Summary
BSE Limited - Q3 FY26 Earnings Call Summary Monday, February 9, 2026, 5:00 PM
Event Participants
Executives 9 Anand Sethuraman, Deepak Goel (CFO), Kamala K (CRO), Radha Kirthivasan, Rudresh Kunde, Sundararaman Ramamurthy (MD & CEO), Sunil Ramrakhiani (CBO), Vaisshali Babu, Viral Davda (CTO)
Analysts 6 Amit Chandra, Devesh Agarwal, Dikshant Boolchandani, Prayesh Jain, Supratim Datta, Sucrit D Patil
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Consolidated Revenue | ₹1,334 crores | +62% YoY; 11th consecutive quarter of record revenue; exceeds full FY25 top line. |
| Transaction Charges | ₹953 crores | +86% YoY; driven by robust growth in equity derivatives and core trading activities. |
| Investment Income | ₹84 crores | +47% YoY; reflects improved treasury yields and capital allocation. |
| Operating Expenses | ₹511 crores | +40% YoY; 51% of costs are regulatory/clearing fees directly correlated to volume. |
| Operating EBITDA | ₹732 crores | +210% YoY; margins expanded significantly to 59% from 39% YoY. |
| Net Profit (PAT) | ₹602 crores | +176% YoY; strong operational leverage and scale-driven bottom-line acceleration. |
| Core SGF Balance | ₹1,202 crores | Cumulative balance as of Jan 2026; inclusive of ₹45.6 crore Q3 contribution. |
| Avg Daily Premium Turnover | ₹19,459 crores | +100% YoY and +30% QoQ; driven by Sensex index options and Thursday expiry. |
| StAR MF Transactions | 21.7 crores | +21% YoY; achieved a monthly peak of 7.97 crore transactions in January 2026. |
Geographic & Segment Commentary
- Equity Derivatives: The segment reached record premium turnover levels with Sensex options ranking among the most actively traded global contracts. Management noted a shift in open interest and deeper participation following the transition to the Thursday expiry cycle.
- SME Platform: Achieved a milestone of 700 listed companies, with the last 100 listings occurring in a record 179 days. Total capital raised by these SMEs stands at ₹14,735 crores with a market cap of ₹1.8 lakh crores.
- BSE Index Services: Passive AUM benchmarked to BSE indices surpassed ₹2.7 lakh crores. The subsidiary has launched 50 new indices since the SPDJI stake acquisition and recently received RBI approval for debt indices.
- Mutual Fund Distribution (StAR MF): Revenue grew 14% YoY to ₹72.5 crores. A strategic MoU was signed with the Department of Posts to expand distribution into rural and semi-urban areas via India Post’s network.
Company-Specific & Strategic Commentary
- Closing Auction Session (CAS): BSE is preparing to implement SEBI’s new closing auction session by August 3, 2026, transitioning from the 30-minute VWAP methodology to improve price discovery.
- Infrastructure Expansion: Management plans to add 80 new colocation racks, bringing the total to approximately 500 racks to support latency-sensitive trading and broaden market access.
- Regulatory Compliance: Employee expenses increased by ₹22 crores due to the enactment of new Government of India Labor Codes governing gratuity and leave encashment definitions.
- Product Revamp: The Bankex index was revamped to be more broad-based, resulting in a marked increase in liquidity and market participation as a benchmark.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Core SGF Contribution | Reduced/Normalized | Having reached the 150% threshold of requirements, Q4 contributions may fall below the 5% ad-hoc rate. |
| Colocation Revenue | ₹45 - ₹48 crores per quarter | Management expects revenue to stabilize at this range; no immediate plans for ad-hoc fee hikes. |
| Cash Market Share | Strategic Growth | Focus remains on “regulatory advocacy” for common contract notes to enable best-price execution (SOR). |
| Commodity Derivatives | Future Expansion | Management intends to pursue commodities once equity derivative operations are deemed fully resilient. |
Risks & Constraints
| Risk | Context |
|---|---|
| Regulatory Changes | Recent STT increases on futures and options may slow retail growth, though management believes options volumes are historically resilient to tax hikes. |
| Competition & Algos | Implementation of Smart Order Routing (SOR) faces “bottlenecks” at the participant level, which may delay BSE’s market share gains in the cash segment. |
| Macro Volatility | Geopolitical tensions and FPI outflows (₹7 lakh crore offset by DIIs) remain a watchpoint for overall secondary market liquidity. |
Q&A Highlights
Derivatives Strategy & STT
- Question: What is the impact of the STT increase on BSE’s growth trajectory? (Dikshant Boolchandani)
- Answer: Historically, STT hikes have not meaningfully impacted options volumes. For BSE, futures are in a nascent stage, so the impact is minimal compared to the core growth driver, which is Sensex options (S. Ramamurthy).
Cash Market & Level Playing Field
- Question: Where is the journey on cash market share and institutional participation? (Amit Chandra)
- Answer: While common contract notes provide the framework, bottlenecks in algo approvals for SOR persist. Mutual funds and insurance companies are beginning to see the benefits of best-price execution on BSE (S. Ramamurthy).
SGF & Capital Management
- Question: How much runway is left for Core SGF contributions? (Swarnabh Mukherjee)
- Answer: BSE reached the 150% adequacy threshold this quarter. Consequently, the contribution was restricted to ~3% instead of the 5% cap to avoid sudden “jerks” in financials (S. Ramamurthy).
Commodities & New Products
- Question: When will BSE pursue the commodity segment? (Supratim Datta)
- Answer: BSE entered equity derivatives only 30 months ago. Commodities will be embarked upon once the exchange feels “well-stabilized and resilient” in its current segments (S. Ramamurthy).
Key Takeaway
BSE Limited delivered a landmark Q3 FY26, with consolidated revenue growing 62% YoY to ₹1,334 crores and PAT surging 176% to ₹602 crores. The performance was characterized by the 11th consecutive quarter of record revenue, primarily driven by an 86% jump in transaction charges and the continued scaling of the Sensex options segment, where average daily premium turnover doubled YoY to ₹19,459 crores. Strategically, the exchange is focusing on diversifying beyond weekly expiries, with 5% of volumes now coming from longer-tenor contracts, and expanding its infrastructure through additional colocation racks. While the regulatory environment remains dynamic due to STT adjustments and the upcoming Closing Auction Session, management remains confident that domestic liquidity and institutional adoption of best-price execution will sustain momentum. BSE is positioned for long-term growth as it transitions from a single-product success story to a broad-based market infrastructure institution.
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