The National Stock Exchange of India (NSE), the country’s largest financial market infrastructure institution, reported a soft start to FY26, with its consolidated net profit dipping in both Q2 and H1, primarily due to a one-time regulatory provision. However, NSE Q2 FY26 adjusted results highlight a resilient business model with stable margins and industry-leading profitability.
NSE Q2 FY26 Results: Financial Snapshot
| Particulars | Q2 FY25 | Q1 FY26 | Q2 FY26 | YoY Growth | QoQ Growth |
|---|---|---|---|---|---|
| Total Income | 5,023 | 4,798 | 4,160 | ▼17% | ▼13% |
| Revenue from Operations | 4,510 | 4,032 | 3,677 | ▼18% | ▼9% |
| Total Expenses (Reported) | 1,303 | 1,053 | 2,354 | ▲81% | ▲124% |
| Operating EBITDA (Reported) | 3,344 | 3,130 | 1,484 | ▼56% | ▼53% |
| Operating EBITDA (Excl. Provision) | 3,344 | 3,130 | 2,782 | ▼17% | ▼11% |
| Profit After Tax (Reported) | 3,137 | 2,924 | 2,098 | ▼33% | ▼28% |
| Profit After Tax (Excl. Provision) | 3,137 | 2,924 | 3,396 | ▲8% | ▲16% |
| PAT Margin (Reported) | 57% | 59% | 39% | ↓ | ↓ |
| PAT Margin (Excl. Provision) | 57% | 59% | 63% | ↑ | ↑ |
Note: NSE booked an INR 1,297 crore provision (including interest) toward the SEBI Settlement Regulations, 2018 applications for the Colocation and Dark Fibre matters, pending SEBI’s response. This conservative provisioning distorted quarterly profit comparisons.
NSE H1 FY26 Results: Performance Overview
| Particulars | H1 FY25 | H1 FY26 | YoY Growth |
|---|---|---|---|
| Total Income | 9,974 | 8,959 | ▼10% |
| Revenue from Operations | 9,020 | 7,709 | ▼15% |
| Total Expenses (Reported) | 2,833 | 3,406 | ▲20% |
| Operating EBITDA (Reported) | 6,450 | 4,614 | ▼28% |
| Operating EBITDA (Excl. Provision) | 6,450 | 5,912 | ▼8% |
| Profit After Tax (Reported) | 5,704 | 5,022 | ▼12% |
| Profit After Tax (Excl. Provision) | 5,704 | 6,320 | ▲11% |
| EBITDA Margin (Excl. Provision) | 72% | 77% | ▲5 pp |
| PAT Margin (Excl. Provision) | 55% | 61% | ▲6 pp |
Despite the 10% YoY decline in total income, adjusted PAT grew 11% — a sign that NSE’s core operating profitability remains intact. The margin expansion was supported by cost optimization and steady income from non-trading businesses.
NSE H1 FY26 Revenue Composition
| Revenue Source | H1 FY25 | H1 FY26 | YoY Change |
|---|---|---|---|
| Transaction Charges | 7,239 | 5,935 | ▼18% |
| Listing Services | 147 | 166 | ▲13% |
| Data Centre Charges | 555 | 617 | ▲11% |
| Data Feed & Terminal Services | 204 | 222 | ▲9% |
| Index Licensing & Data Subscription | 56 | 75 | ▲35% |
| Clearing & Settlement | 182 | 104 | ▼43% |
| Other Operating Income | 110 | 131 | ▲19% |
| Total Revenue from Operations | 9,020 | 7,709 | ▼15% |
Insight: While transaction fees declined due to lower average daily volumes, NSE’s data, index licensing, and co-location revenues rose sharply — demonstrating the success of its diversification strategy.
Market Position & Ecosystem Metrics
- Global Standing:
- #1 globally in derivatives contracts (FIA, CY2024)
- #3 globally in equity trades (WFE, H1 FY26)
- Market Share:
- Cash Market – 93.8%
- Equity Derivatives – 99.8%
- Currency Derivatives – 100%
- Capital Formation (H1 FY26):
- Equity: INR 9.7 lakh crore
- Debt: INR 7.7 lakh crore
- Total Mobilisation: INR 23.45 lakh crore
- Investor Reach:
- 12 crore unique investors
- 24 crore total investor accounts
- 99.9% PIN code coverage
- Investor Protection Corpus: INR 2,682 crore
- Contribution to Exchequer (H1 FY26): INR 28,308 crore
NSE H1 FY26: Profitability & Return Metrics
| Key Metric | H1 FY25 | H1 FY26 | Change |
|---|---|---|---|
| EBITDA Margin (Excl. Provision) | 72 | 77 | +5 pp |
| PAT Margin (Excl. Provision) | 55 | 61 | +6 pp |
| Return on Equity | 45 | 33 | –12 pp |
| EPS – Reported | 23.05 | 20.29 | ▼12% |
| EPS – Excl. Provision | 23.05 | 25.53 | ▲11% |
Insight: Normalised profitability remains world-class, with NSE sustaining 60%+ PAT margins, far above global exchange peers.
Verdict
The second quarter’s steep profit fall is largely optical, resulting from the one-time SEBI provision. Excluding this, NSE continues to deliver exceptional profitability and cash generation.
Analysts note that this provisioning is a de-risking step, aimed at resolving long-pending regulatory matters, setting up NSE for a cleaner FY27.
NSE’s normalised results show it is still among the world’s most profitable exchanges. The temporary provisioning hit doesn’t dent its long-term earnings power or market dominance.
Outlook: Foundation for Long-Term Growth
- Volume Recovery: Market participation expected to rebound in H2 FY26 amid IPO pipeline and improving liquidity.
- Diversification: Growth in data licensing, analytics, and index-based products continues to expand recurring income.
- Technology & Infrastructure: Sustained capex on risk management and automation expected to maintain NSE’s operational edge.
- Regulatory Clarity: SEBI’s decision on settlement applications could unlock earnings normalisation.
Bottom Line
While the NSE Q2 & H1 FY26 figures reflect a dip in reported earnings, the underlying picture is one of operational resilience. With adjusted profits up 11% YoY, 77% operating margins, and near-monopoly market share, NSE remains India’s capital market backbone and a model of financial efficiency globally.
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