BSE Ltd. is likely to see a decline in its volume and profitability after its expiry day is moved to Thursday, according to analysts. Most brokerages have trimmed the earning-per-sharing estimates for India's oldest stock exchange.
The Securities and Exchange Board of India granted the National Stock Exchange Tuesday as its stock derivatives expiry day, which left BSE with Thursday. This will come into effect in September.
BSE currently gets three trading days, while the National Stock Exchange gets two trading days, UBS Global Research said. When this reverses from September, it will cause a 10–15% impact on volume, possibly eating into BSE's profitability by 5–6%.
In case BSE is able to build liquidity in long-term contracts and implement a common contract, the impact will minimise, according Jefferies.
Find out below what brokerages said about BSE's expiry day shift.
Jefferies
Maintained 'hold' with a target price of Rs 2,900.
Expiry day shift may slightly impact volumes. There is scope to mitigate impact.
Interaction with market participants indicates 5-10% impact on volumes in the near-term and build-up thereafter.
BSE's ability to build liquidity in longer-term contracts could offset this impact.
Implementation of common contract note could aid market share in the cash segment.
EPS estimate trimmed by 1-2% to factor slightly lower volumes.
UBS
Maintained 'buy' with target price of Rs 2,633.
New expiry day could impact BSE's market share gain momentum.
Change in expiry could mathematically impact 15% of volumes on loss of one trading day for BSE.
Expects gain in volumes on non-expiry day for BSE, negating some loss of volumes due to change in expiry day.
Goldman Sachs
Maintained 'neutral' with cut in target price to Rs 2,430 from Rs 2,490.
As a result of expiry day being moved to Thursday, BSE could lose 3 percentage points of market share.
BSE’s FY26 EPS cut by 2%, but FY27/28 EPS estimates are largely unchanged.
Risk-reward seems balanced.
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