BSE rises 4% as Motilal Oswal upgrades stock to 'Buy', sees up to 24% upside

We expect FY27 ADTO of Rs 216 lakh crore (+16% YoY), with upside potential if the recovery sustains," said MOFSL. "While BSE has achieved a 30%+ market share in premium turnover, further market-share expansion remains possible. The premium-to-notional ratio has already climbed to 14 bps from 6–7 bps in 2023–24, against 20 bps for NSE. Further convergence, driven by institutional participation and longer-dated contracts, can deliver meaningful earnings upside over and above volume growth," the domestic brokerage further said.

At 10:30 am on October 26, BSE shares were trading 4% lower at Rs 3,364.1 apiece. Cash market share has improved from 7% to 9%, while NSE’s listing and the opening of its lock-in in March 2027 offer a further catalyst for turnover. Improving smart-order routing and platform participation strengthen the case for a sustained step-up in cash-market activity with the FY26-28 ADTO CAGR expected at 30%, it said.

"We raise our revenue and PAT estimates by 8%/10% and 10%/12%, respectively, for FY27/FY28, supported by the strong volume run-rate, the likely benefit of the CAS reversal and the benefit of NSE listing on cash volumes. A sustained volume recovery combined with an improving premium-to-notional (P/N) ratio could drive a further 20% increase in FY28E PAT," said the brokerage. "BSE’s EBITDA margin expanded to 65%+ in FY26 from 9% in FY21, demonstrating the scalability of its model.

With margins expected to reach 70%, we forecast a 27% FY26-28 PAT CAGR on a 23% revenue CAGR. The variable nature of regulatory costs (55% of opex) provides a degree of insulation against volume slowdowns," said MOFS.