'Benefit of NSE listing': BSE shares jump 4% as MOFSL upgrades stock to Buy, raises target -
BSE's cash market share improved from 7 per cent to 9 per cent, with NSE's listing and the March 2027 lock-in expiry providing further catalysts, MOFSL said.
BSE Ltd shares rallied 4 per cent in Monday's trade as MOFSL upgraded the stock to 'Buy', citing a strong volume run-rate, the likely benefit of the Closing Auction Session (CAS) reversal and higher cash volumes following NSE's listing. The domestic brokerage suggested 'Buy' on the stock from 'Neutral' earlier, with a revised target of Rs 4,000 from Rs 3,480 earlier.
On Monday, the stock rose 4.27 per cent to hit a high of Rs 3,369 apiece on NSE. MOFSL said every incremental rupee of BSE revenue has the potential to deliver healthy profit growth, adding that the variable nature of regulatory costs, which account for 55 per cent of operating expenses, provides a degree of insulation against volume slowdowns.
The domestic brokerage said BSE's cash market share improved from 7 per cent to 9 per cent, with NSE's listing and the March 2027 lock-in expiry providing further catalysts. BSE's cash average daily turnover (ADTO) is expected to grow at a 30 per cent CAGR over FY26-FY28.
"Star MF and co-location add scalable, diversified earnings streams," it said.
MOFSL said that since BSE relaunched derivatives in 2023, the impact of most regulatory changes, including F&O 2.0 and the change in weekly expiry day, has been transient. BSE achieved 50 per cent market share in index options notional turnover within three years of the relaunch, while volumes continued to show strong momentum, MOFSL said.
"However, the recent regulatory changes, stricter lending norms for proprietary traders (effective July 2026) and CAS implementation (August 2026), led to a reset in the volume base, with BSE's notional F&O ADTO falling 35 per cent in August 2026 compared with the April-July 2026 average," it said.
Following the base reset in August, September witnessed a modest recovery, with ADTO growing 6 per cent month-on-month (MoM). However, aided by volatile markets, October has seen a significant spurt in volumes, with ADTO up 49 per cent MoM as of October 20, MOFSL said.
"We raise our revenue and PAT estimates by 8 per cent/10 per cent and 10 per cent/12 per cent, respectively, for FY27/FY28. A sustained volume recovery combined with an improving premium-to-notional (P/N) ratio could drive a further 20 per cent increase in FY28E PAT. We upgrade the stock to Buy with a target price of Rs 4,000," MOFSL said.
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