Ladies and gentlemen, good day and welcome to CDSL Q2 FY 2026 earnings conference call hosted by HDFC Securities. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after, the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. Ladies and gentlemen, please note that CDSL does not provide specific revenue or earning guidance. Anything said on this call which reflects CDSL's outlook for the future or which could be constituted as a forward-looking statement must be reviewed in conjunction with the risk that the company faces. I now hand the conference over to Mr. Amit Chandra from HDFC Securities. Thank you, and over to you, Mr. Chandra. Yeah. Yeah. Thank you, operator. Good afternoon. Good afternoon, everyone. On behalf of HDFC Securities, we welcome you all to the CDSL Q2 FY 2026 earnings call. Today, we have with us the management team of CDSL, represented by Mr. Nehal Vora, MD and CEO, Mr. Girish Amesara, Chief Financial Officer, and other senior leaders from the management team. We will start with a brief overview of the quarter by Mr. Nehal Vora, and then we will open up the floor for the question-and-answer session. Thank you, and over to you, Nehal, sir. First of all, thank you so much, Amit. Very good afternoon and welcome, everyone. I hope each one of you and your loved ones are safe and healthy. Thank you for joining us today to discuss CDSL's financial results for the second quarter and half-year ending September 30th, 2025. We posted a detailed investor presentation on our website for your reference. I'm joined by the CDSL Group's leadership team. Let me start with the industry highlights and then take you through some of the key aspects of our performance. The combined average daily turnover at BSE and NSE for the quarter two ended FY 2026 was around INR 1 lakh crore. It is about 18% less than the September 2024 quarter as per the SEBI bulletin. I am also glad to report that we crossed INR 20 crore demat accounts as an industry. CDSL saw more than 6.5 million accounts open in the quarter, bringing CDSL's total number of demat accounts to INR 16. 5 crore, maintaining our 80% market share. This quarter also marked the launch of the nomination phasse II, a feature designed to simplify and strengthen the nomination process for our investors. This enhancement is part of our ongoing investor access. We believe that enabling investors to secure their holdings with clarity and convenience is a small but meaningful step towards long-term financial empowerment. Secondly, investor education continues to be the cornerstone of our mission. In collaboration with SEBI and other market infrastructure institutions, we actively participated in the World Investor Week, a global initiative to promote financial literacy and responsible investing. Under SEBI's guidance, we also launched the SEBI vs. Scam campaign, which aimed at raising awareness about fraud prevention and to empower investors to make informed decisions. These efforts are aligned with our belief that an informed investor is a protected investor. I am glad to share that in quarter two of FY 2026, we have reported a total income of INR 290 crores and a net profit of INR 128 crores. The CFO, Girish Amesara, will take you through the detailed numbers shortly. As we reflect on the quarter, our focus remains on building infrastructure that is not only scalable and secure but also inclusive and investor-first. We are prioritizing our #AATMANIRBHAR investor-focused approach while striving for innovation resulting in consistent and sustained financial and business performance. I would like to reaffirm that CDSL's focus remains on enhancing the capital market ecosystem by enhancing efficiency, trust, and transparency. The market, with its ebbs and flows, continues to support the Indian economy, and we owe all the progress to a strong ecosystem who put their constant faith in us. My appreciation and gratitude to our stakeholders, all the SEBI, RBI, and all the other regulators, the depository participants, investors, issuers, and other market participants, the shareholders, and last but not the least, the employees. Thank you, and over to you, Girish. Thank you, Nehal. Good afternoon to all of you. Speaking on consolidated quarterly performance, the total income for the quarter ended September 2025 is at INR 341 crore, as against INR 359 crore for the corresponding quarter of the previous year. The net profit for the quarter ended September is at INR 140 crore, as against INR 162 crore for the corresponding quarter of the previous year. On a half-yearly performance on a consolidated basis, the total income for the six months ended September 2025 is at INR 637 crore, as against INR 645 crore for the corresponding six months. The net profit for the six months is at INR 242 crore, as against INR 296 crore for the corresponding six months. Speaking on standalone half-yearly performance, the total income for the six months ended September 2025 is at INR 602 crore, as against INR 542 crore for the corresponding six months. The net profit for the six months is at INR 280 crore, as against INR 276 crore for the corresponding six months. On a quarterly standalone basis, for the quarter September 2025 is at INR 290 crore, as against INR 324 crore for the corresponding quarter of the previous year. The net profit for the quarter ended September is at INR 128 crore, as against INR 171 crore for the corresponding quarter of the previous year. Kindly note that during September 2024 quarter and June 2025 quarter, our reported profit had included a significant contribution from dividend received from our subsidiary, amounting to INR 47.5 crore and INR 62 crore, respectively, for the said quarters. The dividend has positively impacted our total profits for the quarter. In comparison, the profit reported for September 2025 quarter has entirely been generated from our core operations and other regular business activity. With this, I will request Sunil to take us through CVL numbers. Thank you. Over to you, Sunil. Good afternoon, everyone. So far, as CDSL results are concerned for the half-year ended fiscal year 2026 versus half-year ended fiscal year 2025. CDSL had a total income of INR 92.84 crore against INR 144.01 crore. The total expenditure was INR 57 crore as against INR 55.97 crore. PBT was INR 36 crore versus INR 88 crore for the previous half-year. The profit after tax was INR 27 crore versus INR 66 crore as compared to the previous year. With this, I hand over the floor for questions and answers. Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Once again, a reminder to all the participants that you may press star and one to ask a question. The first question comes from the line of Lalit Dil with Ikwiris Securities. Please go ahead. Yeah, Sunil. Thanks. Congratulations on a good set of numbers. Just two questions. Firstly, we have seen a. Lalit, can you really speak up a little bit? Your voice is a little soft. Cannot be heard clearly. Yeah. Hi, Sunil Is this better? Yes, it's better. Yes, sir. Just two questions. In this quarter, we have seen a strong revival in this IPO and corporate action income. I just wanted to understand, within the two, what would be the split between IPO-led income as well as the corporate action income? Any qualitative aspect on this will also work. Secondly, in the CVL business on the KYC, one of our competitors has highlighted that they have also started receiving newer KYCs from the brokerage clients as well. I just wanted to understand, how are you seeing the overall competition landscape over there? Yeah. Okay. The first number, we don't give it out in the public domain. So you'll have to take it as a consolidated number. This is a practice with. On the second question, I'll ask Sunil to answer. Yeah. I mean, if you are referring to they have just started operations. We have not really seen any great impact. I believe they have also stated that some of the fintech brokers have joined us. I hope that answers your question. Mr. Dil are you done with the question? Yes, sir. Thank you. Thank you. Next question comes from the line of Amit Chandra with HDFC Securities. Please go ahead. Yeah. Thanks for the opportunity. My first question is on the annual issuer charges. Obviously, we have seen strong growth year on year, but on a sequential basis, it has been almost flat. This is despite sequential strong growth in terms of the number of issuers and the ISINs that we have, and we have also added a lot of around 1,400 unlisted companies as well. Has there been a sharp drop in the number of folios? If you can also break up in terms of the listed and unlisted revenue for the annual issuer charges, that would be the first. Second, last time, you also highlighted that there have been some chances in terms of taking a hike in terms of the annual issuer charges, wherein it is required to fund the technology cost because technology cost has been rising, and there are still a lot of areas where the MIS has to invest. Is it a consideration in terms of an area where the regulator can take it up and allow the annual issuer charges to go up? Thank you. I'll take the second question first and ask the CFO, Girish, to answer the first question. The second question is, again, I have specifically mentioned, in fact, I remember stating that we generally don't disclose our conversation with SEBI. As has been happening in the past, periodically, the charges are increased. The discussion, as and when it fructifies and it is as necessary, advice would be issued by SEBI to enable the increase in the charges. I'll ask Girish to answer the question. Amit, the annual issuer charges normally are raised in the first quarter of the financial year to all the companies which are admitted till March based on the process that we follow every year and as per the SEBI circular. Now, having said that, the incremental revenue that would accrue to, because CDSL, would be on account of newly fresh admitted company, which is in line with what we had achieved during last quarter. In this quarter, we have admitted some 3,593 unlisted companies, and that has accrued the relevant income in our annual issuer charge. I hope that will answer your question. Okay. Just to follow up on this. In terms of the unlisted market share, if you can state what is the unlisted market share that we have currently. We also now can issue the ISIN. Can there be an increase in the unlisted market share in terms of number of companies we are adding versus the competition? The market share in unlisted is about 30%-32%. The ISIN system is under testing between the two depositories. As soon as it is made live, we are hopeful that then there will be a level playing field across both depositories. We will have to wait and watch. Okay. And sir, my last question is on the technology and the employee cost. Obviously, it has been growing up every quarter, and in this quarter, the trend has been similar to what we have seen earlier. Any kind of, I know you do not give the forward-looking numbers, but in terms of the technology cost, whether the similar pace of growth will continue or we can see some normalization because it has been, I think, the third or fourth year where we are seeing very high kind of a growth in the technology cost. Is there any point where we can assume that most of the investments are behind or still a lot of things are pending from our end? I think, really, Amit has said this multiple times. We are constantly in an endeavor that human resource and technology are the two core inputs or reasons for our business. Creating the value proposition on both sides is very, very critical. We have been embarking on a journey to ensure that our technology sophistication and our technology advancement could reach a state which ensures that it creates that value proposition for all the new players which are coming in. The recent survey report which SEBI has published on the investors shows that there is a significant upside which is possible of people wanting to enter the securities market. Therefore, it is but natural that CDSL would embark on a journey to ensure more proactive technology investments because technology takes time to be built, tested, and then rolled out. Besides that, there are a number of regulatory initiatives and newer initiatives in terms of new circulars and products which are getting rolled out. All this will require necessary investments to be made into technology, and that has been our core driver, both the human resource and the technology. Basically, the environment is very, very vibrant and changing, and CDSL has to keep in sync with that to ensure it continues to create the value proposition for all the stakeholders. Okay, sir. Thank you. I'll do the best. Thank you. Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Madhukar Ladha with Nuvama Wealth. Please go ahead. Hi. Good afternoon, sir. Congratulations on a great set of numbers. Thank you. First, I wanted to understand on the online data charges thing. I think one of the competitors also made a remark, which implied that the number of fetches a mutual fund would require to do from a KRA would reduce. I did not really understand the full context and what is happening with this. I wanted to understand what is the discussion and why, if the fetches would reduce from KRA agencies. That is my first question. Second, on the annual issuer charges, I wanted to understand the split between one-time charges. I believe that you do charge a one-time sort of processing fee when you admit unlisted companies. How much is that, and what is the one-time charges that you have charged in this quarter? Also, the listed companies which are getting sort of listed in this year, during this year, we are seeing a lot of listings happening. I wanted to understand in what form. I understand how the revenue will build up for these companies in financial year 2027, but I wanted to understand in financial year 2026, how do we bill them? These would be my two questions. Thanks. On the first question, before I ask Sunil to really reply, see, any change will require some kind of a circular from SEBI. I think it would be most prudent to wait for the SEBI circular to come in before really assessing the impact on whether the fetch will reduce or not reduce, etc. That would be my—this has been my experience—that it is best to wait for the SEBI circular before you kind of come to what would be the potential impact. I will ask Sunil to add in to that question. See, today also, if you see that the AMCs fetch a particular PAN only once during the lifetime of the investor. If you are saying they are going to reduce that PAN, you're saying they will not fetch it at all, I don't think that would be possible. Secondly, if you see the RTA circular, the AMCs or the RTAs have to maintain a Chinese wall between the operations between the AMCs which they are handling. That effectively means the RTAs cannot share the KYC amongst themselves. Keeping that in mind, unless somebody is violating the guidelines, I do not see in the current environment or with the current guidelines or the regulations that the KYC fetch from the AMCs will reduce further. Got it, sir. Got it. On that second question, I'll ask Girish to answer, second and third. In terms of unlisted issuer charges, in this quarter, we have a value of INR 3.53 crore. In terms of application processing, we have a number of INR 5.39 crore. This is based on 3,593 companies admitted during this quarter. With respect to the listed securities, which, on the IPO, your question was how it will span out on issuer charges. If the investor holds the security throughout the year, then, based on the ISIN being there in that particular demat account, the annual issuer charge would be decided. Now, it is an average of a full one year, so depending upon the holding of that particular security in the ISIN, the necessary issuer charge would be calculated. Yes, sir, I understand that, but that will be applicable for FY 2027. I wanted to understand in FY 2026, let's say. In FY 2026, again. The same formula applies. Okay? If there is an ISIN security being there in that particular ISIN and demat account, then it will be counted in the issuer income's value c ompetition. In ompetition. In addition to that. We earn the corporate action charge when a company gets IPO. Is credited, proceeds of IPOs are credited in the investor account, we earn the corporate action charge in the first year. Second year on inwards, he starts paying the issuer annual issuer charge. Okay. So first year, in FI26, you get the corporate action fees, which is that INR 11 crore per folio. INR 10 crore. Yeah INR 10 crore per credit. That charge. Then from FY 2027. You follow the standard formula then. Yes. Yes. Yes. Okay. Got it. Got it, sir. Thank you. That's it from my side. All the best. Thank you. Thank you. Next question comes from the line of Devesh Agarwal with IIFL Capital. Please go ahead. Yeah, good afternoon, everyone. Thank you for the opportunity. Firstly, sir, congratulations on a good set of numbers. A few things that I wanted to understand. First, the clarification one. In the annual issuer charges, you mentioned two revenues. One was INR 3.53 crore, which you said has come from unlisted, and INR 5.39 crore, which was the processing. This processing will include only unlisted, or this is unlisted and listed both? Unlisted. Okay. So the total unlisted is this INR 3.53 crore+INR.39 crore? Yes. Right. Sir, within the transaction charges, how much would be the pledge income? Pledge income is INR 5.09 crore in this quarter. Okay. What was this last quarter, 1 Q? INR 5.05 crores. Similarly, sir, could you also share the breakup for e-cash, e-voting, and e-AGM, these other which are part of your other revenues? What was that in 2Q? Sure. The other income is at INR 59 crore. Which is breakdown into. Consolidated account statement revenue of INR 12 crore, e-voting income of INR 20 crore, investment income of INR 21.46 crore, and other operating revenue of INR 6 crore. Right, sir. Sir, if we see there has been some little restatement in your KYC income, which has been restated upwards for the previous quarters also. Could you explain what reclassification has been done? Earlier in our presentation, we were providing the only online data charges from CDSL Ventures Limited. Now we have included other KRA income as well in this category, like KYC income and others. Sorry, sir. Earlier, it was in other income category. Yeah, yeah. What was this line item, sir? Basically, in the CDSL Ventures, we handle multiple projects apart from the KRA. One is the online data charges. The other income pertains to the other product projects, what we are doing like e-voting, sorry, e-sign, e-KYC, and all the other products. Now this has been shown under KYC? Yes. It is an improvement. What we believe is that we should be constantly improving ourselves. Accordingly, we have tried to present all KRA-related revenue. Rather than including other non-significant part in other income, we have started including all KRA-related income into one portion. I hope that suffices your question. Sure, sir. That explains. Sir, one last question. If you see market share on incremental demat account addition, right? It has been coming down for the last two, three quarters. If you see, it peaked somewhere around 3QFY25, when we had 93% market share. This number in this quarter has come down to 82%. Any particular reason that you can highlight where we've been losing market share? We've not been losing market share. Again, percentages you have to look at the absolute numbers. Percentages is basically a relative number. What is the total accounts which have been opened? We'll see the absolute numbers which are getting opened between quarter to quarter. It has steadily been on an increase. Basically, some of the—hence, I think that percentage is only an indication. It is not something which is showing a downward trend as a percenatage doesn't mean that the number of accounts are—if the number of accounts opened are going down, then it's an area of potential area of concern. That also is—see, again, I have always stated this in various investor calls that this company is finally a market infrastructure company like a road. You have to look at a little more medium-term and long-term perspective. Quarter to quarter is kind of a snapshot, but these are all a culmination of various market conditions, the external environment, etc. I think you need to look at it from that particular perspective. If we would try to understand, say, for example, among your top 20 clients who contribute the maximum in terms of new account creations, is there any client which was earlier exclusively working with CDSL and now is working with both the depositories? Has that changed among your top 20 clients? We don't give any client-specific information. It's a culmination of all this. Once again, I would really urge you, if you look at the numbers on quarter to quarter. On the first quarter, we had opened 5.6 million demat accounts. Quarter two, it has been 6.6 million demat accounts. Right, right. Perfect. Thank you so much. Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Sanket Kudav with Avindas Park. Please go ahead. Yeah. Thank you for the opportunity. Sir, my question is related to your tax rate. For the first half, it looks to be around 27.4% for the console tax rate. Is it fair to assume that in the second half, your tax rate will be lower so that in the full year, it will be around 25%-ish? That is my first question. The second question with respect to data keeping is that if you can quantify your impairment cost in the current quarter, that will be useful. Sure. Sankwt the tax rate of CDSL, we are at 25.12% totally, 22% base rate, and then education cess and surcharge. Having said that, when we look quarter on quarter, our average tax rate would range from 22%-25%, depending upon various kinds of impact of the deferred tax assets or deferred tax liability. I hope that suffices your query. With respect to data set, the data's provision is at INR 5.07 crore. INR 5.07 crore. Okay. Okay, sir. Second question is, that means last quarter, you mentioned that your number of folios were INR 22.76 crore. Any incremental growth in that number in the current quarter compared to the previous quarter? Another thing we just want to understand is, on insurance repository. Last year, given in the annual report, insurance repository revenue looks to be around INR 8 crore for the full year. Last year, many insurance companies probably started opening demat accounts or insurance repository accounts. Still, there is not a meaningful growth. Just wanted to understand revenue growth outlook and basically, how do you want to scale this business, what kind of market share you think, and what kind of tie-ups you have made so that we can see a different trajectory in the insurance repository part? Sanket, on the folio count that we had provided in the first quarter, it was 3.326 million. What the number that you said, it was of previous year. Normally, when we annual issuer invoicing in the first quarter, that number remains constant throughout the year. With respect to the insurance-related question, we will request Latesh Shetty to respond. Yeah. Hi, Sankit. Latesh Shetty here from CDSL. With reference to the current half-yearly closing, we have signed up two new customers. LIC integration is expected to go live in November. We expect some numbers to increase from there. As far as the numbers of insurance account opening is concerned, we are actually reflecting the industry numbers. Although we do not count the premium numbers, if you look at the number of policies issued from the IRDA results, there has been actually a decrease in the number of policies opened. Still, we have shown a 30% growth vis-à-vis last year. We expect that the online portal opening, which we have done, should contribute more. Just to give you a perspective, there are three channels from where the business comes. One is from the insurance companies. Second is directly from the customers. The third channel is the broking channel. The first channel was always there. The insurance companies business has been our basic revenue mode. We have opened up the online portal six months back, and we have seen steady trickling of numbers from there. The third broking channel is what we are working on, and we expect that the future growth should come from the broking channel. I hope it answers your question. Yes, sir. Last and follow-up to this. In insurance, in your view, large part of the growth will come from life rather than from general insurance companies. Is it a fair assumption to make? Sorry, we do not give breakup. Please come again with your question. What is the question? No, no. I was not asking for the breakup, sir. I'm just seeing from an insurance repository business point of view for the industry as a whole, that the main source of revenue will be life rather than general insurance business. Is it a fair assumption to make? No, I don't think so. That will have to be seen as to how the industry evolves. It depends on what is that regulatory formulation also which happens. Again, drawing the same analogy that on the road, we prepare roads. Now, whether there are scooters or trucks or cars, that is merely irrespective. The intent is to create value propositions for all the vehicles which are coming on that. Understood, sir. Yeah. Thanks. That's it from my side. Thank you. Thank you. Next question comes from the line of Rohan Nagpal with Helios Capital. Please go ahead. Thanks for taking my question. If I just look at the revenue booked under online data charges, traditionally, this has tracked the number of new demat accounts. This quarter, the number of new demat accounts has grown about 14% but the revenue booked under this line item is up about 30%. Could you just provide some color on exactly what's going on and what has changed qualitatively under the hood? See, when the accounts are opened, that shows the number of new people coming into the fold. There could be multiple transactions which happen, which includes pledge transactions. It includes your actual buy and sell transactions, and each one is recorded as a revenue. It depends on the market activity in that quarter, which determines what the total income from that market-driven activity constitutes. There may not be a one-to-one correlation between account openings and the amount of income which is earned out there. Hence, you have to take it in that perspective. Just a follow-up. Wouldn't the pledge income and the transaction-related income be booked under different lines within the revenue accounts rather than online data charges? Transaction charge and pledge income is depository's income and not KRA's income. It is not recorded under the KRA income account. Right. So my question was, the online data charge revenue, the revenue booked under online data charges is up about 30% quarter on quarter. But the number of. Yeah. That's what, similarly, like it's in the core depository CDSL and CVL also, it constitutes various other activities, like fetch and etc. I need to give you more details, but the intent is that there may not be a one-to-one correlation between account openings and these online charges or account openings and transactions. That's the point I'm trying to make. You also have to understand that it's only not demat accounts which are getting opened. There are mutual fund investors also coming in. Effectively, the KYC, what you see, the numbers what you see is getting divided amongst demat accounts and mutual funds. That is investors investing only in mutual funds. I hope that answers your question. Okay. So is it more fetches that are being generated by first-time investors within AMC that has sort of driven the revenue this quarter? We do not actually see, if I mean, get into those things. We usually track more of the overall fetches which are happening, okay, compared to whether the new investors are fetching. What we normally see as a trend is the new investors which come in, the fetches take at least about six months to one year to actually start coming. Okay. Understood. This quarter, we've seen an increase in the number of fetches on the KYC records. Is that a fair understanding? Yeah. Quarter on quarter, yes. Okay. Thank you. Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Prayesh Jain with Motilal Oswal Financial Services Limited. Please go ahead. Yeah. Hi. So just one question on the transaction charge. Some brokers on their website show per transaction while some show per ISIN debit. So can you clarify if whether, if there is one ISIN debit at the end of the day, the customer is charged only once or there can be multiple charges also possible during the day? See, again, you need to understand that depository charges are depository participants. What the DP stroke broker, now, broker is a different activity, depository participant is a different activity. That will depend upon the arrangement or the agreement which is between the ultimate customer and the intermediary. Both these are put out on the public domain. The market at large knows what the depository is charging, what the brokers are charging. It is up to each customer or beneficial owner to choose which customer. There could be various options. DPA may charge different from DPB or DPC or DPD. It is up to the investor to choose which DP it would like to choose for its own sale. As a depository, you get charged only once when the ISIN gets debited at the end of the day? Not at the end of the day. Each transaction. Each settlement. Each settlement. Okay. Got that. So effectively, every time there is a debit, there is a charge into the investor account. Okay. Got that. Got that. That was the only question. Thank you. Thank you. Ladies and gentlemen, as there are no further questions, we have reached the end of the question and answer session. I would now like to hand the conference over to Nehal Vora for closing comments. I would just like to thank all the questions which have been asked. I wish you all a safe and secure journey. Thank you once again, and see you at the end of the third quarter for the investors. Thank you. Thank you. On behalf of HDFC Securities, that concludes this conference. Thank you for joining us. You may now disconnect your lines.