BSE’s Q1 profit doubles. Here’s what’s driving it.

If you stand outside Dalal Street today, you’ll still see that iconic building with its curved façade,  a symbol of India’s financial markets for a century and a half. But behind that heritage is a company that’s been quietly reinventing itself. 

BSE Limited, once known only for stock trading, is now a multi-segment, tech-driven platform moving everything from equity derivatives to mutual funds, commodities, and even global trades through its International Exchange.

Q1 FY26 is a continuation of this transformation story. And for the quarter ending June 2025, the numbers tell us the exchange isn’t just coasting on history, it’s running in top gear. Revenue from operations rose to ₹9,584 million, up sharply from ₹6,019 million in the same quarter last year. Net profit jumped to ₹5,381 million from ₹2,643 million, giving it a net margin of 50%. Even EBITDA margins stayed strong at 65% despite a busier, more complex operation.

A lot of that muscle came from where BSE has been leaning hard: equity derivatives. This segment clocked an average daily notional turnover of ₹7.9 trillion in Q1 FY26, up from ₹4.4 trillion a year ago. Transaction charges from equity cash were a steady ₹755 million, while the derivatives premium turnover more than doubled year-on-year to ₹1.51 trillion. The mutual fund distribution arm, StAR MF, remained a crown jewel; processing 183 million orders this quarter and bringing in ₹612 million in revenue, even though that’s lower than last year’s peak as industry flows moderated.

What’s striking is that BSE is no longer just “the trading floor.” Subsidiaries like ICCL handle clearing with AAA ratings and a 90% market share in mutual fund settlements, while BSE Index Services has turned the Sensex legacy into a 170+ index powerhouse. India INX is letting investors trade over 30,000 global stocks, and the exchange’s corporate services unit pulled in ₹1,054 million from listings and IPO book-building in Q1.

Of course, the business isn’t without challenges. Market-linked revenues like transaction charges and treasury income still make BSE sensitive to volatility. The derivatives boom has been a blessing, but sustaining that pace depends on liquidity, regulatory stances, and competition. The mutual fund platform, though dominant, saw a year-on-year revenue drop, signalling that industry-wide slowdowns can show up in the books. And while data licensing is a high-margin opportunity in global markets, in India it still contributes a small slice of revenue compared to developed exchanges.

Looking ahead, the next few quarters will be about execution on multiple fronts, growing its market share in high-turnover segments, scaling premium offerings like StAR MF Plus, pushing new product launches in derivatives, and expanding the international business at India INX. The management is also eyeing more corporate service innovations, a larger share of fundraising activity, and possibly, better monetisation of its vast data ecosystem.

If there’s one takeaway from Q1 FY26, it’s that BSE isn’t playing the nostalgia card. It’s modernising aggressively, diversifying revenue streams, and finding ways to turn volume growth into high-margin profits. For a 150-year-old market institution, that’s not just survival;  that’s reinvention in motion.

FAQs

What was BSE’s net profit in Q1 FY26?

BSE Limited reported a net profit of ₹5,381 million in Q1 FY26, more than double the ₹2,643 million earned in the same quarter last year. This translated into a strong net margin of 50%.

How much did BSE’s revenue grow in Q1 FY26?

Revenue from operations rose to ₹9,584 million in Q1 FY26, compared to ₹6,019 million in Q1 FY25. The growth was driven mainly by surging equity derivatives turnover and steady income from its mutual fund platform.

What is driving BSE’s profit growth?

The main drivers were a sharp rise in equity derivatives turnover, steady transaction charges from the equity cash segment, and strong contributions from corporate services, clearing operations, and its mutual fund platform.

How did BSE’s equity derivatives segment perform in Q1 FY26?

The equity derivatives segment saw an average daily notional turnover of ₹7.9 trillion, up from ₹4.4 trillion a year earlier. The derivatives premium turnover more than doubled year-on-year to ₹1.51 trillion.

What is BSE StAR MF and how did it perform this quarter?

BSE StAR MF is the exchange’s mutual fund distribution platform. It processed 183 million orders in Q1 FY26 and generated ₹612 million in revenue, though this was lower than last year due to slower industry flows.

What other businesses contribute to BSE’s revenue?

Apart from trading, BSE earns from clearing services via ICCL, index licensing through BSE Index Services, global trading via India INX, and corporate services like listings and IPO book-building.

What challenges does BSE face despite strong profits?

BSE remains sensitive to market volatility, as a large portion of its income is market-linked. The derivatives boom may be hard to sustain, and mutual fund revenues can be affected by broader industry slowdowns.

How is BSE modernising its operations?

BSE is expanding into high-turnover segments, launching new derivatives products, scaling premium offerings like StAR MF Plus, growing its global trading platform, and monetising its data ecosystem.

What role does ICCL play in BSE’s business model?

ICCL, BSE’s clearing arm, manages settlement operations, holds AAA ratings, and commands a 90% market share in mutual fund settlements, providing stable and recurring income.

What is the outlook for BSE in the coming quarters?

BSE aims to grow market share in derivatives, expand premium mutual fund services, launch more products, and strengthen its international business. It also plans to enhance corporate services and improve data monetisation.