BSE to sustain mkt share gains, says Motilal Oswal, amid regulatory clouds

BSE Ltd. has witnessed robust volume traction in the first half of FY2026, supported by rising member participation, strong cash segment activity, demand for colocation, and the well-positioned Star MF platform, according to Motilal Oswal. 

"We expect BSE to sustain its market share gains and maintain robust volume traction, as witnessed in 1HFY26, supported by increasing member participation," the domestic brokerage said. However, regulatory overhang continues as the Securities and Exchange Board of India (Sebi) is considering measures to extend the tenure of the options segment, including a potential shift from weekly to monthly expiries for index contracts. 

 

If implemented, this could significantly impact volumes, with Motilal Oswal estimating a 35 per cent decline in FY2027 derivatives revenue and a 27 per cent drop in profit before tax, translating to a 21 per cent hit to earnings per share (EPS).

 

 

Earlier regulatory changes, including the mandate of one weekly expiry per exchange in November 2024, shifted volumes from Bank Nifty to Sensex, boosting BSE's premium turnover market share from 11.4 per cent in October 2024 to 24.4 per cent in September 2025. A subsequent expiry shift from Tuesday to Thursday in September 2025 further improved non-expiry day volumes to the mid-teens and expiry day share to 50-55 per cent, though Friday activity declined.

 

Enhanced broker engagement and the combined order book initiative have also contributed to better execution quality and cash segment flows. Despite these positives, elevated regulatory risks have led Motilal Oswal to maintain a 'Neutral' rating on BSE with a one-year target price of ₹2,250. 

 

While media reports have highlighted the regulator’s stance on weekly expiries, no formal consultation has been initiated. Shifting weekly expiries to fortnightly or monthly could improve margins, but moving to monthly risks volume loss to Bank Nifty. 

BSE Q1 results 

The bourse reported a 103.4 per cent year-on-year (Y-o-Y) rise in net profit to ₹539 crore for the first quarter of the financial year 2026 (Q1FY26), compared with ₹265 crore in the same period last year. Sequentially, net profit was up 9.1 per cent.

 

Revenue from operations rose 57.1 per cent to ₹958 crore from ₹610 crore in the corresponding quarter of the previous fiscal. At the operating level, Ebitda surged 104.7 per cent to ₹704 crore from ₹344 crore in Q1FY25, while the Ebitda margin expanded sharply to 73.56 per cent from 57.19 per cent a year ago.

BSE share price history

The airline's stock fell as much as 1.2 per cent during the day to ₹2,355 per share. The stock pared losses to trade 0.55 per cent lower at ₹2,371 apiece, compared to a 0.36  per cent decline in Nifty 50 as of 10:55 AM. 

 

Shares of the company snapped a seven-day winning streak. The counter has risen 33 per cent this year, compared to a 6.5 per cent advance in the benchmark Nifty 50. BSE has a total market capitalisation of ₹96,501.37 crore.