Brokerages remain bullish on National Stock Exchange (NSE) following its September quarter results, citing its dominant market position, improving cash market activity, diversification of revenue streams and potential regulatory changes as key growth drivers.
NSE reported a 23% year-on-year (YoY) rise in its Q2FY27 net profit to Rs 2,578 crore, while its revenue grew 11% YoY to Rs 4,067 crore. EBITDA more than doubled to Rs 3,079 crore, and EBITDA margin improved to 76% from 40%, YoY.
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Kotak Institutional Equities, Jefferies, B&K Securities and Emkay Global have maintained or initiated Buy ratings on the stock, with target prices ranging from Rs 2,050 to Rs 2,200.
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Kotak Institutional Equities initiated coverage on NSE with a Buy rating and a target price of Rs 2,200. The brokerage highlighted NSE's dominant position, with a 93% share in the cash equity market and nearly 65% share in index options premium turnover.
It expects cash equities, along with faster growth in data services, index licensing and colocation, to diversify revenue streams. Kotak projects mid-teen earnings growth and EBITDA margins of around 76%, while flagging derivatives regulations and technology spending as key risks.
Jefferies maintained its Buy rating and raised its target price to Rs 2,125 from Rs 2,085. Strong cash equities, commodity options and non-transaction revenues are expected to support business diversification. The brokerage also sees potential opportunities from securities lending and borrowing reforms and improving mutual fund order market share.
However, higher technology spending and transaction tax pressures remain concerns.
B&K Securities maintained its Buy rating with a target price of Rs 2,100. It expects upcoming Closing Auction Session (CAS) regulatory changes, recovering options volumes, a strong IPO pipeline and improving colocation demand to support trading activity.
The brokerage noted that NSE's options market share has stabilised around 70-72%, indicating a potential recovery in volumes.
Emkay Global also maintained its Buy rating, with a target price of Rs 2,050. It expects CAS amendments, effective December 2026, to boost cash market participation and trading volumes. The brokerage also highlighted easing EPI margins and potential securities lending reforms as growth catalysts.
NSE's proposed corporate bond index futures launch, which awaits RBI approval, could provide another revenue opportunity.
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