CDSL share price surges over 5%, hits 52-week high on strong Q4 earnings. Should you buy, hold or sell?

Central Depository Services:

Central Depository Services share price rose by over 5% during Monday's session.  It is reaching a 52-week high after the company posted strong Q4FY24 results.

Central Depository Services (India) Ltd (CDSL) reported that its net profit for the quarter ended March doubled to ₹129 crore compared to ₹63 crore in the same period last year.

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Market performance:

Total income increased by 86% from ₹144 crore in the corresponding quarter of the previous year to ₹267 crore in the March quarter of 2023–24.

For the entire fiscal year 2023–24, the company recorded a net profit of ₹420 crore, marking a 52% increase over the previous year. Total income for FY24 was ₹907 crore, up by 46%.

CDSL share price opened at ₹2,185 on NSE, touching an intraday high of ₹2,199.90 and a low of ₹2,132.50.

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Analyst's perspective:

According to Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, "The stock has been on a strong uptrend, with post-result prices witnessing a significant gap-up opening. The bias remains very positive, with potential for further upward movement in the near term. Any dips could present buying opportunities, with support levels at 2,050–2,080 and resistance at 2,250."

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Dividend announcement:

The board recommended a final dividend of ₹19 per equity share for FY24, subject to shareholder approval.

​ Additionally, a special dividend of ₹3 per equity share was proposed, bringing the total dividend payment per equity share to ₹22.

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Brokerage outlook:

Nuvama Institutional Equities raised its target price for CDSL to ₹2,270 from ₹2,090, maintaining a 'hold' rating for the stock.

The brokerage noted that transaction fees, IPO fees, and KRA/KYC fees saw a revenue increase of 93% YoY/12.3% QoQ to ₹241 crore, surpassing forecasts.

APAT increased by 104.8% YoY/20.3% QoQ to ₹129 crore, while EBIT margins remained stable at 61.4% (+13bp QoQ), resulting in an EBIT beat of 10.9%.

We recommend investors to approach with experts before investing in any companies.