NSE edges higher post Q2; Jefferies ups target after 1st earnings since IPO

NSE share price target: Following the Q2 results, Jefferies has maintained its 'Buy' rating on NSE shares, and raised the target price to ₹2,125 from ₹2,085.

NSE share price target: National Stock Exchange (NSE) shares traded largely flat during Wednesday’s session, following the announcement of its first quarterly results since its Dalal Street debut last month. NSE reported a 23 per cent Y-o-Y rise in net profit for the September quarter of FY27 (Q2FY27).

 

The stock opened marginally lower at ₹1,795 and slipped to an intraday low of ₹1,786 before recovering to trade in positive territory.

 

As of 3 PM, NSE shares were trading 0.34 per cent higher at ₹1,810. Nearly four million shares had changed hands, translating into a turnover of ₹674.18 crore.

NSE Q2FY27 results 

 

According to a regulatory filing, NSE reported 23 per cent increase in consolidated net profit at ₹2,578 crore for September quarter FY27, driven by higher transaction revenue and a sharp decline in expenses. The exchange had logged a profit after tax of ₹2,098 crore in July-September period of the previous fiscal.

 

Total income rose 9 per cent to ₹4,554 crore in the second quarter of FY27 from ₹4,160 crore a year ago.

 

Revenue from transaction charges increased 9 per cent to ₹3,035 crore during the quarter as compared to ₹2,789 crore in the year-ago period, driven by higher volumes in the cash market and equity options segments.

 

The cash market recorded an average daily traded volume (ADTV) of ₹1,18,377 crore, registering a 24 per cent year-on-year growth. Meanwhile, ADTV for equity options (premium value) rose 3 per cent to ₹47,977 crore. Commodity options premium ADTO rose 116  sequentially, led by crude oil options.

 

Jefferies hikes NSE share price target

Following the Q2 results, Jefferies said that NSE has reported in-line numbers, adding that the current valuations do not reflect NSE’s moats. It has maintained its 'Buy' rating on NSE shares, and raised the target price to ₹2,125 from ₹2,085. 

 

The brokerage said that equity futures remained weak in NSE, with Futures ADTO declining 7.7 per cent Y-o-Y, partly due to STT hike implemented earlier in the year.

Tech spending grew 23 per cent Y-o-Y in the quarter. The exchange expects tech costs to grow in the mid-teens.

Jefferies has kept its FY27-29e EPS estimates largely unchanged, as higher equity options ADTO in Q3FY27 will be offset by lower other income.

With regulatory headwinds in the past, the brokerage expects a 15.6 per cent revenue CAGR over FY27-29e. Further, Ebitda margin could expand by 200bps till FY29e led by operating leverage.

Also, NSE is adding new growth levers, which could add 15 per cent to revenue/PAT by FY30e, the brokerage added.

Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited. They do not reflect the views of Business Standard. Readers are advised to exercise discretion.