NSDL gets ‘Neutral’ rating as Motilal Oswal initiates coverage, sees 8% downside

Motilal Oswal Financial Services has initiated coverage on National Securities Depository Limited (NSDL) with a ‘Neutral’ rating and a 12-month target price (TP) of Rs 1,200, implying a potential downside of around 8% from current levels.

This target is based on a valuation of approximately 45 times estimated FY28 earnings per share (P/E ratio). The brokerage firm believes that while NSDL operates in a favorable industry with strong fundamentals, its current stock price already reflects most of the positives.

According to the report, NSDL is expected to deliver a compound annual growth rate (CAGR) of 5% in revenue, 14% in EBITDA, and 15% in net profit (PAT) over FY2025–28. Operating in a duopoly market with CDSL, NSDL enjoys superior pricing power and a strong presence in high-value accounts. Despite this, Motilal Oswal believes the stock is fairly valued and that further upside may be limited in the short to medium term.

The broader opportunity for India’s capital markets remains significant, driven by the ongoing financialization of savings and relatively low demat penetration in India — currently around 15%, compared to over 60% in the United States.

NSDL, being the first and one of only two depositories in the country, is uniquely positioned to benefit from this long-term structural shift. The company stands to gain from both the increasing participation of retail investors and the growing custody value from institutional and corporate accounts.

NSDL commands a dominant position in the institutional, custodian, and large corporate segment, leading to revenue per active account of approximately Rs 157 in FY25 — nearly three times higher than its peer, CDSL. Furthermore, NSDL services over 70% of India’s unlisted corporates that are mandated to dematerialize their shares. This ensures a steady stream of recurring issuer charges and creates a sticky business model, as clients rarely migrate once integrated into the depository system. With the unlisted market in India expanding steadily, this segment offers substantial long-term growth potential.To further strengthen its retail footprint, NSDL has increased its focus on investor engagement and digital onboarding, particularly in Tier-2 and Tier-3 cities, through strategic partnerships with fintech brokers. These initiatives have begun to bear fruit, with NSDL’s share of new demat account openings rising from 10% in August 2024 to 17% in August 2025, reflecting growing traction among retail investors.

Price range and market debut

NSDL made its stock market debut on August 6, 2025, at an issue price of Rs 800 per share. The stock opened at a premium of Rs 880 and quickly climbed to an intraday high of Rs 943 on its listing day, reflecting strong investor enthusiasm. Since then, it has experienced a broad trading range, with a 52-week low of Rs 880 and a 52-week high of Rs 1,425, highlighting continued interest from the market.

As of Wednesday at 11:20 AM, NSDL shares were trading flat at Rs 1,299.90, showing minimal price movement during the session. At this level, the company’s market capitalization stood at Rs 25,999 crore.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)