NSE stock gets thumbs up from Street; here's highest share price target

National Stock Exchange of India Ltd (NSE) shares received thumbs up from a handful of brokerages, as the stock received 'Buy' or 'Accumulate' from at least four brokerages on the listing day, with targets suggesting up to 22 per cent potential upside over the IPO issue price.

The highest target on NSE was set by Asian Markets Securities, which valued India's largest stock exchange at 40 times estimated FY28 earnings per share of Rs 54, arriving at a target Rs 2,170 apiece. The target suggests 22 per cent potential upside.

"In our view, the loss of market share in index options is largely behind NSE, and we expect the company to grow broadly in line with the industry going forward. Ebitda margins remain strong relative to peers, even as the company continues to invest in technology, which remains a key business enabler from both growth and risk-management perspectives," it said.

Calling NSE "The Dominator" due to its leading market share and market power, foreign brokerage Macquarie said its full suite of services, technology stack and deep liquidity make NSE the lynchpin of India's financialisation. This brokerage suggested a target price of Rs 1,785 on NSE. The target was breached as NSE hit a high of Rs 1,878 on BSE earlier today.

Emkay Global suggested a 'Buy' and a target of Rs 2,250 on BSE. This brokerage said NSE has delivered 24 per cent revenue and 26 per cent PAT growth compounded annually over FY21-26, driven by strong growth in the derivatives segment.

"We expect NSE to clock 12 per cent revenue CAGR over FY27-29E, translating to 13 per cent Ebitda and PAT CAGR. As India’s premier market infra institution, NSE commands a leadership position in the structural financialization of savings. We initiate coverage with BUY and Sep-27E target of Rs 2,050, implying Sep-28E PER of 38 times," Emkay said.

PL Capital initiated coverage on the stock with ‘Accumulate’ rating and a target of Rs 1,950. It expects NSE's valuations to sustain at these levels, supported by structural factors such as near-dominance in key segments with high entry barriers; healthy profit growth; and optionality from new derivative products/ colocation revenue.