NSE share price target: Macquarie sees 10% upside on 'The Dominator', rates it 'Outperform'

Macquarie has initiated coverage on National Stock Exchange Of India Ltd (NSE) with an 'Outperform' rating and a target price of Rs 1,965, implying 10 per cent potential upside over its initial public offer (IPO) issue price of Rs 1,785 apiece. Calling NSE, India's largest stock exchange, "The Dominator" due to its leading market share and market power, Macquarie said its full suite of services, technology stack and deep liquidity make NSE the lynchpin of India's financialisation.

"We initiate at Outperform with a Rs 1,965 target price. Entrenched network effects, industry-leading profitability and cash underpin our positive outlook," Macquarie said.

The foreign brokerage said NSE has room for further re-rating if new products accelerate. The stock is valued at 22 times estimated FY29 EV/Ebitda and 29.5 times estimated FY29 PE, reflecting NSE's marquee positioning in the ecosystem, Macquarie said. It added that potential traction in new products could drive a re-rating and provide upside to its estimates.

The foreign brokerage said platform expansion may drive NSE's revenues. It projected 12 per cent annualised revenue growth for NSE over FY26-30, in line with the market, driven by non-transaction revenues and new products, partly offset by modest share losses in cash equities and F&O.

"Upside could come from a higher P/N ratio, growing monthly options adoption, and stronger traction in new products," Macquarie said.

Macquarie said industry data suggests the Closing Auction Session (CAS) is weighing on trading activity as investors adapt to the new framework. "We assume near-term pressure on cash equity, derivatives and MTF volumes," it said.

The foreign brokerage said superior fundamentals justify a premium multiple. While NSE trades at a 65 per cent P/E premium to international exchanges (30 times FY29E versus 18 times), it delivers 60 per cent higher growth and returns, supported by India's structural financialisation tailwinds. "At our target price of Rs 1,965, NSE would trade at a 2.5 times PEG, broadly in line with global peers, suggesting the premium is justified on a growth-adjusted basis," Macquarie said.

Meanwhile, Apurva Sheth, Head of Market Perspectives and Research at SAMCO Securities, said NSE shares may list at a premium of around Rs 50 to Rs 80, depending on market conditions.

Over the coming weeks and months, mutual funds, insurance companies, pension funds and overseas investors could create a steady source of institutional demand, Sheth said, while advising investors not to sell NSE shares on listing day unless they bought them solely for listing gains. Long-term investors should opt for staggered buying, he said.