NSE stock lists: Macquarie, PL Capital begin coverage; see up to 9% upside

Domestic and foreign brokerages have started coverage on the NSE stock that listed on Thursday. Macquarie initiated coverage with an ‘outperform’ rating calling it ‘The Dominator’ due its leading market share and power, it has set a price target of Rs 1,965 for the stock.

 

Domestic brokerage PL Capital, too, has initiated coverage on the counter with an ‘accumulate’ rating and a price target of Rs 1,950 per share.

 

“Our target price of Rs 1,965 is based on 32.5x FY29E PER, justified by opportunities in India's financialisation journey and NSE's positioning as a dominant market infra provider,” wrote Samneet Sinha of Macquarie in a report dated 24 September.

 

The NSE stock listed on Thursday at the BSE and the Metropolitan Stock Exchange of India (MSEI) at Rs 1,800 apiece, up around 0.84 per cent from its issue price of Rs 1,785 per share.  

 

For NSE, Macquarie forecasts a 12 per cent revenue CAGR over FY26-30E, 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. 

 

While NSE trades at a 65 per cent P/E premium to international exchanges (30x FY29E vs 18x), the Macquarie report said, it delivers around 60 per cent higher growth and returns (compared to international peers), supported by India's structural financialisation tailwinds. 

 

At their target price, Macquarie said, the NSE stock would trade at a 2.5x PEG, broadly in line with global peers, suggesting the premium is justified on a growth-adjusted basis. 

 

“The stock is valued at 22x FY29E EV/EBITDA and 29.5x FY29E PER, as per its ‘cap price’ of the prospectus price band, reflecting its marquee positioning in the ecosystem. Potential for rerating could come from traction in new products, which would be upside to our estimates,” Sinha wrote. 

Financial snapshot source: Macquarie report

 

At the operating level, NSE’s Ebitda margin, according to analysts at PL Capital, contracted to 71.3 per cent in FY26 from 77.8 per cent in FY25 due to settlement payments related to pending legal cases. With these cases now resolved, they expect Ebitda margin to normalize to 76 per cent by FY29E.  

 

Profit after tax (PAT), they said in a 24 September report, is expected to grow at 11 per cent CAGR over FY26-29E with FY29E return of equity (RoE) of 35 per cent, and supported by a capital-light, high-margin business model. Key risk to their estimates include lower volumes due to regulatory hurdles/ market volatility.

 

“We expect valuation to sustain at these levels, supported by structural factors such as near-dominance in key segments with high entry barriers; healthy profit growth (11 per cent CAGR over FY26-FY29E); and optionality from new derivative products/colocation revenue. We value NSE at 35x FY29E P/E to arrive at a target price of Rs 1,950,” wrote Shreya Khandelwal, Dhanik Hegde and Harshada Gite of PL Capital in the report.

 

NSE’s initial public offering (IPO) was subscribed 5.71x overall, with bids received for 505.8 million shares against 88.6 million shares on offer for nearly ₹22,560 crore offer for sale, according to data on BSE.