The National Stock Exchange of India (NSE), the largest stock exchange in the country, reported a significant decline in profitability as its earnings were adversely impacted by a one-off regulatory provision.
NSE’s consolidated net profit dropped 33% YoY to Rs. 2,098 crore compared to Rs. 3,137 crore in the same quarter last year.
The decline was primarily driven by a Rs. 1,297 crore provision, including interest, related to settlement applications filed with SEBI concerning the Colocation and Dark Fibre matters.
Excluding this one-time provision, the exchange’s adjusted profit after tax (PAT) stood at Rs. 3,395 crore, marking a 16% sequential increase. NSE said it has filed the settlement applications under SEBI’s 2018 Settlement Regulations and is awaiting a response.
During the quarter, revenue from operations declined 18% YoY to Rs. 3,677 crore, down from Rs. 4,510 crore in Q2FY25. The company’s total income also slipped to Rs. 4,160 crore, compared to Rs. 5,023 crore a year ago.
At the operating level, EBITDA dropped 56% to Rs. 1,484 crore, with margins dropping sharply to 40%, from 74% a year earlier. However, excluding the settlement provision, NSE’s operating EBITDA stood at Rs. 2,782 crore, implying a robust margin of 76%.
The exchange’s earnings per share (EPS) fell to Rs. 8.48, down from Rs. 12.6 in Q2FY25 and Rs. 11.81 in Q1FY26. Adjusted for the one-time SEBI provision, EPS would have been Rs. 13.72, reflecting an improved operational performance.
The NSE announced a slowdown in trading across the major segments. The average daily trading volume (ADTV) in the cash market was Rs. 95,705 crore, down 12% QoQ. Equity futures were down 16% to Rs. 1,41,042 crore, while equity options were down 16% to Rs. 46,442 crore.
Revenue from transaction charges, NSE’s largest income contributor, also fell 12% to Rs. 2,785 crore due to muted activity in both cash and derivatives markets.
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For the first half of FY26, NSE reported a consolidated net profit of Rs. 5,022 crore, or Rs. 6,320 crore excluding a provision related to SEBI. Total income for H1 was Rs. 8,959 crore compared to Rs. 9,974 crore for the same period last year.
For H1FY26, the NSE contributed Rs. 28,308 crore to the exchequer through taxes, duties, and regulatory fees, thereby reaffirming its important fiscal role.
While the quarterly profit was introduced with a one-time provision, analysts say that NSE's core operational performance remains strong due to healthy transaction volumes and strong margins.