NSE Q4 FY26 Results: What Really Happened and What Lies Ahead

India's largest exchange just reported its numbers, and on the surface, FY26 looks rough. PAT down 15%. EBITDA margins compressed. EPS fallen from ₹49 to ₹42. Headlines will call it a bad year. But dig a little deeper and the story is far more nuanced — and frankly, more interesting.

On a full-year consolidated basis, NSE's total income dipped 2% to ₹18,713 crore. Revenue from operations fell 3% to ₹16,601 crore. Operating EBITDA dropped 12% to ₹11,098 crore. Profit after tax came in at ₹10,302 crore, down from ₹12,188 crore last year — a decline of ₹1,886 crore. Return on equity fell sharply from 45% to 33%.

Those are the reported numbers. Now here is what they don't tell you.

Q4 FY26 — the most recent quarter — tells a completely different story. Revenue from operations grew 32% year-on-year. EBITDA grew 30%. PAT grew 8%. The EBITDA margin held firm at 73%. Options premium average daily volumes surged 43% quarter-on-quarter to ₹76,375 crore per day. In other words, the business recovered strongly in the final quarter, and the full-year drag came almost entirely from the first three quarters of the year.

One more positive that shareholders will appreciate — NSE has announced a dividend of ₹35 per share for FY26. Given the year the company has had, that is a meaningful signal of confidence from the board.

On a normalised basis — stripping out SEBI settlement fees and other one-time items — consolidated profit before tax fell only 5%. The reported 15% PAT decline is real, but it significantly overstates the underlying business deterioration.

Most people will blame "SEBI's F&O rules" and leave it there. That is true, but incomplete. There were four distinct forces at work, and understanding each matters for judging whether this decline is structural or cyclical.

a) The SEBI F&O circular hit NSE harder than anyone else. In October 2024, SEBI fundamentally restructured India's equity derivatives market — fewer weekly expiries, larger lot sizes, higher minimum contract values. The stated intent was to reduce retail speculation. The consequence for NSE was severe because equity options alone account for 77% of NSE's total transaction revenue. When that one segment gets disrupted, there is nowhere to hide. Options average daily volumes on a premium basis fell from ₹62,449 crore per day in FY25 to ₹57,662 crore in FY26. Cash market ADV fell 7% year-on-year and equity futures ADV fell 15%. After accounting for tax, the volume decline knocked roughly ₹420 crore off consolidated profits.

b) SEBI settlement fees were a nasty and large surprise. NSE booked ₹1,432 crore in SEBI settlement fees in FY26, up from ₹670 crore the year before. These relate to ongoing regulatory proceedings including matters stemming from the co-location episode. After tax, this added approximately ₹556 crore to the profit decline.

c) Discontinued operations income collapsed. NSE earned ₹582 crore from discontinued operations in FY25. In FY26, that fell to just ₹123 crore — a direct ₹459 crore hit to reported PAT with no operational offset anywhere else in the business.

d) The cost base kept rising regardless. Technology spending rose 29% to ₹1,315 crore. Total other expenses surged 44% year-on-year to ₹3,790 crore. CSR expenses jumped to ₹230 crore. The new Labour Codes created a ₹126 crore one-time charge in Q3. After tax, this cost inflation contributed roughly ₹430 crore to the profit decline.

Put it all together: lower transaction charges (−₹420 cr), SEBI settlement fees (−₹556 cr), discontinued ops decline (−₹459 cr), higher costs (−₹430 cr), lower associate profit share (−₹21 cr), partially offset by lower income tax (+₹153 cr) — and you get to the ₹1,886 crore actual consolidated PAT decline. Every rupee accounted for, no mystery.

While NSE struggled, BSE had one of its best years ever. Revenue surging. PAT growing sharply — estimates suggest around 65% growth in FY26. The stock has been a market darling. How does the same regulatory change that crushed NSE benefit BSE?

The answer is the weekly expiry rule, and it deserves a proper explanation.

Before October 2024, NSE dominated every expiry day of the trading week — Nifty on Thursday, Bank Nifty on Wednesday, FinNifty on Tuesday, MidCap Nifty on Monday. BSE had essentially no meaningful F&O volumes to speak of. SEBI's new rule — one weekly expiry per exchange — forced NSE to give up most of its expiry calendar in one stroke. BSE responded intelligently by positioning its Sensex options expiry on Friday, a different day from NSE's Thursday Nifty expiry, directly capturing the massive pool of displaced retail traders who had nowhere else to go. BSE's Sensex options went from near-zero to lakhs of crores in notional turnover within months.

The structural difference between the two exchanges makes this asymmetry even more stark. NSE's revenue from operations in FY26 stands at ₹18000 crore. BSE's is approximately ₹4,200 crore — roughly one-fourth the size. BSE's cost base is correspondingly leaner. So when incremental options revenue starts flowing to BSE, a much larger percentage of it drops straight to the bottom line as profit. NSE, by contrast, runs the world's largest derivatives exchange — the clearing infrastructure, the technology backbone, the settlement guarantee fund — and those fixed costs don't go away when volumes dip.

BSE's growth numbers look spectacular in percentage terms because it is growing from a comparatively small base. NSE still earns 4 to 5 times more revenue from operations in absolute terms. But the directional shift matters enormously. NSE is defending a dominant position while BSE is a challenger with the regulatory wind at its back. That is a fundamentally different investor proposition, and markets are pricing it accordingly — BSE trades at around 70x earnings versus NSE's 45x in the unlisted market.

Here is the great irony of Indian financial markets — the country's largest exchange is not itself listed on any exchange. NSE has been trying to go public for years, with the IPO repeatedly delayed due to regulatory issues. In the meantime, it trades actively on the unlisted market, where the current price is approximately ₹1,900 to ₹2,000 per share.

At ₹1,900, NSE trades at roughly 45 times its FY26 reported earnings per share of ₹41.62. The book value per share stands at ₹129.75, implying a price-to-book of around 15 times — high by any conventional standard, but typical for exchange businesses which are capital-light near-monopolies.

How does this compare globally? BSE trades at approximately 70 times earnings. MCX trades at around 80 times. Singapore Exchange is valued at roughly 35 times. NASDAQ at around 30 times. NSE sits comfortably in the middle of this range — not cheap, but not obviously expensive either for a business of its quality and market position, provided one is comfortable with the regulatory and illiquidity risks of holding an unlisted stock.

The key question for valuation is not the current multiple — it is what happens when NSE eventually lists. If the market assigns BSE-like multiples post-IPO, fair value could be ₹2,300 to ₹2,500 per share. If global exchange multiples prevail instead, the downside scenario points toward ₹1,200 to ₹1,400. The range is wide, and it depends heavily on two things — growth they will see in FY26-27, and the timing of the IPO itself.

The normalised Q4 FY26 profit before tax grew 22% year-on-year and 20% quarter-on-quarter. That is the clearest signal yet that the worst is behind the business. The question for FY27 is whether that momentum holds.

Several growth drivers are genuinely exciting.

a) Commodity derivatives saw average daily turnover grow nearly 10 times in FY26 to ₹91 crore per day.

b) The Electricity Futures segment, launched only in July 2025, already generated ₹11,098 crore in annual turnover with a 72% market share.

c) NSE has tied up with S&P Global Energy for crude oil derivatives on Platts benchmarks.

d) NSE has tied up with IGX for natural gas — India's first domestically benchmarked energy derivatives contract. These are new revenue streams that did not exist two years ago.

e) The Mutual Fund platform is another underappreciated story. Orders grew 91% year-on-year to 12.1 crore in FY26, and revenue grew 38%. As India's SIP culture deepens and passive investing grows from its current roughly 15% share of equity assets under management, the NSE platform sits directly in the path of that structural tailwind.

f) The debt market business is compounding quietly but powerfully. The Request for Quote platform has grown at a 27% CAGR. The Tri-party Repo segment has grown at a 289% CAGR since FY24. As India's corporate bond market matures — which it must if the country is to sustain its infrastructure ambitions — NSE's debt infrastructure becomes increasingly valuable.

g) And then there is Index Licensing, which may be the most undermonetised asset in the entire portfolio. NSE Indices generates only ₹152 crore in annual revenue today, growing at 26% year-on-year. Yet 73% of all passive fund assets under management in India tracks Nifty indices. In the United States, passive investing accounts for over 50% of equity assets. In India, it is still under 15%. As that number grows over the next decade, Index Licensing could become one of NSE's most valuable businesses — and it currently barely registers in analyst models.

Three things will define NSE's trajectory in FY27. First, any further SEBI action on F&O — position limits, STT revision, additional expiry restrictions — would be damaging. Conversely, any relaxation, such as allowing more weekly expiries, would be significantly positive. Second, the IPO, the management has set 15 June 2026 deadline to file DRHP, when it finally comes, expect a meaningful re-rating event. Third, whether the new commodity and energy derivatives segments can scale fast enough to partially offset the structural loss in equity options market share to BSE.

NSE FY26 was a year of absorbing regulatory shock. The franchise remains exceptional — the number one equity derivatives exchange globally by number of contracts, 25.7 crore investor accounts, near-monopoly across most market segments. The Q4 recovery proves the underlying business is intact.

The bear case is straightforward: further SEBI F&O curbs plus a delayed IPO plus BSE continuing to gain options market share equals sustained earnings pressure at current valuation multiples.

The bull case is equally clear: IPO approval plus new segments like commodities and debt scaling meaningfully equals a re-rating toward ₹2,000 and beyond, with earnings growth resuming strongly in FY27 and FY28.

The risk-reward is asymmetric, and it sits entirely on two binary outcomes — Growth and the IPO. For investors with a medium-term horizon and patience for uncertainty, NSE at current unlisted market prices is a high-quality bet on India's financial market deepening story. For those who need near-term earnings visibility and liquidity, the wait may still be longer than comfortable.

This analysis is based on NSE's Q4 FY26 Investor Presentation dated May 5, 2026, and the updated investor report. This is not investment advice. All figures in Indian Rupees crore unless stated otherwise. Unlisted Share market price estimates are indicative.