BSE share price rally after Q2 results, Analysts flag valuation concerns; check fresh targets & more

Shares of BSE Ltd jumped nearly 6 per cent during the trading session on Thursday following its quarterly earnings. However, despite this rally, the stock is down 15 per cent from its all-time high. Analysts remain divided on the counter, as some are cautious about its rich valuations, limited market-share gains and unsustainable growth. Others, however, remain positive on margin performance and growth momentum.

Shares of BSE Ltd jumped 5.75 per cent to Rs 3,842 on Thursday, commanding a market capitalisation of Rs 1.56 lakh crore. Despite this rise, the stock is down nearly 15 per cent from its peak of Rs 4,446.80, hit on May 27, 2026. To recall, shares of BSE have soared nearly 2,400 per cent in the last five years, while they are up 55 per cent in the last one year.

BSE reported a net profit of Rs 808.15 crore, up 44.9 per cent on a year-on-year (YoY) basis, while revenue from operations jumped 34.1 per cent YoY to Rs 1,432.6 crore in the September 2026 quarter. Its EBITDA improved 42.4 per cent YoY to Rs 984 crore, while margins improved to 68.7 per cent during the reported quarter.

"A modest beat does not change our cautious view. EBITDA was ahead of estimates. While a higher options ADTO drives a 3-4 per cent upgrade to FY28-29E EPS, we believe options growth is unlikely to sustain in FY28-29E as share gains get harder. Cash equity market share was also below management's double-digit target," said Jefferies.

Jefferies maintained an 'underperform' rating, citing the risk of growth slowing in FY28E as market-share gains become increasingly difficult, the risk of the 20 per cent premium to NSE not being sustained, and the management transition expected by June 2027. "Our FY28-29E EPS increases by 3-4 per cent as we factor in higher VIX-led ADTO in FY27E," it added, with a price target of Rs 3,100.

BSE witnessed a sequential dip in financial performance during the quarter due to the CAS-related impact on volumes. However, October 2026 volumes have surged, supported by market volatility. With the partial reversal of CAS effective from December 2026, derivatives activity should normalise faster, supporting top-line growth and, in turn, margin expansion through operating leverage, said Motilal Oswal Financial Services Ltd.

"We expect BSE to witness a strong recovery in volume growth, aided by rising member participation and an improving P/N ratio. An improved growth trajectory in the cash segment, robust demand for co-location, and the strong positioning of the Star MF platform will also contribute to the company's performance. We reiterate our 'buy' rating on the stock with a target price of Rs 4,200," it said.

"We tweak our FY27 operating revenue estimates, factoring in a recovery in volumes following the CAS revision, while the overhang of bank guarantee norms still persists. We expect operating expenses to remain elevated due to continued investments in technology infrastructure and higher clearing and settlement costs linked to rising volumes, which are likely to weigh on EBITDA margins," said PL Capital, maintaining a 'buy' rating with a target price of Rs 4,015.

SEBI has decoupled expiry settlement from the auction, restoring the last 30-minute VWAP for index and stock derivatives and removing a key overhang. October volumes are already above pre-CAS levels, aided by volatility, and we expect volumes to hold up even as the P/N ratio normalises once the new CAS rules take effect in December 2026, said HDFC Securities.

"We estimate options premium market share of 32 per cent/32 per cent/33 per cent in FY27/28/29E, versus 25 per cent in FY26. We raise our FY27/28/29E EPS estimates by 6.6 per cent/5.4 per cent/5.3 per cent and project an FY26-29E EPS CAGR of 23.3 per cent," it added, maintaining an 'add' rating with a revised target price of Rs 4,180.