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Informist, Wednesday, Aug 7, 2024

 

--BSE Apr-Jun consol revenue 6.08 bln rupees vs 2.16 bln

--BSE: Apr-Jun consol trade charge income 3.7 bln rupee vs 2.5 bln QoQ

--BSE: Apr-Jun consol operating EBITDA margin 47% vs 20% qtr ago

--BSE: Apr-Jun consol operating EBITDA 2.8 bln rupee vs 962 mln qtr ago

 

By Rajesh Gajra

 

MUMBAI – BSE Ltd's topline performance in the June quarter as against the previous quarter was aided by a surge in revenue from equity derivatives transaction charges. But a decline in revenue from transaction charges in cash market segment capped the revenue growth. The net profit more than doubled sequentially, primarily on the back of a high expense base as the March quarter had seen BSE make a large provision for demand from the Securities and Exchange Board of India on differential turnover fee for past periods.

 

In Apr-Jun, the exchange reported a 2.47 times, or 148%, sequential rise in consolidated net profit to 2.65 bln rupees. BSE's consolidated revenue from operations rose 24% on quarter to 6.08 bln rupees on the back of a 2.13 times increase in transaction charges in the equity derivatives segment to 2.42 bln rupees. However, the transaction charges revenue in the cash market segment fell 16.6% sequentially to 755 mln rupees.

 

The consolidated transaction charges rose 48% on quarter to 3.7 bln rupees, while the treasury income on clearing and settlement funds went up by 7.6% to 620 mln rupees. Revenue from other securities services, which included data dissemination fees, co-location charges, and book-building fees, increased sequentially by 16% to 610 mln rupees.

 

The revenue growth was reined in by a 7.3% sequential decline in revenue from listing fees and other services to listed companies.

 

BSE's consolidated operating profit, as denoted by the earnings before interest, tax, depreciation, and amortisation, jumped 2.9 times to 2.8 bln rupees from the previous quarter. This was predominantly on account of a 50% on-quarter fall in regulatory expenses to 948 mln rupees. The EBITDA margin expanded sharply to 47% from 20% a quarter ago, on the back of the surge in EBITDA.

 

The regulatory expenses, which had a large share of 48% in total operating expenses in the March quarter, contributed only 29% in the June quarter. The exchange had made a provision of 1.7 bln rupees towards SEBI's demand for differential in turnover fee based on notional value of options trades. In April, SEBI told BSE that in case of options contracts, the annual turnover was required to be computed on the basis of notional value.

 

For all prior years, including 2023-34 (Apr-Mar), when the index options turnover surged on the exchange, BSE had been calculating the turnover based on premium turnover. The notional turnover is in multiples of premium turnover and SEBI's demand meant that the BSE had to pay the differential of 686.4 mln rupees for past financial years up to 2022-23, which in turn included interest component of 303.4 mln rupees. The differential turnover fee for 2023-24 was 963 mln rupees.

 

The consolidated operating profit of BSE was also aided by a 5.7% sequential decline in administrative and other expenses, including liquidity enhancement scheme expenses, to 529 mln rupees. There was, however, a jump of 27% on quarter in clearing house expenses to 806 mln rupees.

 

In a post-earnings conference call with investors and analysts today, BSE's Managing Director and Chief Executive Officer Sundararaman Ramamurthy said that the revision in transaction charges for the equity derivatives segments during the June quarter significantly contributed to the exchange's financial performance this quarter. From May 13, the transaction charges were revised by the BSE for Sensex options and Bankex options. The transaction charges for incremental billable monthly were revised upwards by more than 20?ross six slabs.

 

Ramamurthy said that the exchange was currently in the process of redesigning the existing charge structure to make it uniform for all the members in the equity derivative segment to comply with SEBI's recent circular ordering market infrastructure institutions to ensure that the transaction charges levied on brokers were true to label. "The announcement for the new charges will be made separately," he said.

 

BSE's consolidated net profit's jump of 2.47 times mirrored the 2.9 times surge in operating profit. Tax expenses were up sharply by 81% on quarter to 850 mln rupees, partly reining in the net profit growth.

 

Today, shares of BSE ended at 2,398.55 rupees on the NSE, up 3.5% from Tuesday.  End

 

Edited by Akul Nishant Akhoury

 

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