The IPO-bound National Stock Exchange (NSE) has announced a contrasting financial performance for the first quarter of the 2025-26 fiscal year. For the quarter ending in June 2025, the world’s largest derivatives exchange saw its net profit increase despite a fall in revenue, highlighting a mixed operational landscape.
Key Financial Highlights for Q1 FY26
The exchange’s consolidated net profit grew by 14% year-on-year (YoY) to reach ₹2,924 crore, up from ₹2,567 crore in the same period last year.
However, revenue from operations experienced an 11% YoY decline, settling at ₹4,032 crore compared to ₹4,510 crore a year ago. This dip is attributed to softer trading activities and compression in fees.
The Derivatives Paradox
A significant factor in the revenue decline was a sharp 37% drop in transaction charges from the Futures & Options (F&O) segment, which fell to ₹1,729 crore from ₹2,744 crore. This occurred even as the average daily turnover in the F&O segment surged by 39% YoY to ₹360 lakh crore. According to Harshal Dasani, Business Head at INVasset PMS, this presents a paradox of high trading volumes but lower revenue realization.
Despite the revenue contraction, the NSE demonstrated strong operational efficiency.
- Operating EBITDA: Stood at ₹3,130 crore, a slight increase from ₹3,106 crore in the prior year.
- EBITDA Margins: Showed significant improvement, rising to 78% from 69% in the same quarter last year.
During the quarter, the NSE’s total contribution to the government exchequer amounted to ₹14,331 crore, which includes Securities Transaction Tax (STT), Goods and Services Tax (GST), income tax, stamp duty, and SEBI fees.
Market Perspective and Future Outlook
In the unlisted market, NSE’s shares have seen a recent downturn, falling 6% over the past month to ₹2,175 per share. However, the stock maintains a 14% gain over the last six months.
Analysts note that the company’s ability to boost profitability despite lower revenue signals strong cost control. However, Mr. Dasani cautions that NSE’s heavy reliance on the derivatives segment makes future earnings susceptible to regulatory changes, especially with SEBI’s ongoing scrutiny of F&O volumes.
He added, “As the IPO approaches, this result will likely be viewed favourably by long-term investors who value its scale, duopoly status, and high cash flows, but caution around the sustainability of F&O economics will remain.”
