We hereby present you our investment idea for Equity Investment i.e “Pick of the Week”. A thorough analysis of company, industry and economy goes behind our stock ideas for you. With the “Pick of the Week”, you may earn superior returns in stock market over a time horizon of 6 – 9 months.

INVESTING RATIONALE

• We like CDSL for its granular and diversified revenue stream with huge optionality from new business avenues like digitalization of academic records, warehouse receipts amongst others

• Annual issuer charges: The segment continues to grow stable, at 8% YoY in FY18. CDSL charges the registered companies on folio basis or on networth basis (i.e. on capital base). Management indicated that 17% of the registered companies were charged on a folio basis and contributed ~58% to revenue from annual issuer charges

• Transaction revenue & BO penetration: CDSL’s share in incremental BO accounts increased from 60% FY17 to 65% in Q4FY18. It is catching up with the market leader (NSDL), with CDSL’s market share increasing from 44% (FY17) to 46.5% in FY18.

• Academic records: CDSL has begun the process of digitalizing academic records with 231 academic institutions which have signed up and 31 institutes which have signed the letter of intent.

• We maintain a BUY with a target of Rs.316.