Why Did NSE's Q2 Net Profit Plummet by 33% to Rs 2,098 Crore?
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Synopsis
In a surprising turn of events, the National Stock Exchange (NSE) has reported a staggering 33% decline in net profit for Q2 of FY26. This article explores the reasons behind this drop and its implications for the exchange's financial health and future.
Key Takeaways
- NSE's Q2 FY26 net profit fell by 33%
- One-time provision of Rs 1,297 crore impacted profits
- Consolidated total income reached Rs 4,160 crore
- Transaction charges saw a 12% decline
- Operating EBITDA decreased significantly
Mumbai, Nov 4 (NationPress) The National Stock Exchange (NSE) disclosed a significant 33% year-on-year (YoY) drop in its consolidated net profit for the July–September quarter (Q2) of FY26, amounting to Rs 2,098 crore.
This decline is primarily attributed to a one-time provision of Rs 1,297 crore made for SEBI settlement fees related to the colocation and dark fibre issues.
When excluding this provision, the NSE’s consolidated profit after tax (PAT) grew by 16% sequentially to Rs 3,395 crore.
The exchange has submitted a settlement application to SEBI under the SEBI (Settlement Regulations) 2018 and is currently awaiting a response.
NSE’s consolidated total income for Q2 FY26 reached Rs 4,160 crore, down from Rs 4,798 crore in the previous quarter and Rs 5,023 crore in Q2 FY25.
Transaction charge revenues fell by 12% sequentially to Rs 2,785 crore due to lower trading activity in both cash and derivatives segments.
Total expenses for the quarter surged to Rs 2,354 crore, a significant increase from Rs 1,053 crore in Q1, driven by the settlement provision.
Excluding this provision, expenses were reported at Rs 1,056 crore. Operating EBITDA plummeted to Rs 1,484 crore from Rs 3,130 crore in Q1, but without the provision, it stood at Rs 2,782 crore with an EBITDA margin of 76%.
NSE’s earnings per share (EPS) for Q2 was Rs 8.48, down from Rs 11.81 in the previous quarter, accounting for the 4:1 bonus issue in Q3 FY25.
Had it not been for the SEBI provision, the EPS would have been Rs 13.72, reflecting a net profit margin of 63%.
For the first half of FY26, NSE’s consolidated total income was Rs 8,959 crore compared to Rs 9,974 crore the previous year.
Reported net profit for H1 FY26 was Rs 5,022 crore, while excluding the SEBI-related provision, it amounted to Rs 6,320 crore.
On a standalone basis, NSE’s total income in Q2 was Rs 3,666 crore, down from Rs 4,243 crore in Q1.
Operating revenue decreased by 9% sequentially to Rs 3,266 crore due to diminished trading volumes across various segments.
Point of View
It’s vital to recognize the challenges facing NSE amidst regulatory pressures. The reported profit decline underscores the impact of compliance costs on financial performance. However, the resilience shown in core profit metrics indicates potential for recovery as the exchange navigates these turbulent waters. NationPress remains committed to providing insightful analysis on such critical financial matters.
NationPress
09/11/2025
Frequently Asked Questions
What caused NSE's profit decline?
The decline was mainly due to a one-time provision of Rs 1,297 crore made for SEBI settlement fees linked to colocation and dark fibre issues.
How does the profit compare to previous quarters?
The consolidated net profit for Q2 FY26 is Rs 2,098 crore, which shows a 33% YoY decline compared to the previous year.
What was NSE's total income for Q2 FY26?
NSE's consolidated total income for Q2 FY26 was Rs 4,160 crore.
How did the expenses change in this quarter?
Total expenses surged to Rs 2,354 crore due to the SEBI settlement provision, up from Rs 1,053 crore in Q1.
What are the implications for NSE moving forward?
While the current decline poses challenges, the NSE's core profit metrics suggest potential for recovery as it adjusts to regulatory demands.
