The inventory’s upmove was additional supported by sturdy derivatives exercise and a resilient market share. IIFL Capital has reiterated an “Add” score on the inventory, setting a goal worth of Rs 2,300.
Based on IIFL Capital, the expiry day swap—the place BSE’s by-product contracts now expire on Thursdays as an alternative of the earlier Friday schedule (from September 2025)—has had a a lot softer-than-anticipated affect on volumes and market share.
The brokerage highlighted that whereas a ten–12% drop in volumes and a 200–250bps decline in choices premium market share have been extensively anticipated attributable to decrease volumes on the final two days of expiry weeks, BSE’s premium ADTO (Common Day by day Turnover) fell solely 5% month-on-month to Rs 164 billion in September 2025.
The market share dipped simply 90bps to 26.1% throughout the identical interval.
Even after excluding the Week 1 GST-driven spike, BSE’s adjusted ADTO declined 13% to Rs 149 billion, in comparison with a 44% mother quantity drop on E-2 days (expiry minus two days). The broader market noticed an 8% decline, resulting in a comparatively modest 150bps market share loss to 25.2%, nonetheless higher than preliminary market expectations.The brokerage additional famous that BSE continues to achieve traction within the derivatives market. Within the second quarter of FY26, BSE’s choices premium ADTO remained flat quarter-on-quarter at Rs 150 billion, however jumped 83% year-on-year. Market share expanded by 300bps quarter-on-quarter and 1300bps year-on-year to 24.4%.The present quantity run-rate is 12–13% above the full-year FY26 assumption of Rs 133 billion. IIFL said that to satisfy its full-year forecast, volumes within the second half of FY26 would wish to say no ~25% to Rs 115 billion—a state of affairs the agency views as unlikely except SEBI mandates a shift from weekly to month-to-month contracts with alternate expiries.
Within the absence of such regulatory change, the brokerage sees room for upside revisions in BSE’s earnings estimates. Each 10% change in premium ADTO, in accordance with IIFL, may affect EPS estimates by 6.5%.
Nevertheless, the report additionally identified that regulatory overhang continues to weigh on the inventory. BSE has declined 30% over the previous 4 months regardless of sustaining a robust quantity run-rate. The inventory now trades at 38x 1-year ahead EPS for a 25% CAGR in earnings over FY25–28, representing a 15% low cost to its two-year common and 33% under its current highs.
The first valuation concern stems from regulatory uncertainty, notably round potential modifications to index derivatives, comparable to mandating longer-tenure contracts. The important thing overhang stays the alignment of expiry days.
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If each main exchanges have been to shift to the same-day expiry, IIFL famous that it may considerably affect BSE’s earnings. Then again, if alternate expiries are launched, the brokerage believes BSE may benefit from additional market share good points, thereby supporting a possible re-rating of the inventory.
(Disclaimer: Suggestions, solutions, views and opinions given by the specialists are their very own. These don’t symbolize the views of The Financial Occasions)
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