The shares of National Securities Depository (NSDL) dropped nearly 5 percent on August 13, a day after the company released its results for the first quarter of the financial year 2026. This marks the biggest drop from previous closing price seen by the stock since its market debut.

NSDL had released its results in the post market hours of August 12. It reported a net profit of Rs 89.63 crore for the first quarter of the financial year 2026. This marks a rise of more than 15 percent on-year from the Rs 77.82 crore reported by the newly-listed company for the same quarter last year. While the firm saw a rise in its bottom line, its expenses dropped more than 14 percent on-year to Rs 228 crore in April-June quarter of the ongoing financial year.

The firm's revenue from operations however dropped 7.5 percent on-year to Rs 312 crore in Q1 FY26. Its revenue from operations stood at Rs 337 crore in Q1 FY25. Sequentially, it fell more than 14 percent from the Rs 364 crore revenue reported in Q4 FY25.

NSDL's earnings per share (EPS) meanwhile improved to Rs 4.48 apiece in the quarter under review.

NSDL shares hit an intraday low of Rs 1,226 apiece in the early trading hours.

NSDL shares had made a decent stock market debut on August 6, listing at 10 percent premium to IPO price at Rs 880 apiece on BSE. Analysts had advised investors to consider holding the stock for the long term, given NSDL’s strong fundamentals and leadership in the depository segment. The Rs 4,000-crore IPO had turned out to be a multi-bagger for some of India’s top financial institutions.

The shares of the company rallied as much as 62 percent from its listing price, and over 78 percent from its IPO price during the sharp rally, to hit an all-time high level in just four sessions. Analysts advised investors to book some profits at these elevated levels for the short term, while highlighting that the stock holds value in the long term.

NSDL’s current P/E ratio currently stands at around 78, significantly higher than the 49 P/E ratio recorded during its debut. Its peer CDSL currently has a P/E ratio of around 65.

The valuation may appear to be stretched when compared to that of CDSL, investors are clearly willing to pay a premium for NSDL’s scale, technology backbone, and long-standing trust within the ecosystem, said Bhavik Joshi, Business Head at INVasset PMS.

“That said, prospective investors should be mindful of certain structural risks — dependence on transaction volumes, evolving investor participation patterns, and the ever-present cybersecurity and regulatory compliance requirements. In the near term, valuations may moderate if market activity slows, offering potential entry points for those who missed the IPO,” Joshi added.

Nitin Jain, Senior Research Analyst at Bonanza, said it is recommended for short-term and listing-gain-focused investors to book some profits. "The near-term upside may be capped after such a sharp move, and markets tend to see consolidation post a robust debut. If you are a long-term investor willing to ride out near-term volatility, NSDL remains a high-quality stock supported by rising demat penetration," he added.

Market expert Ambareesh Baliga told CNBC-TV18 that it will be ideal for IPO investors to book profits at current levels and make a shift back to CDSL. "At the IPO price, NSDL was definitely cheaper compared to CSDL but now it is expensive after the recent run-up. I think along with long investors shifting from CDSL to NSDL post listing, we have seen huge number of momentum trader getting in, which has pushed the stock higher," he said.

Sunny Agarwal of SBI Securities also told the news channel that investors focused on short-term gains should book profits after the record rally, while long term investors should consider accumulating more shares using any dip.