BSE Q2 FY27 Earnings Call: H1 Revenue Jumps 49%, Guides 65-70% EBITDA Margin

Record H1: Revenue Up 49%, EBITDA Margin Expands to 67%

• H1 FY 2026-2027 consolidated revenue rose 49% YoY to Rs.3,257 crore (vs Rs.2,184 crore), with operational revenue up 48% to Rs.2,999 crore; net profit grew 53% YoY to Rs.1,680 crore, a 52% net margin.
• Transaction charges jumped 60% to Rs.2,456 crore in H1 FY 2026-2027 (from Rs.1,531 crore) across equity cash, derivatives, MF and clearing; other operating income rose 23% to Rs.200 crore.
• Operating EBITDA (incl. core SGF contribution) grew 55% to Rs.2,019 crore in H1 FY 2026-2027, with margin expanding to 67% from 64%; operating expenses rose 36% to Rs.980 crore, with ~50% of opex being volume-linked regulatory and clearing/settlement fees.
• Record quarterly cash market ADTV of Rs.10,494 crore in Q2 FY 2026-2027; index options premium ADTV of Rs.22,531 crore in Q2 FY 2026-2027 marked the first sequential contraction (down from Rs.29,615 crore in Q1 FY 2026-2027) before a record monthly Rs.35,481 crore in October 2026.
• Macro backdrop: India's real GDP grew 7.8% in Q1 FY 2026-2027; FIIs net sold ~Rs.35,861 crore of Indian equities in September 2026 while domestic institutional investors deployed ~Rs.76,030 crore; mutual fund AUM reached ~Rs.82.64 lakh crore as of September 2026, expanding 12.5% during H1 FY 2026-2027.

Record IPO Pipeline and Broadening Retail Participation

• Record 71 main board IPOs raised over Rs.84,000 crore in H1 FY 2026-2027 — the strongest on record — including a record 32 listings in September 2026 raising Rs.40,354 crore.
• BSE SME crossed 800 listed companies in October 2026 (vs 600 a year earlier); the latest 200 SME listings raised Rs.8,387 crore, ~45% of cumulative platform fundraising.
• Total funds raised across BSE platforms exceeded Rs.13.9 lakh crore in H1 FY 2026-2027 (equity, debt, bonds, CPs, REITs, InvITs); management noted 150+ companies are seeking to list, targeting ~Rs.1.5 lakh crore of fundraising (period unspecified).
• Investor base reached 26.8 crore registered accounts with 3.9 crore additions over the year to Q2 FY 2026-2027; 11 states now exceed 1 crore investors each, supported by 2,328 investor awareness programs in H1 FY 2026-2027 reaching over 1.2 lakh participants.
• MOUs signed in Q2 FY 2026-2027 with the Government of Andhra Pradesh (SME ecosystem, investor protection, municipal finance), MMTC PAMP (electronic gold receipts), and the Chamber of Marathwada Industries and Agriculture and Misho (SME awareness).

Sensex 30 Product-Market Fit vs. Nascent Monthly-Contract Share

• Equity derivatives average daily premium turnover grew ~50% YoY in Q2 FY 2026-2027 (analyst-cited); management attributed this to product-market fit of the Sensex 30 derivatives product (launched May 2024), developed after voice-of-customer feedback from 350+ brokers, and to global demand for another exchange reducing concentration risk.
• Monthly index options market share stands at ~2-2.3%, with other-than-expiry-week share at 6-7% on a regular basis (Q2 FY 2026-2027); growth had trended faster until 2-3 months ago when structural changes and uncertainties caused a lull — management is "very confident" of further growth as global uncertainties settle, with no numeric target given.
• Analyst cited BSE's 65% market share on Sensex (Thursday) expiry vs the larger exchange's 90% on its own expiry (Q2 FY 2026-2027); management has NOT evaluated the new expiry-day settlement rule from a BSE volume/market-share perspective, though it views SEBI's change as "a very positive move" and BSE "may stand to benefit" like every other exchange.
• Double-digit cash equity market share goal is yet to be reached (period unspecified); common contract note facilitation has happened, but KYC-completed broker clients eligible to trade on both exchanges are yet to be permitted on BSE — management is working with brokers for a "fair and equitable field."
• Cash equity volumes remain down sequentially vs Q1 FY 2026-2027, attributed to macro-driven FPI outflows, partially offset by new IPO volumes — described as a "mixed bag"; direct execution is not yet at desired scale and new-listing volume expectations have not been fully met.
• Member additions are on track: growth in brokers and FPIs is tracking exactly in line with goals set on the previous call (exact figures in the investor presentation, not quoted on the call).

Charges Held at Nascent-Phase Levels; MSCI and BKC in the Pipeline

• No charge-revision timeline committed: BSE charges near-nil on futures and less than other participants across equity derivatives; management will revise transaction and co-location charges "at the appropriate time to appropriate level" based on its mechanism for ascertaining the customer's voice — no specific timeline or magnitude given.
• MSCI index derivatives applications submitted to the regulators and the final outcome is awaited; once received, an implementation plan will be rolled out and communicated to the marketplace. BSE entered a strategic collaboration with MSCI to develop and expand MSCI-linked derivatives products on BSE.
• SEBI's new expiry-day settlement rules take effect in December (Q3 FY 2026-2027): settlement price for contracts expiring on expiry day will be the last half-hour VWAP, reverting to the prior process.
• On NSE F&O eligibility: management clarified, citing the SEBI chair, that no regulatory framework currently permits an exchange to trade on or list on itself; BSE will monitor all newly listed scrips (including NSE) against SEBI's eligibility criteria (MWPL, quarter sigma value, daily traded turnover, market capitalization) and introduce derivatives "at the exact immediate time" a script becomes eligible, subject to approvals.
• BKC co-location: MMRDA has intimated BSE of a plot allotment and the allocation letter has been received; planning on how/when to build is a work in progress — premature to state BSE's stand on the facility. BSE currently has ~500 co-location racks, all allocated, and is constructing an additional 170-190 racks as a buffer (period unspecified).
• RBI bank guarantee norms impact cannot yet be isolated — the change coincided with the STP rule change, the cash system structural change, and global turmoil; existing bank guarantees carry unexpired tenors of ~1-2 years, so any substantial reduction becomes assessable only at those expiries.

Technology Spend Uninterrupted; Low Capex Cash Outflow Is Timing, Not Cuts

• SGF decline is smoothing, not a methodology change: MD & CEO Sundararaman Ramamurthy confirmed no structural change in SGF computation; the Q2 FY 2026-2027 sequential decline reflects a calibrated approach of providing for SGF over a full one-year period, reducing single-quarter spikes.
• No reduction in technology P&L expenses: CFO Deepak Goel stated any quarter-on-quarter movement is temporary and technology spend is not going to slow down.
• Low H1 FY 2026-2027 capex cash outflow (roughly half of H1 FY 2025-2026, per analyst Davesh Agarwal) is a timing effect: commitments were made in Q1-Q2 FY 2026-2027 but corresponding cash flows had not yet occurred, per CFO Deepak Goel; there is no plan to slow capex as BSE upgrades various systems, with the full picture likely visible by end of FY 2026-2027.
• Other streams: colocation/connectivity (incl. throttle) revenue of Rs.103 crore in H1 FY 2026-2027; BSE StAR MF processed 24.5 crore transactions in Q2 FY 2026-2027 (+22% YoY) with H1 revenue up 11% YoY to Rs.146 crore; Star NPS platform (BSE Technologies) is integrating CRAs and pension fund managers.

65-70% EBITDA Margin Seen Sustainable; Cyber Risk Foremost

• EBITDA margin at 67-68% in Q2 FY 2026-2027, sustained for quite some time; management sees no reason it will not be sustained, citing extremely high cost controls and discipline.
• Margin guidance of 65-70% EBITDA — the range management is looking at today — "appears to be sustainable" over the next 1-2 years (FY 2027-2028 to FY 2028-2029), conditional on none of the flagged risks materializing.
• Cyber risk named the foremost ongoing risk by MD & CEO Sundararaman Ramamurthy for a market infrastructure institution — omnipresent and the one risk the company can actively try to control; management remains vigilant.
• Macro risks flagged beyond management control: global turmoil and supply-chain changes potentially raising cost of living and lowering the propensity to save and invest, plus a "flight to safety" dynamic that could leave emerging markets like India with depleting capital and increasing outflows during heightened global uncertainty.
• Outlook: management is highly confident in the secular long-term expansion of India's financial architecture, anchored on multi-asset product diversification and technological innovation; on volumes, it hopes government intervention to deepen market liquidity "sees the light of day" and expects stabilization in the global scenario, with no numeric volume guidance provided.