Neutral NSDL; target of Rs 800: Motilal Oswal

What happened

Motilal Oswal reiterated its Neutral rating on NSDL and set a one-year target price of Rs 800. The broker raised its FY27 and FY28 earnings estimates by 10% and 9%, respectively, after NSDL reported operating revenue growth of 36% year on year and EBITDA growth of 11%.

Confirmed

Global impact / market context

The report links stronger-than-expected operating performance to higher earnings estimates, suggesting revenue growth and cost control could support NSDL’s profits. However, the Neutral rating signals that the broker does not see enough in its analysis to recommend a stronger positive stance, despite the estimate increases.

Analyst inference

The company’s two largest reported business areas moved differently: banking services, 54% of revenue mix, rose 66% year on year but fell 7% quarter on quarter; depository revenue, 42% of the mix, rose 12% year on year. These figures show uneven growth across services.

Confirmed

What to watch

1. Check whether NSDL’s next results sustain revenue growth, particularly in banking services, where the report recorded strong annual growth but a quarterly decline. Analyst inference
2. Track operating expenses against revenue: expenses rose 48% year on year, while EBITDA increased 11%, making continued cost control important to profit growth. Analyst inference
3. Compare future results with Motilal Oswal’s raised FY27 and FY28 earnings estimates and its one-year Rs 800 target price, based on 35 times FY28 earnings. Confirmed

Evidence

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