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Informist, Thursday, Feb. 6, 2025

By Gopika Balasubramanium

MUMBAI – BSE Ltd.'s consolidated net profit for the December quarter declined sequentially but rose on year as the company had to make a hefty contribution towards the core settlement guarantee fund. The exchange's revenue saw the slowest sequential growth in the last six quarters.   

BSE's consolidated net profit for Oct-Dec was INR 2.2 billion, down 36.7% from INR 3.47 billion in the June quarter. Brokerage firms Mirae Asset Sharekhan and HDFC Securities had expected the stock exchange's consolidated net profit to fall 5-14% on quarter, while Motilal Oswal Financial Services had expected it to rise 6%. The company's net profit was dragged down by the INR 2 billion the BSE contributed towards the core settlement guarantee fund. In Jul-Sept, the BSE had contributed only INR 1.9 million to this fund.

Consolidated revenue for the quarter was INR 7.74 billion, up 3.7% from INR 7.46 billion in the previous quarter. The company's investment income in the December quarter fell over 13% sequentially to INR 582 million and the total income came in at INR 8.35 billion, up 2% sequentially. 

The company's total expenditure for the December quarter fell to INR 3.68 billion from INR 3.86 billion in the previous quarter. The regulatory contribution expense for the quarter, which constituted 27% of the total expenses, fell nearly 13% sequentially and were INR 982.3 million. The clearing and settlement expenses also fell to INR 824.90 million from INR 1 billion in Jul-Sept. The technology expenses were INR 399.2 million, down 3% sequentially.

Employee benefit expenses of the company rose slightly on quarter to INR 586 million from nearly INR 575 million. The other expenses incurred by the company for the December quarter rose over 29% sequentially to INR 586 million. BSE's depreciation for the December quarter was INR 302.9 million, up 4% sequentially.   

For the nine months ended December, BSE reported a consolidated net profit of INR 8.31 billion, up 24% from INR 6.71 billion reported a year ago. Consolidated revenue from operations of the company for Apr-Dec rose sharply to INR 21.28 billion from INR 9.02 billion in the same period a year ago.

Analysts and investors largely track the exchange's growth in revenue, profitability, and net profit on a sequential basis rather than a year-on-year basis, as trading volumes on the stock exchanges have grown rapidly on a continuous basis over the last few years. Further, there is no seasonality in the securities market activity.

BSE earns more than 66% of its revenue through transaction charges. The transaction charges earned increased to INR 5.11 billion for the December quarter, slightly up from INR 5.07 billion a quarter ago, the company said in an investor presentation. The exchange's treasury income on clearing and settlement funds for the December quarter declined 23% sequentially to INR 485 million. The exchange's income from services to corporates rose 25% sequentially to INR 1.5 billion.

For the nine months ended December, earnings from services to corporates rose to INR 3.65 billion, up over 47% from INR 2.47 billion for the same period a year ago. The segment 'services to corporates' comprises listing fees and book building and fees for other services. For Apr-Dec, BSE earned INR 2.51 billion from listing fees and INR 1.13 billion from book building and other services.

For the nine months ended December, the average daily turnover from the equity cash market was INR 85.36 billion, 54% higher than the INR 55.42 billion during the year-ago period, according to the investor presentation. The BSE's income from transaction charges during Apr-Dec was INR 2.51 billion, up 48% from the year-ago period. 

BSE's operating earnings before interest, tax, depreciation, and amortisation for the December quarter was INR 2.37 billion, down 40% sequentially, with an operating EBITDA margin of 31%. The company's EBITDA would have increased if it had not paid INR 2 billion towards the core settlement guarantee fund. The company's operating EBITDA, excluding the core settlement guarantee fund for the December quarter was INR 4.36 billion, up 12% on quarter, with an operating EBITDA margin of 56%.

BSE reported its earnings for the December quarter post market hours. On Thursday, shares of the company ended 4.6% lower at INR 5,567.55 on the National Stock Exchange.  End

Edited by Akul Nishant Akhoury

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