Global brokerage UBS raised its target price on BSE to Rs 3,650 and maintained a ‘Buy’ rating, citing continued market share gains and strong revenue growth in the December quarter, despite profits missing estimates due to higher costs. The upgrade comes as BSE’s options premium average daily turnover (ADTO) remained robust in Q3FY26, cementing its dominance in the derivatives segment.
Domestic brokerage Nuvama was even more bullish, raising its target price to Rs 3,760. The firm also lifted its FY26-28 earnings estimates by 8.2% to 21.9%, citing “continued strong volumes” and factoring in a 15% stake valuation in CDSL at a price-to-earnings multiple of 45x.
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Management shrugs off STT impact
BSE’s management struck an optimistic tone on the recent increase in Securities Transaction Tax (STT) rates, telling analysts the move would have a “minimal impact on options volumes, consistent with past trends,” although some impact on futures volumes is expected. The exchange is also working to improve liquidity in longer-dated contracts by increasing market participation.
Management further expressed confidence that smart order routing will eventually gain wider market acceptance for enhancing price discovery, despite current adoption challenges, even after the implementation of the common contract note.
Also Read: Should high-risk investors bet on Fractal Analytics IPO?Global brokerage Jefferies maintained its ‘Hold’ rating on BSE, with a target price of Rs 3,050, implying 30x March 2028 estimated earnings. The brokerage raised its FY26–28 EPS estimates by 4–7% after pulling forward SENSEX market share gains, while keeping post-FY29 estimates unchanged.
“We maintain our HOLD rating considering: (i) over-reliance on SENSEX weekly options, (ii) long-term growth challenges, (iii) regulatory risks, and (iv) increasing competition in co-location racks,” Jefferies said.
BSE’s December 2025 profit after tax of Rs 602 crore came in 5% above Jefferies’ estimates and in line with consensus, driven by a 5% higher topline and marginally better operating expenses, excluding core settlement guarantee fund costs, after adjusting for one-off labour code changes.
“While market share gains remain a key short-term growth driver, lack of clarity on new products could become a growth challenge post FY29E. Hence, we maintain our HOLD rating,” Jefferies cautioned.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)