National Stock Exchange of India Ltd (NSE) Q2FY27 Concall Transcript - Sep-2026 Qtr
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Moderator: Ladies and gentlemen, good day and welcome to the Q2 FY '27 Earnings Conference Call, hosted by National Stock Exchange of India Limited. 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 call, please signal an operator by pressing "*", then "0" on your touch-tone phone. I now hand the conference over to Shri Ian D'Souza, CFO of NSEIL. Thank you, and over to you, sir.
Ian D'Souza (National Stock Exchange of India Ltd): Thank you, Rio. Good evening, everyone and welcome to NSE's earnings call to discuss the results for the quarter and half-year ended 30th September, 2026. Please note that this conference call is being recorded and a transcript of the same will be available on the BSE exchange website and also NSE website. The financial results and investor presentation are also available on our website and BSE website. Joining us today on this earnings call is the NSE leadership team, consisting of our MD & CEO, Ashishkumar Chauhan, Viral Modi, Executive Director, Vertical 1, Critical Operations, Sanjay Shorey, Executive Director, Vertical 2, Regulatory, Compliance, Risk Management, Sriram Krishnan, Chief Business Development Officer, Sharath Dakaty, Chief Human Resources Officer, Piyush Chourasia, Chief Regulatory Officer, Shobha Sundarram, Chief Enterprise Risk Officer, Mayur Sindhwad, Chief Technology Officer, Operations, Sampath Manickam, Chief Technology Officer, Technology Infrastructure, Rajesh Thapar, Chief Information Security Officer, Vikram Kothari, MD & CEO, NSE Clearing Limited, Aniruddha Chatterjee, Managing
Ian D'Souza (National Stock Exchange of India Ltd): NSE Indices Limited and NSE Data & Analytics Limited. Mr. Balasubramaniam, Managing Director and CEO, NSE International Exchange. Mr. Neeraj Kulshrestha, Managing Director, NSE IFSC Clearing. Ashish Krishna, Managing Director, NSE Investments. Tirthankar Patnaik, Chief Economist. Ambar Gupta, Head Legal. Kunal Pattani, Head Marketing and Corporate Communications. Prajakta Powle, Company Secretary and Compliance Officer. We also have other colleagues from Finance, Investor Relations, Secretarial and Corporate Communications with us all. Please note that the statements made on this call may reflect the company's outlook for the future, which may be construed as forward-looking statements. Such forward-looking statements must be reviewed in conjunction with the risks that the group faces. The actual performance or events may differ from those in forward-looking statements as a result of various uncertainties and factors which may beyond the company's control. With that, I would now like to hand over the call to Ashishkumar Chauhan, MD and CEO of NSEIL for his remarks. Over to you, sir.
Ashishkumar Chauhan (National Stock Exchange of India Ltd): Thank you, Ian. Good evening everyone. I'd like to begin by expressing my gratitude to our shareholders and investors for the trust they have placed in NSE during our recent initial public offering, in which more than 34 lakh retail investors were allotted shares. I'm deeply grateful to the Securities and Exchange Board of India, its chairman Shri Tuhin Kanta Pandey ji for enabling the listing of one of the world's largest and most technologically advanced market infrastructure institutions. I also extend my sincere thanks to the Government of India, NSE board members, employees, investors, issuers, intermediaries, member stock brokers, advisors, and all of those who have supported NSE on its journey to listing. Let me begin with an overview of the macroeconomic environment. India remains resilient despite a challenging global environment. The Reserve Bank of India projects GDP growth of 7.1% for fiscal 2027 supported by domestic consumption, investment, and services. Equity markets remain volatile amid geopolitical tensions, fluctuation in crude oil prices, and tighter financial conditions. Nevertheless, the long-term structural outlook for Indian equity markets remain intact. India remains the world's fourth largest equity market with a market capitalization of approximately 4.9 trillion US dollars as of 30th September 2026. Investor accounts crossed 27 crores in September 2026. Unique registered investors reached 13.7 crores. Domestic institutional investors remain net buyers for the 22nd consecutive quarter. Their investment of 1.7 lakh crore, US dollar 17.8 billion, in the September quarter helped cushion volatility in global flows. Within this operating context, NSE's performance continues to be resilient. I will now cover the key business initiatives for the first half of fiscal 2027. NSE commenced live trading in electronic gold receipts on May 18, 2026. EGRs are transparent, standardized, exchange-traded instruments backed by physical gold. We have also empanelled Augmont as a strategic partner to promote EGRs and facilitate conversion between physical gold and EGRs. We signed memorandum of understanding with the Steel Users Federation of India and Bharat Metal Exchange to develop steel and non-ferrous metal derivatives. We received a no objection certificate from SEBI for futures contract on Corporate Bond Index, subject to approval from the Reserve Bank of India. These contracts will help participants manage risks in the corporate bond market. In the area of technology, we remain committed to building market infrastructure that is trusted, resilient, and transparent. Under SEBI's regulatory sandbox,
Ashishkumar Chauhan (National Stock Exchange of India Ltd): liquidity and accessibility for retail investors. NSE remains focused on strengthening investor protection and market integrity, while continuing to build a capital market framework that is transparent, robust, and inclusive. The corpus of the NSE Investor Protection Fund remains adequate at ₹2,973 crore as of September 30, 2026. During the first half, we also conducted more than 10,500 investor awareness programs, reaching over 5.2 lakh participants. As we commence our next phase as a listed company, NSE being a first-line regulator, remains highly compliant in and committed to playing an enabling role in fund mobilization, capital formation, wealth creation, and job creation, as well to empowering every Indian to participate in the nation's growth story with trust and confidence. I now hand over to my colleagues, our Chief Financial Officer, Shri Ian Desouza, and our Chief Business Development Officer, Shri Sriram Krishnan. Over to Ian.
Ian D'Souza (National Stock Exchange of India Ltd): Thank you, sir. I will now take you through NSE's consolidated financial performance for the quarter and six months ended September 30th, 2026, and share some perspectives on revenue quality, operating leverage, capital strength, and long-term value creation. NSE's performance during the period was supported by continued investor participation, higher trading volumes across asset classes, and sustained capital market activity. For Q2 FY27, consolidated total income increased by 9% YoY to report at ₹4,554 crore. Revenue from operations, which constitutes 89% of total income, increased 11% YoY to report at ₹4,067 crores in Q2 FY27. Profit before tax from continuing operations increased 13% YoY to report at ₹3,425 crores. Normalized for one-offs in the corresponding period of the previous financial year, profit before tax from continuing operations increased 9% YoY. Profit after tax for Q2 FY27 stood at rupees ₹2,578 crores, a growth of 23% YoY, and earnings per share was ₹10.41 on a non-annualized basis, reflecting the strength of NSE's underlying operating franchise. In terms of performance in H1 FY27, consolidated total income increased by 9% YoY to report at ₹9,807 crore, while revenue from operations increased 12% YoY to report at ₹8,627 crore for H1 FY27. Profit after tax increased 13% YoY to report at ₹5,698 crore, and earnings per share was ₹23.02 on a non-annualized basis. When it comes to revenue quality and diversification, growth in revenue from operations on in Q2 FY 2027 was driven by growth in transaction charges, listing revenues, our data-related segment such as rack charges, data feed and terminal services charges, index licensing, and data subscription fees, clearing and settlement related revenues, and operating investment income. Coming to transaction charges, in Q2 FY27, transaction charges increased by 9% year-on-year to ₹3,035 crore, driven by higher volumes in cash market and equity option segments. The key contributors in Q2 FY27 broad mix were as follows: Transaction charges from options increased by 6% YoY to ₹2,216 crore, of which revenue from weekly expiries, i.e., Nifty index options, was 1,600 and 99 crores, accounting for 38% of total income in Q2 FY27. The revenue mix within transactions is gradually broadening with other products such as cash equities, futures, and mutual funds growing faster. Transaction charges from cash market segment increased by 30% YoY to report at ₹474 crore, led by healthy growth in investor participation. Transaction from transaction charges from equity futures was rupees ₹328 crore, of which contribution from NSE IX, our global exchange, was ₹72 crore. Mutual fund segment continued to scale up and record a strong growth of 3.5x to report at ₹13 crore in Q2 FY27, up
Ian D'Souza (National Stock Exchange of India Ltd): rupees 4 crores in Q2 FY26. While transaction charges constitute 75% of NSE's operating revenue in Q2 FY27, non-transaction revenue streams such as listing, data center, connectivity charges, data feed, and terminal services and clearing settlement related income continue to strengthen, thereby diversifying NSE's revenue base. These revenue streams complement the core exchange franchise, i.e., trading services, and continue to build momentum in Q2 FY27. Listing services revenue increased by 70% YoY to report at ₹150 crores, largely on account of increase in book building fees during the quarter reflecting in higher number of main board listings. There were 62 main board listings during the quarter and rise in issuing size. Total equity raised during the quarter was ₹2.4 trillion, up 93% YoY. Data-related services contributed close to 13% of operating income and increased 8% YoY to report at ₹531 crores in Q2 FY27. This comprises data center rack charges, data connectivity charges, data feed and terminal services, and licensing services. Revenue from non-transaction businesses benefit from structural trends, including increasing market participation, growth in passive investing, greater demand for market intelligence, growing consumption of data products, and increased use of market infrastructure services. When it comes to operating investments expenses, consolidated expenditure decreased 51% YoY to report at ₹1,161 crore in Q2 FY27, largely due to one-time provision in for SEBI settlement fees in the same quarter in the year-ago period. Excluding the impact of provision towards the settlement fees, consolidated expenditure in Q2 FY27 would increase 10% YoY, largely driven by continued investment in people, technology, resilience, and regulatory capabilities. Consolidated expenditure decreased 31% YoY to ₹2,333 during H1 FY27. In terms of the composition of consolidated expenditure, 18% of the expenses in H1 FY27 is volume linked expenditure such as regulatory expenses and clearing and settlement expenses. Technology expenses contributed to 32% of the total expenditure, followed by employee expenses which attributed to 20% of the total expenditure in H1 FY27. Employee expenses in Q2 FY27 were up 18% YoY, driven by usual annual increments, increase in employee base, and actuarial assumptions related to wage board. We have added 104 employees year-on-year, primarily in critical functions related to technology and regulatory functions across the group. For the half year FY27, employee expenses were ₹463 crores and accounted for 5.4 of revenue 5.4% of revenue from operations. Technology expenses, NSE continues to operate and enhance one of the most advanced market infrastructure technology platforms. Technology expenses increased in Q2 of FY27 by 22% year-on-year, driven by investments in resilience, modernization of platforms, and cyber security. We continue to make investments across strategic initiatives, such as data warehouse, modernization of regulatory applications, and our testing Center of Excellence. NSE has also enhanced its mobile application and website for investors to provide them with data analytics capability through Market Lens and launch of MCP, Model Context Protocol, based connectivity for external agents to AI agents to get market data. For H1 FY27, technology expenses were ₹751 crores and represented 8.7% of revenue from operations, demonstrating a stable level of investment despite increasing scale and complexity of operations. When it comes to operating leverage, NSE's operating model continues to demonstrate strong operating leverage with continued investment
Ian D'Souza (National Stock Exchange of India Ltd): as people, technology, and infrastructure. This combination of growth, scale, and disciplined investment continues to support strong profitability and margin performance as reflected in H1 FY '27 operating EBITDA margin of 77% and normalized profit before tax margin of 76% and a net profit margin of 58%. Now coming to NSE's balance sheet strength and risk management. NSE maintains one of the strongest balance sheets among market infrastructure institutions. Our strong balance sheet supports technology investment, growth initiatives, financial safeguards, and shareholder returns. As of September 30th, 2026, NSE's net worth stood at ₹28,907 crores. Total treasury investments stood at ₹52,613 crores, out of which corporate treasury investments stood at ₹34,699 crores. Return on equity for H1 FY '27 stood was 19% on a non-annualized basis. Risk management remains central to our operating framework. These safeguards along with our integrated clearing, surveillance, and risk management framework continue to support market integrity and financial stability. As of September 30th, 2026, the core settlement guarantee fund of the group stood at ₹13,665 crores. The Investor Protection Fund corpus stood at ₹2,973 crores, and our restricted reserves stood at ₹4,805 crores. I will now briefly turn to the performance of our key subsidiaries that broaden the group's participation across the capital market value chain. NSE Clearing reported a total income of ₹1,152 crores, up 16% YoY, driven by an increase in clearing and settlement revenue and higher investment income. NCL's profit after tax also increased 11% YoY to report at ₹597 crores in H1 FY '27. NSE Data & Analytics reported a total income of ₹278 crores, up 45% YoY, largely on account of increase in online data feed services. Profit after tax increased 61% YoY to report at ₹123 crores in H1 FY '27. NSE Indices that provides services such as creation and maintenance of all Nifty branded indices reported a total income of ₹104 crores in H1 FY '27, up 10% YoY. Profit after tax for NSE Indices increased 9% YoY to ₹63 crores. NSE IX, our wholly owned subsidiary in GIFT City reported an increase of 17% YoY in total income to report at ₹79 crores for H1 FY '27. Profit after tax increased 4.3x to report at ₹15 crores. Overall, given our market participation, balance sheet strength, technology capabilities, and vertically integrated infrastructure, we believe NSE remains well-positioned to participate in the next phase of India's capital market development. With that, I will now hand over to my colleague, Shri Sriram Krishnan, who will discuss our business and operational performance in greater detail.
Sriram Krishnan (National Stock Exchange of India Ltd): Thank you, Yatrik. Good evening, everyone. I'll walk you through the key developments across our business segments. NSE continues to strengthen its role as the central engine of capital formation, effectively and efficiently channeling household savings into productive investments and remains the exchange of choice for Indian corporates across equities and debt markets. During the September quarter, a total of ₹7.4 lakh crores was raised via equity, debt, and business trusts on the NSE platforms, which was 64% higher than the funds raised by companies in the corresponding quarter of the previous fiscal FY '26. Equity markets witnessed robust primary market activity in Q2 of FY '27. A total of 87 companies were listed across the Mainboard and SME platforms, raising ₹66,447 crores, up nearly 12x on a QoQ basis and 35%
Sriram Krishnan (National Stock Exchange of India Ltd): on year-on-year basis. Notably, the month of September alone saw a total of 31 listings, marking the highest number of listings in a single month. The average mainboard IPO size increased by over 79% quarter-on-quarter to Rs. 1,050 crores in Q2 of FY27. NSE Emerge continued to support capital formation amongst smaller enterprises, facilitating Rs. 1,329 crores in fund raising through the listing of 25 companies in Q2 of FY27. Debt markets remained robust, with Rs. 5 lakh crores mobilized through commercial papers and NCDs in Q2 of FY27. This took cumulative mobilization during H1 of FY27, which is April to September, to Rs. 9.9 lakh crores, marking a 30.8% increase from Rs. 7.6 lakh crores in the corresponding period last year. Our Electronic Bidding Platform facilitated primary market bond issuances worth Rs. 1.3 lakh crores in Q2 of FY27 across 76 issuers, more than double the amount raised in the same quarter last year. During the quarter, NSE's electronic bond platform, EBP bidding platform facilitated India's first tokenized bond issuances by REC Limited and Larsen & Toubro, raising Rs. 500 crores each. This marks an important milestone in the adoption of technology-led innovation in India's corporate bond market. Let me now turn to NSE's domestic rankings and market leadership. Across product segments, NSE continues to retain its leadership position. In Q2 of FY27, NSE's market share stood at close to 92% in the equity cash market, 99.8% in equity futures, and 68% in equity options based on premium turnover. In the debt secondary market, NSE maintained strong leadership in Q2 FY27 with market share of 96% in the RFQ segment, 80% in CBRICS, and nearly 100% in the tri-party repo segment. Now turning to trading activity and new product launches. Trading activity in Q2 of FY27 across cash market and equity option segments improved on a year-on-year basis, while commodity derivatives recorded strong growth. Average daily turnover, ADT, in the equities cash market increased 23.7% YoY to Rs. 1.18 lakh crores in Q2 of FY27. In the equity option segment, ADT based on premium value in Q2 of FY27 increased by 3.3% year-on-year. Equity futures ADT declined 11.7% year-on-year to Rs. 1.25 lakh crores in Q2 of FY27, partly on account of changes in taxation implemented earlier this year. Activity in the debt segment continues to witness steady traction. The RFQ platform witnessed a 10% year-on-year increase in ADT to Rs. 6,508 crores in Q2 of FY27. Tri-party repo activity remained strong in Q2 of FY27, with ADT rising 5.4% QoQ and 152.8% year-on-year to Rs. 6,825 crores. July 2026 also recorded the highest ever monthly traded value of Rs. 1.56 lakh crores on the platform. Online bond platform providers also gained further traction, registering a record of over 17.18 lakh gross trades in Q2 of FY27 and 30.45 lakh gross trades in H1 of FY27. The mutual fund segment witnessed strong growth in transactions. Total MF orders increased 155% year-on-year from 2.64 crores in Q2 of FY26 to 6.72 crores in Q2 of FY27. The market share at the end of Q2 FY27 stood close to 22%, up from 12% in the corresponding quarter of the last fiscal year. We strategically diversified our product suite across multiple segments in the last few years. Activity in commodity derivatives
Sriram Krishnan (National Stock Exchange of India Ltd): to ₹137.6 crores, while commodity options average daily premium turnover surged by 116% quarter-on-quarter to ₹296.8 crores, reaching 8x its Q2 FY '26 level. Crude oil and electricity contracts remained the principal drivers of commodity futures activity, while crude oil options accounted for the overwhelming majority of commodity options premium turnover. Following the expiry day revision from 2 to 7 business days prior to futures expiry, the crude oil options contract have continued to gain market traction. Average daily traded quantity rose from about 7.7 million barrels in FY '25 to 9.4 million barrels in FY '26, and further to about 27.4 million barrels in the first half of FY '27. The daily premium turnover increased by over 180x from December 2025 expiry, that's about ₹22 crores, to October 2026 expiry, that's about ₹4,003 crores. On 8th October alone, which was the latest expiry day, volume of over 1,047 million barrels was traded. Gold 10 grams futures were launched on March 16, 2026, with similar with smaller and affordable lot size to democratize access for retail participants. As of the 30th of September 2026, this contract recorded a turnover of ₹988 crores and a trading volume of 65,372 contracts. Since its launch on July 14, 2025, monthly electricity futures have clocked a cumulative turnover of ₹16,864 crores across 871,988 contracts, representing 43,599 million units of electricity. NSE's market share has been close to 64% for July '25 to September '26 period, underscoring the contract's acceptance as a hedging and price discovery instrument in India's power markets. EGR segment that was launched in May 2026 has seen strong interest from the investor community and other ecosystem players. During the quarter, we continued to focus on strengthening the EGR ecosystem as we empaneled Augmont as a key strategic partner. We've also developed an EGR mobile app to digitize the investor journey from physical gold to EGRs. NSE continues to strengthen the Social Stock Exchange, SSE, ecosystem, accounting for 94% of funds raised and 82% of unique projects across exchanges. So far, 209 not-for-profit organizations have registered on NSE SSE, of which 98 are active. 16 projects, including 2 listed on both exchanges, have raised over ₹44.5 crores across sectors such as health care, education, water, sanitization, skilling, agriculture and poverty alleviation. The pipeline remains encouraging with 23 projects targeting mobilization of more than 113 crore rupees. Further, NSE SSE facilitated its first blended financing project by the National Skill Development Corporation on October 22, 2026. With a total outlay of ₹11.26 crores, the project combines candidates' contributions, Zero Coupon Zero Principal funding, and outcome-based financing by the Government of Madhya Pradesh, marking an important step towards outcome-linked social financing. Over the past 3 decades, NSE has played an important role in transforming India's capital markets through technology, transparency, and efficiency. Looking ahead, we will continue to work closely with regulators, issuers, and market participants to deepen markets, broaden investor participation, and facilitate capital formation. With this, let me hand over the call back to the operator for the Q&A session.
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