Shares of Central Depository Services (India) Ltd (CDSL) are in a free fall since they turned ex bonus on August 23. CDSL stock hit a record high of Rs 1664.40 in the same session. The stock slipped 9% till Thursday, falling for four straight sessions. In the current session, the stock was trading 0.81% higher at Rs 1443 against the previous close of Rs 1431.40 on NSE. The stock is not listed on BSE.
Total 40.62 lakh shares of the firm changed hands amounting to a turnover of Rs 585.78 crore. The stock has a beta of 0.9, indicating low volatility in a year.
In terms of technicals, the relative strength index (RSI) of CDSL stands at 59.7, signaling it's trading neither in the overbought nor in the oversold territory.
The stock has a beta of 1 indicating average volatility in a year.
Jigar S Patel, manager at Anand Rathi expects the stock to trade in a range of Rs 1350 and Rs 1550 in the short-term.
"Support will be at Rs 1400 and resistance at Rs 1485. A decisive close above the Rs 1485 level may trigger a further upside to 1550," said Patel
Kushal Gandhi, Technical Analyst, StoxBox said, "The price action of CDSL succumbed to profit booking from the life highs of Rs 1664 and has retraced to its shorter-term moving average acting as immediate support. However, the relative strength index on the daily and higher timeframe indicates potential signs of momentum waning. The confirmation of trend continuation comes on a decisive close above Rs 1665. We thus recommend avoiding buying CDSL at the prevailing market price."
ICICI Securities has assigned a 'reduce' rating against 'Hold' earlier, as the domestic brokerage believes the peak cycle multiples -- the stock trades at 53 times one-year forward EPS; and risk of lower earnings growth on high base make the risk-reward unfavourable on the counter.
However, the brokerage has raised its price target on the stock to Rs 1,320 from Rs 1,118 earlier.
"If markets are factoring in any major increase in cash volumes from restriction in options, this is likely to happen more in intraday segment compared to delivery. CDSL benefits only on more volumes in delivery segment. Additionally, as a trend, delivery as a percentage of total cash trades has declined from 26 per cent in FY18 to 21 per cent in FY24," said the brokerage.
The CDSL stock price turned ex-bonus in a ratio of 1:1 on August 23. After the stock turned ex-bonus, the CDSL stock rose over to its 52-week high of Rs 1664.40 on NSE. The CDSL board announced its first ever bonus issue of shares in July this year.
The bonus shares will be issued within two months from the date of the board approval, i.e. on or before September 1, 2024, the company said in July.
CDSL reported a 82% rise in net profit for the quarter ended June 2024. Profit climbed to Rs 134.20 crore in the last quarter compared to the Rs 73.57 crore profit in the corresponding quarter of the previous year. Revenue in Q1 surged 72% to Rs 257.38 crore from Rs 149.68 crore in the same quarter last year.
Central Depository Services (India) is a Depository registered with SEBI. CDSL was set up with the objective of providing convenient dependable and secure depository at affordable cost to all market participants.