The Bombay Stock Exchange declared its Q2 earnings just a day after its recently listed peer NSE, reported Q2 performance. It’s been a volatile time for the markets, and how do the exchanges fare after the results and ahead of Diwali?
The latest quarterly results show just how differently the two exchanges are growing: BSE is expanding at a faster pace, while NSE continues to draw strength from its scale, market reach and diversified operations.
BSE’s numbers show the impact of its rapid expansion in equity derivatives. Transaction charges grew 42% to Rs 1,127.8 crore, with equity-options charges rising 53% to Rs 951.9 crore. Cash-equity charges, by comparison, increased 9% to Rs 73 crore. The exchange’s growth is being powered by a business that was a relatively small part of its operations only a few years ago.
NSE’s transaction charges were nearly three times BSE’s at Rs 3,035 crore. Its growth was more measured, but the exchange continues to benefit from a much larger base of trading activity and a broader range of revenue streams.
The most important contest between the exchanges is playing out in equity derivatives. BSE has made substantial gains in index-options premium turnover, driven by the growth of Sensex options and efforts to bring more brokers and foreign portfolio investors onto its platform.
Kotak estimates that BSE’s share of index-options premium turnover reached around 35% in H1 FY27, compared with about 3% in FY24. Its equity-options premium average daily turnover was around Rs 22,531 crore in Q2, up 50% year-on-year, although down 24% sequentially. Cash-equity average daily turnover stood at around Rs 10,500 crore, up 32% year-on-year and 6% quarter-on-quarter.
BSE managing director and chief executive officer Sundararaman Ramamurthy said during the company’s Q2 FY27 earnings call on November 4, 2026, “The monthly market share volumes is around 2%-3% for us, and the other than expiry week volumes are going to 6%, 7% on a regular basis.”
Ramamurthy said, “Our expansion spree in terms of adding more FPIs and more brokers have not yet stopped.”
The focus on non-expiry sessions matters because BSE’s options activity has historically been concentrated around expiry. Kotak estimates that its share of non-expiry-day premium turnover increased to 21-27% during April-October 2026 from 8% in November 2024. A wider spread of activity through the week would make BSE less dependent on a small number of high-volume sessions.
NSE chief business development officer Sriram Krishnan said during the exchange’s Q2 FY27 earnings call on November 4, 2026, “If you normalize the market share based on the impact from these holidays, the effective market share for Q2 of FY 2027 is almost 70%, as per our analysis.”
The expiry calendar and changes to settlement methodology matter because they can influence when traders participate and where derivatives turnover is concentrated.
BSE’s weekly expiry is on Thursday, with activity increasingly concentrated on Wednesday and Thursday. Kotak estimates that the two sessions together account for about 74% of BSE’s weekly premium turnover. This concentration leaves the exchange more exposed to regulatory measures that affect expiry-day trading.
BSE management has said the exchange is responding to changes in market structure and feedback from trading members. Ramamurthy said during the November 4 earnings call, “The market was finding it very difficult to cope up and adjust with the new CAS.”
He added, “It will help in the overall development of market, including equities and equity derivatives.”
On the exchange’s approach to market-participant requirements, Ramamurthy said, “Our stand has always been, we will do whatever the market participants find as suitable.”
NSE’s weekly expiry is on Tuesday. Its options business is spread across a much larger base of contracts, although weekly index options remain a significant source of revenue. The effect of further changes to expiry frequency, margins or intraday position limits could therefore differ between the two exchanges.
Krishnan said during the November 4 earnings call, “What it means is that the cash market and the implementation of the Closing Auction Session have both performed in an expected way.”
He added, “If any, the impact of CAS was more on determination of settlement price for expiring index options than for the cash market activity itself as such.”
The dependence on transaction charges is a key difference between the two businesses. BSE has become increasingly reliant on derivatives as its options market share has grown. Kotak estimates that transaction charges accounted for 76% of its operating revenue in FY26, compared with 30% in FY23. Equity derivatives contributed around 85% of transaction charges and 65% of operating revenue.
That concentration gives BSE significant operating leverage when trading activity rises, but also leaves its revenue more sensitive to changes in derivatives volumes, premium turnover and regulation.
BSE is looking to build other businesses alongside trading. Its StAR Mutual Fund platform processed 24.5 crore transactions in Q2 FY27, up 22% year-on-year. Platform revenue was Rs 146 crore in H1 FY27, an increase of 11%. Co-location revenue stood at Rs 103 crore in the first half. BSE said its roughly 500 existing racks were fully allocated, with another 170-190 racks under development.
NSE has a larger non-transaction revenue base. In Q2, income from listing, processing and book-building services rose 70.9% year-on-year to Rs 150 crore. Data-feed and terminal-services income increased 43.9% to Rs 165 crore, while clearing and settlement income grew 32.3% to Rs 73 crore.
NSE’s co-location business remains a significant part of its infrastructure franchise. It had around 1,870 racks, while rack charges increased 24% year-on-year. The exchange spent about Rs 490 crore on capital expenditure in H1 FY27.
BSE is trying to reduce its dependence on a fast-growing derivatives business by developing other revenue streams, while NSE is adding new services to a platform that already earns from trading, clearing, listings, data and connectivity.
NSE reported a normalised operating EBITDA margin of 75.7% in Q2 FY27. Jefferies estimates that its adjusted EBITDA margin, excluding settlement-guarantee-fund effects, could reach 78% in FY29, compared with 66% for BSE.
The brokerage attributes part of the difference to NSE’s higher clearing-market share and lower clearing and SEBI-related costs. Jefferies estimates that NSE spent 1% of operating revenue on clearing charges in FY26, compared with 6% for BSE. SEBI fees accounted for 5% of NSE’s operating revenue, against 14% for BSE.
BSE is adding co-location capacity as demand from brokers and trading members increases. Its current racks are fully allocated, and the additional 170-190 racks are intended to provide room for further growth.
NSE is maintaining a much larger infrastructure network. Its H1 capital expenditure was around Rs 490 crore, with technology and co-location expansion among the areas of spending.
BSE’s October trading data offered a sign of how much its derivatives franchise has expanded. The exchange recorded its highest monthly index-options premium average daily turnover at Rs 35,481 crore. It also recorded single-day expiry premium turnover of Rs 85,356 crore on October 22, 2026.
The management challenge is to sustain that activity while extending participation beyond the busiest sessions and building other sources of revenue. BSE is also continuing to widen its distribution network by bringing more brokers and foreign portfolio investors onto the platform.
NSE, meanwhile, is looking to use its established market infrastructure to introduce new products and services. Electronic gold receipts, corporate-bond index futures, tokenised bonds and commodity derivatives are among the areas it is pursuing.
Brokerages see opportunities at both exchanges, but their assessments differ on how much of the growth potential is already captured in their valuations.
Upside and downside are calculated using the reference share prices in the respective brokerage reports, not current market prices. Figures are rounded.
Kotak has an ‘Add’ rating on BSE with a fair value of Rs 4,000. It sees the exchange’s derivatives market-share gains, mutual-fund platform and co-location business as growth drivers, while flagging its increasing dependence on transaction charges. The brokerage has a ‘Buy’ rating on NSE with a fair value of Rs 2,200, citing its integrated platform and established position across market segments.
Bernstein has an ‘Underperform’ rating on BSE with a target price of Rs 3,180.Bernstein’s estimates put BSE’s FY27 earnings per share at Rs 86.93 and FY28 earnings per share at Rs 99.14.
Morgan Stanley has an ‘Overweight’ rating on NSE with a target price of Rs 2,315. It expects around 15% compound annual growth in transaction revenue and normalised PAT between FY27 and FY29, supported by growth in cash-market and options-premium activity.
Jefferies has a ‘Buy’ rating on NSE with a target price of Rs 2,125. The brokerage also sees potential from electronic gold receipts, commodities and mutual-fund orders, which could add to earnings over the longer term.
Jefferies estimates that NSE’s adjusted EBITDA margin could remain ahead of BSE’s through FY29, supported by its larger clearing franchise and lower costs. Its valuation is based on 35 times estimated December 2028 earnings.
The real test for BSE is whether it can turn its gains in equity options into a sustained, broader business, rather than remain dependent on a single fast-growing segment. NSE, for its part, has little reason to take its market leadership for granted, but its commanding position in cash equities and futures gives it a strong earnings base. For now, BSE is the faster-growing challenger; NSE remains the market leader. The brokerage calls suggest that the contest is becoming more interesting, but not that the balance of power has changed.