BSE Limited — Q4 FY25 earnings call

Call held 6 May 2025

Management summary

BSE Limited reported its strongest financial year in its 150-year history for FY25, with consolidated revenues surging 103% to ₹3,236 crores and net profit growing 70% to ₹1,326 crores. This growth was driven by strong performance in transaction-related income and BSE Star MF. The company announced a total dividend of ₹23 per share, reflecting its robust performance, while acknowledging near-term market challenges from geopolitical and economic factors.

Highlights

  • BSE recorded its strongest year yet in its 150-year history with record revenues of Rs. 3,236 crores on a consolidated basis, an increase of 103% against the previous year.

  • The net profit attributable to shareholders of the Company stands at Rs. 1,326 crores up from Rs. 778 crores, a growth of 70%.

  • Excluding contribution to core SGF, the EBITDA stands at Rs. 1,590 crores with a margin of 54%.

  • BSE Star MF delivered yet another quarter of record revenues and performance of 80% year on year to reach Rs. 230.70 crores.

  • The total number of transactions processed by BSE Star MF grew by 61% to reach 66.3 crores transaction in FY '25 from 41.1 crores in the previous year.

Concerns

  • In the near term, the market, however, faces challenges due to geopolitical situation and economic challenges intensified by global trade tensions and tariffs.

  • Looking forward, while there could be some moderation of macro tailwinds in the near term, we are focused on growing our businesses and remain optimistic about our medium-term outlook.

  • Common contract note is one such measure, and it was proposed by the regulators, it must have gone live by 1st of May, that is 30th of April. Since some part of the market participants, notwithstanding that it has been postponed 4 times, still expressed that they would like to do some further testing to check their readiness.

Key financials

2 periods

Headline

  • Consolidated Revenue
    ₹3,236 Cr
    YoY +103%
  • Operational Revenue
    ₹2,957 Cr
    YoY +116%
  • Net Profit (Attributable to Shareholders)
    ₹1,326 Cr
    YoY +70%
  • EBITDA (Excluding SGF)
    ₹1,590 Cr
  • EBITDA Margin (Excluding SGF)
    54%
  • BSE Star MF Revenue
    ₹230.7 Cr
    YoY +80%
  • BSE Star MF Transactions
    ₹66.3 Cr
    YoY +61%

Q4 FY25

  • Net Reversal of SGF Provision
    ₹109 Cr
  • Contribution to NCL
    ₹37.6 Cr

What they filed

Q1 FY27: revenue up 63.5%, net profit up 62.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue813 768 847 958 1,068 +31%1,244 +62%1,564 +85%1,566 +63%
EBITDA456 236 484 625 680 +49%732 +210%1,041 +115%1,046 +67%
Net profit346 219 494 538 557 +61%597 +173%795 +61%873 +62%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Dividend ₹23/share (final) Payout ratio 28.4%
    The Board of Directors of BSE Limited has recommended a special dividend of Rs. 5 in celebration of the 150th anniversary of BSE, and a normal dividend of Rs. 18 resulting in a final dividend of Rs. 23 per equity share having a face value of Rs. 2 for the FY '25 subject to the approval of the shareholders in the ensuing Annual General Meeting. The total payout with a dividend payout ratio of 28.4% of the current year profits would be Rs. 316 crores on a stand-alone basis.
  • M&A BSE Institute Divestment · Signed · Consideration ₹[object Object] (cash)

    As part of our strategic vision to concentrate on our core operations

    As part of our strategic vision to concentrate on our core operations, BSE signed a share purchase agreement to sell its 100% stake in BSE Institute for a consideration of Rs. 16.9 crores to FinX.
  • M&A Asia Index Pvt. Ltd. (AIPL) Acquisition · Closed

    strategic initiatives from acquisition of S&P Dow Jones 50% stake in AIPL

    We also hit the ground running in FY 2025 in terms of strategic initiatives from acquisition of S&P Dow Jones 50% stake in AIPL

Guidance & targets

Co-location Capacity

  • Additional Racks Co-location Capacity · FY26 · High confidence 200 racks
    we are in the process of implementation of adding 200 more racks in 2 separate tranches. The first tranche should happen in another 3- or 4-months' time and the next tranche should get completed before the completion of this financial year.

    — Sundararaman R

  • Total Racks (equivalent) Co-location Capacity · FY26 · Medium confidence ~650 racks
    We feel at this point of time, this is a good number, that is around 500 racks with a mix of 15 kVA and 6 kVA, probably giving an equivalence of around 650 racks is a good number to aspire for, given the number of products we have as a profile with us.

    — Sundararaman R

Regulatory

  • Common Contract Note Implementation Regulatory · Coming months · High confidence Go live
    We are very confident and sure that in the coming months that those testing's will be completed, and the common contract note will go live.

    — Sundararaman R

SGF Management

  • Periodic Contribution Mechanism SGF Management · Ongoing effort · Medium confidence Find a mechanism
    Nevertheless, our thought processes are on this, and in case we are able to find a mechanism where we periodically provide instead of on requirement ad hoc we do not provide, it will be helpful.

    — Sundararaman R

Market Outlook

  • Medium-term outlook Market Outlook · Medium-term · Medium confidence Optimistic
    Looking forward, while there could be some moderation of macro tailwinds in the near term, we are focused on growing our businesses and remain optimistic about our medium-term outlook.

    — Sundararaman R

What to watch in Q1 FY26

Common Contract Note Implementation

Coming months
Current Postponed 4 times, awaiting further testing
Target Go live

Why it matters

Essential for reducing concentration risk and benefiting investors, expected to increase market participation and liquidity.

We are very confident and sure that in the coming months that those testing's will be completed, and the common contract note will go live.

Risks & concerns

  • Geopolitical and Economic Challenges

    medium

    Market faces challenges due to geopolitical situation and economic challenges intensified by global trade tensions and tariffs.

    Management acknowledged

  • Moderation of Macro Tailwinds

    medium

    Expectation of some moderation of macro tailwinds in the near term.

    Management acknowledged

  • Regulatory Uncertainty (Gross Trading Limits, Clearing Corp Separation, Delta-based Exposure Norms)

    medium

    Pending regulatory decisions on market structure and exposure norms could impact operations, with management awaiting final views.

    Both acknowledged, waiting for outcome

  • SGF Contribution Volatility and Predictability

    medium

    The complex algorithm for SGF contributions leads to ad hoc demands, and management is working on a periodic contribution mechanism.

    Both acknowledged, working on solution

  • Broker Support and Pricing for BSE Options

    medium

    Many brokers have not onboarded BSE terminals for options, and some charge significantly higher fees for BSE options compared to competitors, hindering volume growth.

    Analyst acknowledged, will investigate

  • Common Contract Note Implementation Delays

    low

    Common contract note implementation has been postponed multiple times due to market participant testing, but management is confident it will go live soon.

    Analyst acknowledged, confident of resolution

Q&A highlights

1 direct, 3 evasive
Regulatory Developments (Gross Trading Limits, Clearing Corp Separation, Common Contract Note) Partial
As far as your questions are concerned, as you may recall, which I always tell, regulation in India is an evolving setup, and clearly created in a co-creation manner in a consultative basis. In respect of the limits that you talked about, and the segregation of clearing cooperation into an independent entity, as you would know, there are consultation papers for which the markets have given their feedback... So at this point of time, we have to wait and see how the regulation is going to evolve in respect of the first 2 points.

Analyst asks about critical pending regulatory changes that could impact BSE's operations, but management defers specific answers on the first two points, citing ongoing consultation.

Asked by Devesh Agarwal

HFT Volume & Co-location Trading Mix Evasive
We don't go by that type of classification. What we track as numbers are how many members we have in the system? How many foreign participants we have been able to increase? How many more racks we have been able to provide? How much of our rack space is being efficiently utilized?

Analyst asks for specific data on HFT contribution to trading volumes, but management states they don't track it by that classification, focusing instead on broader market participation metrics.

Asked by Amit Chandra

Co-location Rack Expansion and Per Order Rate Charging Direct
We are in the process of implementation of adding 200 more racks in 2 separate tranches. The first tranche should happen in another 3- or 4-months' time and the next tranche should get completed before the completion of this financial year... at this point of time, we have not been meaningfully charging anything for per order rate. We wanted to enhance the capacity in such a fashion that we could make some meaningful difference by having different throttle rates.

Analyst seeks clarity on future co-location capacity and a new revenue stream (per order rate), receiving specific plans for expansion and an explanation for the delay in charging.

Asked by Prayesh Jain

Settlement Fees / Cost per Contract Discrepancy Evasive
Honestly, I am not able to relate to the numbers that you have told. May I request you to do the math again and offline connect with us. I can explain you what our experience and understanding is. Our idea is that it generally remains somewhere around Rs. 0.10 per contract.

Analyst identifies a significant increase in Q4 settlement fees per contract, but management cannot reconcile the numbers and suggests an offline discussion, indicating a lack of immediate clarity.

Asked by Sanketh Godha

SGF Contribution Recurrence & C&S Charges Discrepancy Partial
The question you have asked is, is it to be taken as the number to be projected for the future? How do we understand this? What is the relationship with which we should take this? Is there a method probably of forecasting? This is what you had in your mind. As I always have told, it is a complex algorithm based on which the amount of SGF gets worked out... [CFO] So you are right. Normally, on a consolidated basis, the C&S (clearing and settlement) expenditure should be lower than standalone. It could be because of the elimination of provisions. As we explained earlier, we are not able to relate to these numbers at this point in time. Maybe we can connect offline, and we will explain it to you.

Analyst raises two complex financial questions regarding SGF predictability and a discrepancy in C&S charges, both of which management struggles to fully address on the call, deferring the latter to an offline discussion.

Asked by Madhukar Ladha

Broker Onboarding and Pricing for BSE Options Partial
I am telling you, sir, like for JM Finance, NFO is only Rs.5, but for the BSE, they are Rs.20. In Shoonya, they didn't even activate yet. Although, as I mentioned, sir, it needs intervention. Your team is not able to do it, sir. Please do something from your end, sir. [Sundararaman R] Sure. Thank you for the suggestion. Point noted. We will analyze and look into whether there are any major brokers who are not yet providing, and we will talk to them if they are overcharging.

Analyst highlights a critical barrier to increasing BSE's options volumes – lack of broker support and unfavorable pricing compared to competitors, prompting management to commit to direct intervention.

Asked by Marcel

Impact of Delta-based Exposure Norms Evasive
As I mentioned very clearly and very elaborately in the answer to my first question, it is at the consultation stage, regulations in our country are co-created on a consultation basis... So at this point of time it will not be fair on our side to imagine anything and speculate and say that this is what is going to be implemented.

Analyst asks about the potential impact of a significant regulatory proposal, but management declines to speculate, emphasizing the consultation phase and waiting for the final regulatory view.

Asked by Deepak Ajmera

3 min read 7 chapters

Detailed narrative

Record Financial Performance in FY25

BSE achieved its strongest financial year in its 150-year history, reporting record consolidated revenues of ₹3,236 crores, a 103% increase year-over-year. Operational revenues also saw a significant jump of 116% to ₹2,957 crores. The net profit attributable to shareholders grew 70% to ₹1,326 crores, with EBITDA (excluding core SGF contribution) reaching ₹1,590 crores at a 54% margin. This robust performance was primarily driven by strong transaction-related income and growth in other operating revenues.

Strategic Milestones and Market Development

FY25 marked BSE's 150th Foundation Day, celebrated with the unveiling of a commemorative coin, a new logo, and the BSE 150 Index. The company continued its focus on market development, conducting 14,000 investor awareness programs and welcoming 81 new listings that raised a record ₹1.82 lakh crores, up 194% from the previous year. Strategic initiatives included the acquisition of S&P Dow Jones' 50% stake in Asia Index Pvt. Ltd. and the divestment of BSE Institute for ₹16.9 crores to FinX.

Derivatives Market and Co-location Expansion

The Sensex derivatives product demonstrated strong growth, expanding the client base and increasing non-expiry day activities. The average daily premium turnover for BSE Index Derivatives reached a record ₹11,782 crores for the quarter. To support this growth, BSE is expanding its co-location facilities, currently at approximately 300 racks, with plans to add another 200 racks in two tranches, aiming for an equivalent of around 650 racks by the end of the financial year.

BSE Star MF's Continued Growth Momentum

BSE Star MF maintained its strong growth trajectory, delivering record revenues of ₹230.70 crores, an 80% increase year-over-year. The platform processed a total of 66.3 crore transactions in FY25, marking a 61% growth from the previous year's 41.1 crores. On average, the platform handled 5.52 crore transactions per month, peaking at 6.24 crore transactions in January 2025, underscoring its increasing adoption in mutual fund distribution.

Regulatory Landscape and Outlook

Management addressed several regulatory developments, noting that discussions on gross trading limits and clearing corporation separation are in a consultative phase, with outcomes pending. The common contract note, though postponed four times, is expected to go live in the coming months after final testing. BSE is also actively working on developing a more predictable, periodic mechanism for Safety Net Fund (SGF) contributions to replace the current ad hoc system.

Capital Allocation and Shareholder Returns

For FY25, BSE's Board recommended a total final dividend of ₹23 per equity share, comprising a special dividend of ₹5 and a normal dividend of ₹18, resulting in a total payout of ₹316 crores on a standalone basis, representing a 28.4% payout ratio. Management emphasized a commitment to increasing dividends while simultaneously investing in infrastructure (over ₹500 crores in technology and related aspects) and building a strong balance sheet to instill confidence in its clearing corporation.

Market Dynamics and Future Strategy

Despite India's capital markets experiencing mixed performance and volatility, BSE's benchmark index, SENSEX, grew 3.02% since the beginning of 2025. While acknowledging potential moderation of macro tailwinds in the near term, the company remains optimistic about its medium-term outlook. BSE plans to continue leveraging its Sensex brand, expanding connectivity, and enhancing its channels, platforms, and products to capture future growth opportunities.

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