National Stock Exchange of India Limited Q2 FY23 Earnings Conference Call Insights

Key highlights from National Stock Exchange of India Limited (NSE) Q2 FY23 Earnings Concall

Q&A Highlights:

• [00:19:33] Mohit Kumar of DAM Capital asked about the developments NSE wants to do to build on the growth momentum in the coming years. Ashishkumar Chauhan MD replied that NSE is allowed to sell only products that are allowed by the regulator. However, NSE is continuing to explore adding new products.

• [00:21:54] Prayesh Jain with Motilal Oswal enquired about the reason for higher level of income tax rate of 31% in 2Q23 and outlook for FY23. Yatrik Vin CFO replied that the increase is due to the receipt of subsidiary dividend, which as per IT Act is not allowed. For FY23 the rate will normalize.

• [00:22:19] Prayesh Jain of Motilal Oswal asked if NSE plans to add any more indices to weekly expiry or any other products that can improvise similar volumes seen in the past. Ashishkumar Chauhan MD answered that NSE will explore what is possible and engage with the regulators on it.

• [00:27:05] Samir Palod from AUM Fund Advisors asked that given the immense profitability of the platform, if there is any move on capping or reducing pricing by govt. Ashishkumar Chauhan MD said that currently the company is not aware of any such movement.

• [00:28:19] Piran Engineer of CLSA asked about transaction cost breakup across cash and F&O trades for NSE. Yatrik Vin CFO answered that close to about 75% plus of NSE’s transaction charges comes from F&O and the remaining about 20% comes from cash equity segment and about 5% from currency and other products.

• [00:32:18] Udit Bokaria with Catamaran enquired how NSE compares its disrupted trading days vs. global peers. Ashishkumar Chauhan MD answered that on trading days, NSE is pretty much comparable to the rest of world. However, in trade timing NSE said it’s not that comparable as others trade more hours than NSE.

• [00:35:04] Sankalp Samajhdar of SBI asked if the recent news of European market barring NSE have any impact on investors. Vikram Kothari MD NSE Clearing replied that at the moment the company is not seeing any major impact. Investors are not going to be impacted, but intermediaries coming from European zone will get affected. However, the issue will get sorted out by April 30, 2023.

• [00:35:44] Sankalp Samajhdar of SBI also enquired about the recent governance issues, how things are progressing. Ashishkumar Chauhan MD replied that the issues are things of the past that happened in 2017. Currently it’s just the overhang of it.

• [00:38:56] Devesh Agarwal with IIFL Securities asked about the traction seen in SGX GIFT Connect and the potential revenue model. Ashishkumar Chauhan MD said that currently the negotiated rates of what’s happening in Singapore are now fully reported on [MCX-SX]. The new technology is tested. NSE is working with SGX, its members and others to push that market. As it happens, per transaction charges will be applies as in NSE.

• [00:50:54] Mahesh of AMBIT asked about the reason for 2Q23 standalone EPS being higher than consolidated. Ashishkumar Chauhan MD answered that the difference is mainly due to the subsidiary dividend. At the consolidated level subsidiary dividend gets locked off but in standalone it remains.

• [00:51:54] Aditya R from Kotak asked about NSE’s non-core business and its plans. Ashishkumar Chauhan MD replied that NSE has non-core businesses in talent management, cloud and IP.