NSE EBITDA Margins: Explaining 66.85% Versus 76.23%

NSE reported an operating EBITDA margin of 66.85% and a normalised operating EBITDA margin of 76.23% for FY2026. The 9.38 percentage-point gap reflects adjustments for SEBI settlement fees and the impact of new labour codes, according to its September 10, 2026 red herring prospectus.

Both figures describe the same financial year, but they answer different questions. Operating EBITDA retains these disclosed costs, while the normalised measure adjusts for them. Reading only the higher number would leave out expenses recognised in the period; reading only the lower number would omit management's explanation of their effect.

How does NSE calculate operating EBITDA?

EBITDA stands for earnings before interest, tax, depreciation and amortisation. NSE provides specific definitions and reconciliations for its own EBITDA measures on pages 418–420 of the RHP.

Its operating EBITDA calculation starts with profit from continuing operations, adds tax and depreciation and amortisation, and removes other income, the share of associates' profits and gains on sales of investments in associates.

This is important because income from investments and associate disposals can influence consolidated profit without representing revenue from operating the exchange. NSE's operating measure seeks to separate those items using its stated methodology.

The margin is operating EBITDA divided by revenue from operations. It is not the same as a profit-after-tax margin or the percentage of cash retained from each rupee collected.

What explains the FY2026 normalisation adjustment?

NSE's operating EBITDA was ₹11,097.90 crore in FY2026. Normalised operating EBITDA was ₹12,655.90 crore, a difference of ₹1,558.00 crore after rounding.

The settlement expense in this reconciliation is an accounting-period figure. It should not be equated automatically with the total amount attached to a particular settlement or the cash paid on a later date.

The adjustment also does not erase the economic effect of the costs. It supplies another view of performance that readers can compare with the unadjusted operating measure and the financial statements.

Did NSE's normalised margin also decline?

Yes. The normalised operating EBITDA margin fell from 77.69% in FY2025 to 76.23% in FY2026. The operating EBITDA margin fell from 73.78% to 66.85% over the same period.

The smaller decline in the normalised measure shows that the disclosed adjustments explain a significant part of the difference between the two annual margin movements. They do not explain away all of the reduction in profitability on this basis.

Normalised operating EBITDA also declined in rupee terms, from ₹13,317.07 crore in FY2025 to ₹12,655.90 crore in FY2026. This distinction prevents a high percentage margin from being mistaken for growth in the absolute earnings measure.

Why was the June normalised margin lower?

In the quarter ended June 30, 2026, NSE's operating EBITDA margin was 78.81%, while its normalised margin was 77.75%. The normalised figure was lower because the reconciliation removed the benefit of a ₹48.32 crore labour-code-related reversal.

Operating EBITDA for the quarter was ₹3,594.25 crore, compared with normalised operating EBITDA of ₹3,545.93 crore. The adjustment therefore worked in the opposite direction to the FY2026 annual adjustment.

This example is useful because it demonstrates that normalisation need not always increase earnings. Under NSE's disclosed methodology, the treatment depends on whether the relevant item increased or reduced the starting measure.

How should the two margin measures be read?

The RHP identifies these measures as non-GAAP, meaning they supplement financial measures prepared under the applicable accounting standards. It also notes that definitions may differ between companies, limiting direct comparisons.

A meaningful comparison consequently requires consistent periods, denominators and adjustment policies. NSE's 76.23% FY2026 normalised margin describes profitability after specified adjustments. Its 66.85% operating margin preserves the effect of those costs. Together with the reconciliation, the two figures explain the year's performance more fully than either percentage alone.