NSE makes provision for Rs 1,297 crore for SEBI settlement, Q2 profit drops but underlying business strong

NSE Q2 profit drops on one–time SEBI settlement provision, but underlying business strong

NSE on Tuesday reported a sequential drop in consolidated profit after tax (PAT) to Rs 2,098 crore in the quarter ended September FY26 (Q2FY26) compared to Rs 2,924 crore in Q1FY26, as the exchange made a large one-off provision of Rs 1,297 crore towards the settlement applications it has filed with the Securities and Exchange Board of India (SEBI) for the colocation and dark fibre matter. On the normalised basis, NSE’s consolidated PAT for Q2FY26 would have been Rs 3,396 crore, which implies a strong sequential growth of 16 per cent QoQ.

NSE said in its press release, “During the quarter, NSE has recognised a provision of Rs 1,297 crores, including interest, towards the settlement applications that NSE had filed with SEBI under SEBI (Settlement Regulations) 2018 with respect to Colocation and Dark Fibre matters. Revert from SEBI on the above-mentioned applications is awaited”. NSE had filed the settlement application in June this year and outcome is awaited. In June the media reports suggested that the NSE had proposed to settle the case by paying Rs 1,388 crore for both the cases of co-location and dark fibre.

NSE further said that this is in addition to Rs 100 crores imposed by the SAT in the Colocation WTM appeal which had been duly adjusted against the amount deposited by NSE with SEBI during the year ended March 31, 2023.

Consolidated total income for Q2FY26 stood at Rs 4,160 crore versus Rs 4,798 crore in Q1FY26. Revenue from transaction charges came in sharply lower at Rs 2,785 crore, down 12 per cent QoQ due to decline in traded volumes. In equity options NSE’s market share declined from 78.6 percent to 75.6 percent compared to the last quarter.

On a consolidated reported basis, operating EBITDA for Q2FY26 stood at Rs 1,484 crore compared to Rs 3,130 crore last quarter. Excluding the provision, operating EBITDA was Rs 2,782 crore.

NSE said it continues to hold global leadership ranking as the world’s largest derivatives exchange by volume and the second largest in equity segment by electronic order book trades.

The exchange also highlighted that the outcome on the settlement applications with SEBI remains uncertain at this stage and therefore the provisioning in Q2FY26 is purely accounting recognition.