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Motilal Oswal Financial Services has initiated coverage on National Securities Depository Ltd. (NSDL) with a ‘Neutral’ rating and a target price of Rs 1,200 per share, citing the depository’s strong fundamentals but limited upside at current levels.

At 1:19 pm on September 17, NSDL shares were trading 0.05 per cent higher at Rs 1,298.95 apiece on the BSE (BOM: 544467), while the benchmark Sensex was up 0.29 per cent at 82,622.65.

Motilal Oswal said NSDL is uniquely positioned to benefit from India’s ongoing financialisation, with demat penetration still at 15 per cent compared with over 60 per cent in the US. NSDL earned an average of Rs 157 revenue per active account in FY25, nearly three times that of rival CDSL, supported by stable custody-linked income instead of pure transaction-based fees.

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The depository also handles over 70 per cent of unlisted corporates mandated to dematerialise, providing sticky issuer revenues, the brokerage noted.

NSDL has ramped up retail investor outreach via fintech broker partnerships and digital onboarding in Tier-2 and Tier-3 cities, which helped its incremental market share in new demat accounts grow from 10 per cent in August 2024 to 17 per cent in August 2025, with overall market share at 20 per cent.

Subsidiaries NDML (KYC Registration Agency, insurance repository) and NPBL (payments bank) contributed about 55 per cent of consolidated revenue in FY25. NDML reported over 35 per cent EBITDA margins, while NPBL — which handles nodal banking for UPI-based IPO subscriptions — has turned profitable but remains in investment mode.

Motilal Oswal expects NSDL to deliver 5 per cent revenue CAGR, 14 per cent EBITDA CAGR and 15 per cent PAT CAGR between FY25 and FY28, with margins improving from 53 per cent in FY25 to 58 per cent by FY28.

However, analysts noted that the stock’s current valuation already factors in most positives, leaving limited near-term upside.

The brokerage flagged weaker equity market sentiment or stricter Sebi fee structures as downside risks, while upside triggers could include higher retail participation, a surge in IPOs and more pricing flexibility through regulatory changes.

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Senior Sub-editor at Zee Business English

shweta.shukla@India.com

Shweta Birendra Shukla is a journalist covering the stock market and corporate affairs, with prior stints at Business ...LATEST NEWSBy accepting cookies, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.