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HomeMarket NewsMotilal Oswal downgrades BSE, others warn of market share loss after expiry day shift
Share of BSE have tripled in value over the last 12 months and as a result, are trading at 53 times their financial year 2027 earnings multiple, which is significantly higher than its historical average as well as that of its global peers.
Brokerage firm Motilal Oswal has downgraded shares of the Bombay Stock Exchange (BSE) Ltd. to "neutral", six months after upgrading the stock to "buy" in December last year.
Motilal Oswal has also cut its price target on BSE to ₹2,300 from ₹2,533 earlier.
BSE informed in a notice on Tuesday that market regulator SEBI has approved its request for its weekly expiry to be done on Thursday. Currently, the BSE contracts expire on Tuesday.
"Overlaying the current trends on the day-wise share in volumes for the week, we expect a market share loss of 350-400 basis points for BSE," Motilal Oswal wrote in its note.
Currently, BSE has a market share of 8% on Wednesday and Thursday and 21%, 24% and 38% respectively on Friday, Monday and Tuesday.
As a result of this shift, Motilal Oswal has reduced its premium average daily turnover (ADTO) estimates for financial year 2026 and 2027 to ₹13,700 crore and ₹15,700 crore from ₹15,500 crore and ₹19,000 crore earlier. "This is translating into a reduction of 9% and 12% in our financial year 2026 and 2027 estimates," the brokerage said.
Share of BSE have tripled in value over the last 12 months and as a result, are trading at 53 times their financial year 2027 earnings multiple, which is significantly higher than its historical average as well as that of its global peers.
Goldman Sachs, in a note had mentioned that it anticipates BSE to lose 3 percentage points of market share within the index options premium segment in the near-term. It now anticipates BSE to gain 0.5 percentage points per month from September this year, to get back to its 24% market share by March 2026 and maintain that over the medium-term.
The brokerage has cut BSE's financial year 2026 Earnings Per Share (EPS) estimates by 2%, but its estimates for the next two years remain largely unchanged.
Jefferies has also cut BSE's EPS estimates by 1-2% to factor in marginally lower volumes, but added that BSE's ability to build liquidity in the long-term contracts can offset this and implementation of common contract note can aid market share in the cash segment.
Out of the 14 analysts that have coverage on BSE, nine of them have a "buy" rating, four say "hold", while one has a "sell" recommendation.
Shares of BSE ended lower for the fifth day in a row on Tuesday at ₹2,660.
