What NSE Q2 results reveal about the exchange's growth outlook ahead of IPO

NSE Q2 results: A deep dive into NSE's financials reveal a meaningful impact of market regulator Sebi's derivatives-linked regulations, along with one-time provision related to the co-location case

NSE Q2 results, NSE IPO news: India’s biggest stock exchange -- National Stock Exchange of India (NSE) -- has reported its September quarter (Q2FY26) results ahead of it’s upcoming initial public offering (IPO).  

A deep dive into NSE's financials reveal a meaningful impact of market regulator Securities and Exchange Board of India’s (Sebi's) derivatives-linked regulations, along with one-time provision related to the co-location case.

 

Analysts, however, view FY26 as the "reset" year for NSE ahead of its much anticipated IPO and Dalal Street debut. They believe earnings growth will rebound from the next financial year (FY27).

 

NSE Q2 results: Earnings hit by one-time provision

NSE's Q2FY26 performance was dented by a one-time ₹13,000 crore provision related to the ongoing colocation and dark fibre settlement case with Sebi. This led to a 23 per cent year-on-year (Y-o-Y) decline in net profit to ₹2,095 crore. 

 

 

Excluding this one-off expense, analysts expect NSE's profit could have come in a range of ₹3,000–3,400 crore for the quarter.

 

Further, the exchange's operating revenue fell 18 per cent Y-o-Y to ₹3,768 crore, driven by lower trading volumes in equity cash, futures, and options segments. Transaction charges, which form nearly two-thirds of NSE's revenues, dropped 22 per cent Y-o-Y, reflecting a moderation in average daily turnover across categories following Sebi's tighter regulations around F&O trading.

 

However, non-trading income sources such as data services, listing fees, and data centre operations saw healthy growth - between 6 and 11 per cent Y-o-Y - cushioning the overall decline.

 

NSE also recorded a ₹1,200 crore investment gain from the partial sale of its stake in National Securities Depository Ltd (NSDL) during its IPO, leaving it with a 15 per cent holding. 

 

Strong operating margins

Operationally, NSE's operating costs surged 38 per cent Y-o-Y to ₹2,192 crore due to the Sebi provision, while employee and regulatory expenses declined by 4 per cent and 35 per cent, respectively.

 

Excluding the one-time hit, NSE's Ebitda margin stood at 76–78 per cent, reflecting its operational efficiency and asset-light business model.

 

Centrum Broking projects NSE's total income to grow at a 10 per cent CAGR between FY25 and FY28, reaching ₹2.56 trillion by FY28.

 

Net profit, it said, is expected to expand at a 9 per cent CAGR to ₹1.51 trillion over the same period, indicating a steady rebound in earnings once the regulatory overhang subsides.

 

NSE retains market leadership

NSE maintained its dominant market share of over 92 per cent in the cash segment and a near-monopoly in equity futures. However, its share in equity options, a key revenue driver, slipped to 75.6 per cent from 78.6 per cent in the previous quarter due to subdued derivatives volumes.

 

Management noted early signs of a recovery in activity, with trading volumes improving through September and October 2025.

 

The exchange's investor base continues to expand, with over 120 million registered investors and 240 million total accounts as of Q2FY26.

 

New product launches  

New product introductions, such as electricity futures and zero-day options, have been well-received, strengthening NSE's innovation credentials, NSE said.

 

"Electricity futures, a recent addition to the product lineup, gained healthy traction, with NSE's market share reaching nearly 74 per cent as of October 31, 2025. The exchange is also working toward introducing quarterly and annual tenors to deepen the segment. At NSE IFSC, the product suite was further expanded with the launch of 0-day options. Within commodity derivatives, crude oil options continued to scale meaningfully, with average daily traded quantity rising ~117 per cent Y-o-Y in Q2," Centrum Broking highlighted.

 

NSE IPO and outlook

NSE's IPO - one of the most awaited listings in India’s capital markets - is expected in the first half of 2026, pending regulatory approvals.

 

Analysts view the company’s financials as strong, with return on equity (RoE) projected at 31–38 per cent over FY26–FY28.

 

While FY26 is likely to be a "reset year" due to one-off regulatory costs, both Motilal Oswal Financial Services and Centrum Broking maintain that the exchange's core profitability and cash generation remain intact.

 

With a diversified revenue mix, robust balance sheet, and sustained investor participation, NSE is poised for a solid rebound in FY27, they said.