Cup & Handle Pattern and Inverse Head & Shoulder Breakout - CDSL

Technical Analysis:

• Current Price: ₹1408.8 (Note: Live prices can fluctuate. As of the market close on May 16, 2025, CDSL closed around ₹1417.00 on the NSE).
  
• Target: Your target of ₹1800 suggests a significant potential upside.
  
• Cup & Handle Pattern Breakout: This bullish continuation pattern, if confirmed, indicates potential for a strong upward move.
  
• Inverse Head & Shoulder Breakout: This is a bullish reversal pattern, suggesting the end of a downtrend and the start of an uptrend. The confluence of these two bullish patterns adds strength to the potential upside.
  
• Time Frame: A 1 to 3-month timeframe is reasonable for these patterns to play out, assuming the breakouts are sustained.
  

Confirming the Breakouts:

Volume: It's crucial to assess if both breakouts were accompanied by a noticeable increase in trading volume. Strong volume adds conviction to the validity of the breakouts.
Sustainability: Monitor if the price holds above the breakout levels in the coming trading sessions.

Potential Upside:

Target (₹1800): Represents a potential upside of approximately 27.8% from the ₹1408.8 level (or around 26.9% from the ₹1417.00 closing price).

Quarterly and Yearly Results & EPS Comparison:

• Latest Quarter Result (March 2025): CDSL reported a consolidated net profit of ₹100.31 Crore, a decrease of -22.4% compared to the same quarter last year (March 2024). The total income for the quarter was ₹255.78 Crore, a decrease of -4.34% YoY.
  
• Yearly Result (FY2025): For the full fiscal year ending March 2025, CDSL's total revenue stood at ₹984.58 Crore, a growth of 32.53% compared to the previous fiscal year (FY2024). The profit after tax for FY25 was ₹462.10 Crore, a growth of 27.19% YoY.
  
• EPS Comparison:
  
• Quarterly EPS (March 2025): ₹3.86, compared to ₹4.66 in March 2024.
  
• Yearly EPS (FY2025): ₹22.11, compared to ₹34.77 in FY2024. The yearly EPS shows a decrease despite revenue and profit growth, which could be due to an increase in the number of outstanding shares or other accounting adjustments.
  

P/E Comparison:

• Based on the closing price of ₹1417.00 and the TTM (Trailing Twelve Months) EPS of approximately ₹25.20, the current P/E ratio is around 56.23.
  
• Comparing this to peers like Computer Age Management Services (CAMS) with a P/E of around 43.73 and KFin Technologies with a P/E of around 55.97 (as of recent data), CDSL's P/E is in a similar range or slightly higher than some peers.
  

Corporate Action:

• Dividend: CDSL has declared a final dividend of ₹12.50 per share for the fiscal year ending March 31, 2025, subject to shareholder approval. The ex-dividend date and payment date will be announced later.
  
• In the quarter ending March 2024, CDSL declared a dividend of ₹3 per share.
  

Key Factors to Monitor:

• Breakout Confirmation: Watch for sustained price action above the breakout levels with good volume for both the Cup & Handle and Inverse Head & Shoulder patterns.
  
• Earnings Impact: Analyze how the market reacts to the recent quarterly and yearly results. While the yearly revenue and profit showed growth, the decrease in quarterly profit and yearly EPS might be a point of concern for some investors.
  
• Market Sentiment: Overall market sentiment and the performance of the financial services sector will influence CDSL's price.
  
• Dividend Announcement: Keep an eye on the record date and payment date for the declared dividend.