BSE Ltd (BSE) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day and welcome to BSE Limited Q2 FY27 earnings conference call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing "*" then "0" on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anand Sethuraman. Thank you and over to you, sir.
Anand Sethuraman (BSE Ltd): Thank you so much, Yusuf. Good evening, everyone. Welcome to BSE's Q2 FY 2027 earnings call. I'm Anand Sethuraman and it's my privilege to introduce you to the members of the BSE's leadership team today, starting with Mr. Sundararaman Ramamurthy, Managing Director and CEO; Mr. Saurabh Shukla and Mr. Gopalan S. Raghavan, Executive Directors; Mr. Deepak Goel, Chief Financial Officer; Mr. Sunil Ramrakhiani, Chief Business Officer; Ms. Geeta Gangadharan, Chief Regulatory Officer; Mr. Vinod Darda, Chief Technology Officer; Mr. Rutvik Gundigara, Chief of Product, Policy and Strategy; Mr. Ketan Jantre, Head of Trading Operations; Ms. Radha Kirthivasan, Head of Issuer Relations and Corporate Sales; Mr. Ramesh Gurram, Chief Information Security Officer; Mr. Abhishek Jha, Joint Chief Information Security Officer; Mr. Sanjay Sanjay Jain, Chief Risk Officer; Mr. Vishal Bhat, Company Secretary; Mr. Ashutosh Singh, Managing Director and CEO, BSE Index Services; Ms. Vaishali Babu, Managing Director and CEO of BSE Clearing Corporation. We also have representatives from our Finance, Business, Investor Relations team here. Please note that our latest financial results and investor presentation are available on the BSE's website. Today, we'll start with remarks from our MD and CEO on our performance, followed by a Q&A session.
Anand Sethuraman (BSE Ltd): All participant lines will be muted during for the duration of the call and there will be an opportunity for you to ask questions after the management remarks. Some of the remarks made today in this call may be forward-looking in nature and are subject to risks and uncertainties. The company does not undertake to update these forward-looking statements publicly. With that, I will now invite BSE MD & CEO to share his views. Thank you, and over to you, sir.
Sundararaman Ramamurthy (BSE Ltd): Thank you. Good evening, everyone, and thank you for joining us today. Let me begin by welcoming our shareholders, analysts, investors, members, and all other stakeholders on this call. Let me first talk a little bit about the macroeconomic environment. Indian capital markets continue to demonstrate structural resilience despite a volatile global environment marked by intensifying geopolitical tensions, fluctuating crude oil prices, and prolonged tightening of global financial conditions. Against this challenging backdrop, India's core macroeconomic fundamentals remain exceptionally robust. Real GDP expanded by 7.8% in Q1 of FY '27, fundamentally driven by sustained momentum across private consumption, capital investment, manufacturing output and a resurgent services sector. Importantly, institutional market dynamics have evolved to provide unparalleled systemic stability. While foreign institutional investors adopted a cautious stance amid macro uncertainties, resulting in a net outflow of approximately 35,861 crores from Indian equities in September 2026, domestic institutional investors absorbed this liquidity pressure deploying approximately 76,030 crores during the same period. This robust influx of domestic capital serves as a critical countercyclical buffer, deepening market liquidity and validating long-term confidence in the Indian growth narrative. Indian capital markets are now increasingly anchored by domestic long-term financial savings. Evidencing this depth, the mutual fund industry's assets under management reached a historic milestone of approximately ₹82.64 lakh crores as of September 2026, marking an impressive 12.5% expansion during the first half of FY '27. The compounding participation of both household and institutional investors underscores the self-sustaining nature, maturation, and expanding capacity of the domestic financial ecosystem. Against this backdrop, I am pleased to share that BSE continued to deliver strong financial performance during the first half of FY
Sundararaman Ramamurthy (BSE Ltd): 27. Consolidated revenues for H1 FY 27 stood at ₹3,257 crore compared with 2,184 crore in the corresponding period last year, representing a robust year-on-year growth of 49%. I will now share some of the key financial numbers on a consolidated basis for the half year ended September 30, 2026 as compared to the previous year. Operational revenues have grown by 48% to ₹2,999 crore from ₹2,026 crores. Transaction charges, comprising revenues from the equity cash, equity derivatives, mutual fund, and clearing corporation segments, registered a substantial increase of 60%, rising to ₹2,456 crore from ₹1,531 crore, reflecting robust growth in core trading and settlement related activities. Other operating income, which includes enhanced data dissemination fees, colocation, and order throttle charges, index services, etc. has increased by 23% to ₹200 crore from 163 crore. Operating expenses increased by 36% to ₹980 crore from ₹721 crore. It may be noted that 50% of the total operating expenses are attributable to regulatory fees and clearing and settlement expenses, all of which is directly correlated to increasing transaction volumes. The operating EBITDA, including contribution to Core SGF, has increased by 55% to ₹2,019 crore as compared to ₹1,306 crore, with margins expanding to 67% from 64%. The net profit attributable to the shareholders of the company has demonstrated a significant increase to reach ₹1,680 crore from ₹1,095 crore, representing a robust year-on-year growth of 53%, with a net profit margin of 52%. The continued growth of BSE's investor base remains an encouraging indicator of the growing reach of India's capital markets. Investor accounts registered on BSE have now reached 26.8 crore, 3.9 crore new accounts added over the past year. Importantly, this participation is becoming increasingly broad-based, with 11 states now having more than 1 crore investor reach, reflecting the widening geographic reach of the capital market across the country. Alongside this growth, investor education and awareness continued to remain an important priority for BSE. We conducted 2,328 investor awareness
Sundararaman Ramamurthy (BSE Ltd): programs during H1 FY '27, reaching over 1.2 lakh participants. Looking ahead, BSE remains deeply committed to expanding investor awareness and advancing financial literacy. We view this educational mandate as a key pillar for promoting informed investment decision, safeguarding investor interests, and securing the long-term sustainable growth of India's financial ecosystem. The consistent improvement across both our revenue streams and operating margins is direct evidence of our disciplined strategic execution. By expanding market participation and driving key platform efficiencies, we are continuously enhancing the depth of India's financial ecosystem while reinforcing BSE's structural position at the center of India's capital market expansion. Let me now discuss a few key trends that shaped our business this quarter. In primary markets, we have seen very strong momentum during the first half of FY '27, with a record 71 main board IPOs, raising over Rs. 84,400 crores, sorry, 84,000 crores, making it the strongest on record for Indian capital markets. In September alone, BSE witnessed a 32, a record 32 main board IPO listings, collectively raising Rs. 40,354 crores. A strong pipeline of issuances, coupled with healthy investor participation, demonstrates the growing confidence of companies in accessing the public markets for capital formation. We remain optimistic about the opportunities ahead and believe BSE is well positioned to participate in India's growing equity capital markets. Alongside the strong momentum in the main board IPO market, the SME segment also continued to demonstrate healthy growth with strong issuer and investor participation. BSE SME crossed a significant milestone of 800 listed companies in October 2026, up from 600 a year earlier. Notably, the latest 200 listings have raised Rs. 8,387 crores, representing nearly 45% of the cumulative capital raised on the platform, underscoring the growing role of SMEs in India's economic growth and capital market development. Overall, in H1 FY '27, issuers raised over Rs. 13.9 lakh crores through BSE's fundraising platforms across equity, debt, bonds, commercial papers, REITs, and InvITs, reaffirming the trust placed in BSE's market infrastructure. Looking ahead, we remain positive on the outlook for India's primary markets. The main board IPO pipeline remains strong with over 150 companies seeking to access the capital markets and targeting
Sundararaman Ramamurthy (BSE Ltd): fundraising of approximately ₹1.5 lakh crores. Moving on to our trading segment, we continue to witness strong momentum across both our cash and derivatives market, supported by growing client participation and product innovation. In the equity cash segment, BSE continued its strong momentum, recording its highest ever quarterly average daily turnover of ₹10,494 crores in Q2 FY '27, reflecting sustained market participation and strengthening liquidity on the exchange. In our index option segment, Q2 FY '27, ADTV by premium volume stood at ₹22,531 crores. While this represents our first sequential quarterly contraction, decreasing from ₹29,615 crores in Q1, due to compressed market volatility and certain temporary structural shifts in participation, however, we have seen a decisive recovery in September 2026 and a record-breaking October 2026, which registered our highest ever monthly index options premium ADTV of ₹35,481 crores. BSE also achieved its highest ever single-day expiry premium turnover of ₹85,356 crores on October 22, 2026, reinforcing that deep systemic liquidity, resilience, and expanding market share of our derivatives platform. Crucially, our focus on broadening the derivatives ecosystem continues to progress well. The BSE Focused IT index derivatives, introduced earlier this year, are gradually establishing themselves on our platform with participation developing across successive expiries. To further strengthen our global product offering, BSE has entered a strategic collaboration with the MSCI, bringing together BSE's market infrastructural capabilities and MSCI's globally recognized index expertise. Through this partnership, we aim to develop and expand MSCI-linked derivatives products on BSE, providing market participants with greater opportunities to access and manage exposure to global and Indian markets. The collaboration marks an important step in broadening our derivatives ecosystem and strengthening BSE's connect with domestic and international investors. This reinforces our strategy for offering differentiated products that addresses the evolving requirements of market participants. Moving to other operational revenue streams, BSE's co-location and other connectivity charges, including throttle charges, continue to perform well, with revenues of ₹103 crores in H1 FY '27. We remain committed to further expanding our co-location infrastructure in line with client demand and growing market partici- participation. Turning to our mutual fund distribution business, BSE StAR MF continues to deliver strong and consistent growth. During Q2 FY '27, the platform processed 24.5 crore transactions, representing
Sundararaman Ramamurthy (BSE Ltd): healthy 22% year-on-year increase. Revenues for the H1 FY '27 grew 11% year-on-year, Rs. 146 crore, reflecting continued growth in investor participation and increasing scale of India's mutual fund ecosystem. As mentioned in my last earnings call update, Star NPS platform by BSE Technologies continues to expand by integrating central recordkeeping agencies and pension fund managers, thereby providing a unified architecture for seamless NPS adoption and management. Through this initiative, we are strengthening our position as a comprehensive investment and retirement solutions platform, supporting investors throughout their long-term wealth creation journey. During the quarter, BSE also signed MoUs partnering with Government of Andhra Pradesh to advance SME ecosystems, investor protection, municipal finance, collaborating with MMTC-PAMP to develop electronic gold receipts, and engaging with Chamber of Marathwada Industries and Agriculture and Meesho to enhance SME awareness in capital market participation. In summary, the first half of FY '27 has been a defining period of structural growth for BSE, characterized by robust financial expansion across our core business verticals, accelerating market participation, and critical platforms scalability. This strong H1 performance directly reflects the growing scope and resilience of our business model. As we scale, our focus remains firmly anchored on reinforcing India's market infrastructure, diversifying our multi-asset product suite, and delivering long-term, sustainable value for our stakeholders. This institutional progress has been validated by premier global industry benchmarks. BSE was recently honored by Euromoney as Asia's Best Derivatives Exchange and received the Innovation of the Year Award, while FOW Asia Pacific named as Exchange of the Year. Crucially, the deep capabilities of our subsidiaries were also recognized, with BISL awarded Asia Pacific Best Index Benchmark Provider, and BSE CCL winning Asia's Best Clearing House, complemented by the Best Content Marketing Award at the AFAQ's BrandFin Awards. These accolades comprehensively validate the operational excellence, technological superiority, and comprehensive maturation of the BSE ecosystem. Looking forward, we are highly confident in the secular, long-term expansion of India's financial architecture. Equipped with a resilient, diversified business model, deep network effects across our transactional platforms, and an unyielding commitment to core technological innovation, I would say unwavering commitment to core technological innovation, BSE is uniquely positioned to capture incremental market volumes, pioneer sophisticated financial products, and drive
Sundararaman Ramamurthy (BSE Ltd): upwarding stakeholder value. Thank you for your enduring trust and strategic partnerships. With these updates, I now hand hand the call over back.
Anand Sethuraman (BSE Ltd): Thank you, sir. We will now begin the question-and-answer session. In the interest of time and to ensure all participants have an opportunity to address the management, we kindly request you to limit your remarks to maximum of two questions each. Should you have further questions, you will be welcome to rejoin the queue. Thank you.
Moderator: Thank you very much, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Participants are requested to restrict themselves to two questions only. First question is from the line of Sumit Singhania from Macquarie, please go ahead.
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