Nuvama Institutional Equities has revised Central Depository Services (India) Ltd (CDSL) shares rating to 'Hold' from 'Buy' earlier, citing weaker sequential performance and margin pressure.

"Revenue grew 17.1 YoY/-13.6 per cent QoQ to Rs 260 crore (-0.5 per cent versus estimate). The QoQ (sequential) decline was largely due to weaker IPO/corporate action charges (-71.2 per cent QoQ) and transaction charges (-1.7 per cent QoQ)," the domestic brokerage stated.

The brokerage highlighted that higher technology spends and lower other income weighed on profitability during the quarter.

"Higher than estimated technology cost was offset by lower employee cost, taking total expense higher by 2.2 per cent QoQ (in line with our estimate), resulting in an EBIT margin of 37.6 per cent (-473bp YoY/-965bp QoQ) and EBIT of Rs 98.9 crore (-4.0 YoY/-31.3 per cent QoQ). Lower other income dragged APAT to Rs 80.2 crore (-20.0 YoY/-39.8 per cent QoQ)," Nuvama added.

Nuvama has also cut its earnings estimates for the coming years, leading to a sharp reduction in target price.

"Our FY27E/28E APAT is reduced by 9.6/11.1 per cent yielding a TP (target price) of Rs 1,250 (earlier Rs 1,660) at FY28E EV/NOPLAT of 45x," the brokerage also said.

"Rating revised to 'HOLD'. At CMP, stock trades at FY27E/28E EV/NOPLAT of 51.5x/42.7x," it further stated.

Meanwhile, CDSL shares were last seen trading 1.10 per cent lower at Rs 1,224.70 in Tuesday's trade. At this level, the counter has declined 20.11 per cent over the last six months.