thanks to our investments in technology. We would also high, like to highlight our continued traction in the Yuva plan, the youth plan that we launched, and the women's Demat plan, which now together account for approximately 45% of our incremental Demat account additions in Q2 FY 2027. Coming to our issuer and value-added, key value-added business services, we continue to expand our investor base, which has now crossed 1,18,000 issuers. Market share in the unlisted issuer segment stands in at about 72.5% in quarter two with 3,197 companies getting admitted to the platform during this quarter. The total number of events on our e-voting platform increased in the quarter to 3,160 from 2,924 last year same quarter. And our market share remained broadly stable at about 52.4% in quarter two FY 2027. Further, during this quarter, we focused on driving greater adoption of the 68 plus APIs that we introduced for DPs in the
Vijay Chandok (National Securities Depository Ltd): current as well as some of the earlier quarters, clearly helping us enhance customer experience, improve service delivery, and improve customer feedback across the depository ecosystem. We've also achieved an important milestone with the pilot launch of Demat 2.0, which is the next-generation platform which leverages the distributed ledger technology to support tokenized securities and enable real-time settlement through integration of the Reserve Bank of India's CBDC or the Central Bank Digital Currency infrastructure. We enabled online submission of Form 121, which was announced by Honorable Finance Minister in the budget, through NSDL's corporate website, simplifying compliance and providing issuers and stakeholders with seamless digital integration. We established an API-based interface with the National Stock Exchange to automate the creation of EGRs, or Electronic Gold Receipts, clearly improving process efficiency and supporting digitization of physical gold ownership, a business that is expected to grow in future. We also introduced API connectivity for online bond platform providers, the OBPPs, enabling real-time account and holding validations, electronic instruction submission to verify investor transactions in the bond market. And clearly, this is giving impetus to bond OBPP platforms and bond investments in the country. NSDL supported SEBI's nationwide project Jaagruk, which was launched in October at the hands of the Honorable Chairman of SEBI, by sharing this program envisages sharing investor awareness messages in English, Hindi and 11 other regional languages across the country. And NSDL leveraged its platform and DP ecosystem to do the same. In quarter 2 FY 2027, NSDL conducted more than 1,000, 1,259 multilingual investor awareness programs, reaching out to over 55,000 participants across 10 states, Union Territories, through online, offline and hybrid formats of training to corporates, defense services, educational institutions and women-focused forums. We also strengthened our leadership team with the appointment of experienced professionals. I had mentioned it perhaps in the last quarter, Mr. Subhash Kelkar has joined us as Executive Director, Critical Operations. He brings nearly 36 years of leadership experience in technology and capital markets, and most recently served as the CTO at the Bombay Stock Exchange. Mr. Ankit Sharma joined as Executive Director, Regulatory and Compliance, bringing in 31 years of experience in regulatory policy compliance and governance. He most recently served as the CRO, or the Chief Regulatory Officer Listing and Investor Compliance at the National Stock Exchange. We also welcomed Mr. Ashish Khandekar as the CTO. He brings in about 35 years of experience across technology and advisory roles, including experiences at the National Stock Exchange and the Power Exchange India Limited. While Jigar will take you through the detailed financials, I would like to mention that for quarter 2 FY 2027, at a consolidated level, our revenue for the quarter stood at 580.6 crore compared to 432.2 crore last year, up by 34.8% on a Y-o-Y basis. Profit after tax stood at 122.5 crore compared to 110.4 crore last year, up by 10.9% on a Y-o-Y basis. Well, the above numbers have to be viewed in the context of the fact that we are in a technology building phase. We continue to invest in technology resilience, cyber security, operational automation, use of AI, cyber security, and critical talent support for future growth. The pace of investment in critical talent, however, I would like to highlight, has now started moderating. As these investments mature in future, we do expect operating leverage to support margin normalization as we move forward. We remain firmly committed to upholding the highest standards of investor protection, strengthening trust, and advancing financial literacy to foster responsible participation in Indian capital markets. And of course, strong focus on governance. We'd like to thank the the Ministry of Finance, SEBI, RBI, and also all our DPs, issuers, investors, market intermediaries, shareholders and employees for their continued support. With that, I'll hand over the mic to Jigar
Jigar Shah (National Securities Depository Ltd): Thank you. Good evening, everyone. And thank you, Vijay. Let me now take you through our standalone and consolidated financial highlights briefly for the quarter ended 30th September, 2026 and for the half year, FY '27. For the Q2 FY '27 standalone, our revenue from operations for Q2 FY '27 '27 stand at 227.8 crores versus 204.2 crore in Q2 FY '26, that was a year ago, registering a growth of 11.6% on YoY basis and sequentially we grew by 25.1%. Our total income for Q2 FY '27 stands at 279.8 crore in Q2 FY '27 versus 250.6 crore in Q2 FY '26, a growth of 11.7% on YoY basis and sequentially, we grew by 27.4%. Just to make a note that ex-dividend, our growth stand at 19% on sequential basis. Our EBITDA for Q2 FY '27 stands at 171.6 crore versus 160.7 crores in Q2 FY '26, registering a growth of 6.8% on YoY basis. Our EBITDA margin for the current quarter stand at 63% and ex-dividend it's stand at 58.6%. Our net profit for Q2 FY '27 is at 126.7 crores versus 120.4 crores in Q2 FY '26, a growth of 5.2% on YoY basis and sequentially, we grew by 42.1%. Ex-dividend, we grew by 21.6%. Our PAT margin for the current quarter stands at 45.3%. Ex-dividend, our PAT margin stands at 41.4%. I would like to share a brief update on the first half year, which is the half-yearly FY '27 standalone highlights. Our total income on YoY basis registered a growth of 13.3%. It grew to 499.5 crore. Our net profit after tax for H1 FY '27 grew by 6.3% on YoY basis. And our net worth on standalone basis stands at 2,263.4 crore. On the technology front, as as part of practice, we update what we have capitalized in the H1, we have capitalized 23.9 crore in H1 2000 H1 FY '27 versus last year, full year number was 106. 106.1 crore. It is worth noting that NSDL standalone profit contributes approximately 88% of total consolidated profit. Let me briefly touch upon few operational developments across our subsidiaries. As far as NSDL Payments Bank is concerned, we are pleased to say that NPBL RuPay NCMC smart cards reached 1.3 crore MSRTC registration and over 100 crore in cumulative card loads in October 2026. That's the latest update. Supporting concessional bus travel in Maharashtra under government mandate effective September 1st, 2026. It's a very important milestone for us because that supports our float, as far as the Payments Bank is concerned. On customer deposit front, we saw growth of 1.6 times in retail customer base, growing to 54.3 lakh customers in Q2 FY '27. A year back, this number was 33.5 lakh. The deposit balances grew 1.4 times to 378.1 crore. Now coming to our another subsidiary, NSDL Database Management. With NSDL Database Management, our CRA records registered intermediaries grew to 2.06 crore records as of September 30th, 2026. I would also like to briefly update you on the insurance business. Following IRDAI guidelines, NDML incorporated NDML Insurance Depository Services Limited and filed the demerger application with NCLT, Mumbai, to transfer the insurance depository business. As of today, the cumulative number of dematerialized insurance created on our platform stands at 1.75 crore policies. And both of this subsidiaries are profitable and very important part of our strategies. With that, I will briefly update on the numbers with regards to Q2 consolidated financial highlights. Our revenue from operations for Q2 FY '27 stands at 545.9 crore versus 400 crores in Q2 FY '26, registering a growth of 36.5% and sequentially, we grew by 5.7%. Our total income for Q2 FY '27 stands at 582.6 crore in Q2 FY '27 versus 432.2 crore in Q2 FY '26, a growth of 34.8% on YoY basis and sequentially, we grew by 3.9%. Our EBITDA for Q2 stands at 178.5 crore versus 158.8 crore. We are registering a growth of 12.5% on YoY basis. Our EBITDA margin on consolidated basis for the current quarter stands at 30.6%. Finally, our net profit after tax for Q2 is at 122.2 crore versus 110.4 crore,
Jigar Shah (National Securities Depository Ltd): a year ago, quarter 2 FY '26 registering a growth of 10.9% on YoY basis. And sequentially we grew by 24.6%. Our PAT margin stand at 21% for the current quarter. For the first half of '27 on consolidated highlights, as far as H1 is concerned, the total income we have registered a growth of 46.7% to 1143.1 crore while net profit after tax for half yearly grew by 10.4% to 220.8 crore. With that, I will conclude my opening remarks. Once again, thank you for joining us today and I will open up the floor for Q&A session. Thank you.
Moderator: Thank you, sir. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and then one on the touch tone telephone. If you wish to remove yourself from the question queue, you may press star and then two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all the participants, you may press star and one to ask a question. We have the first question from the line of Rishabh from RBSA Investment Managers. Please go ahead.
Rishabh (RBSA Investment Managers): Yeah. Thank you for the opportunity. I just wanted to get a sense on this Demat 2.0 opportunity that you mentioned in the press release. So could you speak about how does it increase our overall TAM and what stage of commercialization are we in and do we have a first mover advantage advantage here?
Vijay Chandok (National Securities Depository Ltd): Yeah, thank you for your question, Rishabh. This is a pilot launch first and foremost. This is in the sandbox of SEBI. The intent is to, you know, take the entire Depository platform to completely new, advanced technology using blockchain as opposed to the conventional model. That This is an initiative which is driven by SEBI. So, the new model is based on DLT technology. It is right now restricted to only the bonds. How does it give advantage to the investors and to the market? Unlike the current traditional process where the settlement process takes place either on T+1, T+2 or T+3, and I'm talking about bonds depending on the type type and category of the bonds. Anything which comes as tokenized bonds will come with an settlement mechanism which is instantaneous. So, it is exactly like similar to UPI where you just send, remit the money and the receiver gets it. It is similarly, you remit the payment and you get the bond immediately. So, right now, in the first phase of the pilot it has been launched mainly for only the issuance service. The secondary market developments is still planned, it is work in process, but you know, SEBI expects that to be completed by us as well. So, that would be in future. SEBI has made it started off with this whole initiative of tokenization with bonds. Obviously, the intent is to watch the actual experience because this is a new concept. Globally also, this is a relatively new development. So, there are no global experiences to lean on really. So, this market is likely to evolve as time goes forward based on the experience, feedback from the investors. This is being done This is being done jointly by CDSL and NSDL. So, it is not as if we are, you know, in a sense got early mover, but we have moved together. And we have seen three issuances on the platform so far. And the total value of the three issuances, these are bond issuances, primary issuances, is I think a little over 1,000 crores. This platform uses, as I mentioned, the CBDC for settlement. So, you can't use your traditional Rupee for rupee money for making payments. You have to open a wallet account with the designated RBI bankers who have this service. For opening the new Demat 2.0, you don't need to do additional KYC. You simply extend it to your own sort of existing demat account to open this Demat 2.0 based on a request. It is also right now open only for the institution
Vijay Chandok (National Securities Depository Ltd): not open for the retail investors. So based on the experience of retail investors, based on the development of the secondary market trading capabilities, we, you know, SEBI will evaluate what are the next steps that we have to do. But I think the exciting thing is that it's a segue of opening a new horizon of investor investment sort of a avenue, which is tokenized bonds. And tomorrow, there could be tokenized other instruments, financial instruments that can also emerge. So it's a whole new market opportunity that could open in future. But that is obviously subject to regulatory developments and evolution.
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