The leader in equity exchanges, the National Stock Exchange (NSE), reported a rise of 19.05 per cent in its net profit for the financial year 2009-2010.
The exchange’s total income during 2009-2010 rose 23.6 per cent to Rs 1,266.4 crore from the previous year’s Rs 1,024.3 crore. Total expense rose 31.5 per cent to Rs 454.9 crore from the previous year’s Rs 345.8 crore.
The profit of NSCCL, NSE’s clearing and settlement arm, fell 4.7 per cent to Rs 226 crore, against the previous year’s Rs 237.1 crore.
Net profits of NSE’s rival, Bombay Stock Exchange, was Rs 212.9 crore for March on a total income of Rs 485.2 crore.
NSE’s profit from transaction charges (majority from equity cash and derivatives) was Rs 768.4 crore for the year. The cost of transaction in NSE’s equity cash segment is Rs 3.25 per Rs 1 lakh and Rs 1.75-1.90 per Rs 1 lakh in the futures and option segment. The exchange had cut charges in the F&O segment by 10 per cent last year for the first time since 2001.
However, earnings before interest, taxes, depreciation and amortisation (Ebitda) margins, which show profitability at the operating level, fell to 70 per cent in 2010, compared to 73 per cent in 2009. While revenues rose 23.6 per cent this year, operating costs rose 31.5 per cent. Operating, administration and other expenses rose 36.7 per cent to Rs 229.50 crore from the previous year’s Rs 167.9 crore.
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Ebitda in 2010 was Rs 883.2 crore, compared to the previous year’s Rs 748.1 crore. Among other expenses, NSE paid or made a provision of Rs 52.7 crore for employees in 2010 against Rs 47 crore in 2009. It paid a tax of Rs 197.7 crore against Rs 162.8 crore last year.
Rs 1 lakh crore daily in F&O
Earnings per share of the exchange was Rs 136.39 against Rs 114.57 in 2009. The exchange is among the 100 most profitable companies in India. On an average, NSE's daily turnover in cash equity has been Rs 15,000-16,000 crore. In the futures and option segment, it generated Rs 80,000-1,00,000 crore daily.
Apart from equity cash and derivatives, NSE also operates in interest rate futures, currency derivatives, mutual fund segment and wholesale and retail debt market. In the currency segment, the exchange does not charge any trading fees, as the segment is relatively new.
London Stock Exchange had reported a net profit of $144.3 million for the year 2009-2010, while NSE’s current profit is $136 million. Among other global players, the profit of Chicago Mercantile Exchange (CME), the derivatives leader with whom NSE has teamed, was $ 825.80 million for the year 2009. Of other top US exchanges in the space, the Nasdaq OMX Group had reported net profit of $266 million and NYSE Euronext had reported a net of $219 million in 2009. For US exchanges, the financial year is from January to December.