The National Stock Exchange of India (NSE) released its financial disclosures for the July-September 2026 quarter, highlighting a consolidated profit after tax of INR 2,578 crore. According to the exchange’s investor presentation dated 3 November 2026, this represents a 23% increase compared to the same period in the previous fiscal year. However, a detailed breakdown of the revenue streams and operating expenses reveals that headline growth figures are significantly shaped by previous-year base effects and heavy reliance on specific derivative products.
During the quarter under review, NSE generated revenue from operations amounting to INR 4,067 crore, marking an 11% expansion on a year-on-year basis but an 11% contraction compared to the preceding April-June quarter. Total income for Q2 FY27 stood at INR 4,554 crore, reflecting a 9% annual rise alongside a 13% quarter-on-quarter drop. For the first half of FY 2027, the exchange registered a cumulative profit after tax of INR 5,698 crore on operational revenues of INR 8,627 crore.
Core Financial Performance and Normalised Trends
A rigorous examination of the financial statements indicates that headline growth rates require careful contextualisation. Operating EBITDA surged by 107% year-on-year to INR 3,079 crore in Q2 FY27, primarily because the comparative quarter in FY26 absorbed a one-time SEBI settlement fee of INR 1,297 crore. Conversely, the preceding quarter (Q1 FY27) recorded higher trading activity, resulting in a 17% quarter-on-quarter decline in profit after tax.
To establish an accurate underlying trajectory, normalised figures strip out extraordinary items from both comparative periods. On this adjusted basis, pre-tax profit from continuing operations advanced by 9% to INR 3,425 crore, while normalised operating EBITDA grew 11%. The normalised EBITDA margin remained steady at an impressive 76%. For the first half of the fiscal year, normalised pre-tax profit advanced by 10% to reach INR 7,525 crore, confirming stable mid-teens operational expansion rather than runaway annual spikes.
Revenue Concentration in Weekly Derivatives
Transaction charges remain the primary engine of NSE’s financial model, contributing INR 3,035 crore or roughly 75% of operational revenue during the quarter. Within this segment, index options dominate transactional income flows. Weekly Nifty options alone generated INR 1,699 crore, accounting for 38% of the exchange’s total income. This concentration exposes overall earnings to fluctuations in weekly trading volumes, as demonstrated by the quarter-on-quarter slide from INR 2,170 crore recorded in Q1 FY27.
Other operational segments displayed mixed momentum during the period. The cash market segment emerged as a notable bright spot, with average daily turnover reaching INR 1,18,377 crore—up 24% year-on-year—translating into transaction charge revenue of INR 474 crore. Meanwhile, stock options contributed INR 332 crore, futures and international exchange products added INR 328 crore, and other index options accounted for INR 185 crore.
Expansion in Emerging Business Verticals
While derivatives activity dictates near-term profitability, NSE continues to scale its ancillary service lines. Listing services brought in INR 150 crore, representing a 70% annual increase supported by 70 mainboard initial public offerings handled during the first half of the year. Data feed and terminal services generated INR 165 crore (up 43%), while clearing and settlement operations contributed INR 73 crore (up 32%).
In the retail investment ecosystem, the mutual fund platform recorded 672 lakh orders during the quarter—a 155% surge from the previous year—expanding NSE’s order market share to 22%, though direct transactional revenue remained modest at INR 13 crore. Within commodities and debt markets, electricity futures maintained a dominant 64% market share, and average daily tri-party repo values expanded significantly to INR 6,657 crore in H1 FY27.
Expense Dynamics and Technology Spending
Total quarterly expenses dropped sharply by 51% to INR 1,161 crore strictly due to the absence of the prior-year regulatory settlement charge. However, underlying operational costs continued an upward trajectory. Technology expenses climbed 22% to INR 386 crore, and employee benefit expenses rose 18% to INR 220 crore. These overhead categories expanded faster than top-line operational revenue, pointing towards necessary structural investments in digital infrastructure, cyber security, and human capital to manage record daily transaction volumes and an active investor base exceeding 13.7 crore unique registrations.
Market and Financial Analysis
Financial and Valuation Overview
The financial disclosures from NSE demonstrate robust operational scale paired with exceptional profit conversion. The persistence of a 76% normalised EBITDA margin underscores the high-operating-leverage nature of exchange infrastructure. However, financial analysts must account for cyclicality inherent in derivatives-heavy revenue models. Because a single product category—weekly Nifty options—accounts for 38% of total income, any regulatory tightening or shift in retail trading participation directly impacts quarterly earnings velocity.
| Financial Metric | Q2 FY26 | Q1 FY27 | Q2 FY27 | YoY Change (%) | Analysis |
|---|---|---|---|---|---|
| Revenue from Operations | INR 3,677 cr | INR 4,560 cr | INR 4,067 cr | 11% | Steady year-on-year top-line expansion, though cooling sequentially from Q1. |
| Total Income | INR 4,160 cr | INR 5,252 cr | INR 4,554 cr | 9% | Reflects stable investment income alongside core transaction fees. |
| Operating EBITDA | INR 1,484 cr | INR 3,594 cr | INR 3,079 cr | 107% | Distorted by base effect from last year’s SEBI settlement penalty. |
| Profit After Tax | INR 2,098 cr | INR 3,120 cr | INR 2,578 cr | 23% | Headline profit growth moderated by lower sequential options turnover. |
| EPS (Unannualised) | INR 8.48 | INR 12.61 | INR 10.41 | 22.76% | Reflects per-share earnings alignment with quarterly PAT variations. |
Business and Competitive Impact
NSE maintains a near-monopolistic grip on India’s equity derivatives segment and commands a 92% share of the cash market. This dominant market positioning creates formidable entry barriers for rival institutions. Nevertheless, the heavy dependence on transactional velocity introduces earnings volatility. While emerging verticals such as data services, mutual fund routing, and commodities exhibit triple-digit volume growth percentages, their absolute contribution to the top line remains minor, meaning options trading will dictate near-term financial outcomes.
Key Takeaways
- NSE reported a consolidated profit after tax of INR 2,578 crore for Q2 FY27, representing a 23% increase year-on-year.
- Normalised pre-tax profit grew by 9%, indicating that underlying operational growth is steadier than headline figures suggest.
- Weekly Nifty options remain the primary revenue driver, contributing INR 1,699 crore or 38% of total income.
- Operating expenses reflect rising technology investments, with tech spending up 22% to INR 386 crore and employee costs up 18% to INR 220 crore.
- The exchange maintained a stable normalised EBITDA margin of 76%, underscoring strong operational efficiency across core market operations.
Frequently Asked Questions
NSE reported a consolidated profit after tax of INR 2,578 crore for the July-September 2026 quarter.
Weekly Nifty options generated INR 1,699 crore, accounting for 38% of NSE's total income during Q2 FY27.
Revenue from operations stood at INR 4,067 crore, reflecting an 11% increase compared to the same period last year.
NSE maintained a normalised EBITDA margin of 76% in Q2 FY27, unchanged from the previous year.
Technology expenses rose 22% to INR 386 crore, and employee costs increased 18% to INR 220 crore.
NSE reported a 93% market share in the cash market for the first half of FY 2027 (92% specifically in Q2).
NSE saw 70 mainboard IPOs during the first half of FY 2027, compared to 54 in the corresponding period a year earlier.
