NSE shares surge to a post-listing high, market capitalization crosses $50 billion

Shares of the National Stock Exchange (NSE) were trading higher on Friday, November 6, after hitting a post-listing high of ₹1,953.95 during the session. The stock was on track to extend its gains for a fourth consecutive trading day, taking its market capitalisation past $50 billion at the day’s high.

The rally comes despite a relatively weak sequential performance in the September quarter (Q2FY27), with the exchange reporting a decline in transaction activity and profitability. While the results were marginally ahead of estimates, lower trading volumes across segments weighed on its operating performance.

Transaction activity declined 16% quarter-on-quarter, with average daily traded volumes (ADTV) falling across segments. ADTV in equity options premium dropped 25% sequentially, while yields also moderated by 3 basis points.

Income from heightened initial public offering (IPO) activity partly offset the weakness in transaction-related revenue. However, the decline in trading activity weighed on operating performance, with EBITDA falling 13% quarter-on-quarter and the EBITDA margin contracting 215 basis points, primarily due to operating deleverage.

Income from treasury investments also declined 30% to ₹479 crore from ₹682 crore in the previous quarter. Consequently, net profit fell 17% sequentially to ₹2,578 crore.

Commodity derivatives, however, saw stronger activity during the quarter. Average daily turnover (ADT) in commodity futures rose 38% quarter-on-quarter to ₹138 crore, while options premium turnover surged 116% to ₹297 crore, driven by strong traction in crude oil contracts.

NSE’s market share remained broadly stable across segments, although it lost 1 percentage point in the equity cash market to 92%.

Brokerages remain positive on NSE

Kotak Institutional Equities has a ‘Buy’ rating on NSE, with a price target of ₹2,200 per share. The brokerage’s positive view is underpinned by NSE’s leadership across liquidity pools, diversified revenue streams and scalable, in-house technology infrastructure.

Kotak expects the exchange to deliver mid-teens earnings growth, supported by an improvement in EBITDA margins, low capital intensity and strong cash generation.

However, it flagged risks from further regulatory tightening in the derivatives segment, sensitivity to trading volumes, potential market share erosion and technology or cybersecurity failures.

JPMorgan has an ‘Overweight’ rating on NSE, with a price target of ₹2,130 per share. The brokerage said the stock is trading at 36.8 times its estimated FY28 price-to-earnings (P/E) multiple.

Macquarie has an ‘Outperform’ rating on NSE, with a price target of ₹1,975 per share. The brokerage described the Q2 performance as broadly in line with expectations, with the equity cash segment performing better than estimated, while options revenue remained below expectations.

Macquarie highlighted the impact of the Closing Auction Session (CAS) framework on trading activity, which led to sequential declines in ADTV across segments. Equity cash ADTV fell 13% quarter-on-quarter, futures volumes declined 19%, options notional turnover dropped 16%, and options premium turnover fell 25%.

The brokerage expects trading volumes to recover from Q3FY27 onwards, following the Securities and Exchange Board of India’s (SEBI) revision of the CAS framework last month. It also noted that new products remain at a nascent stage, while the regulatory environment could become more supportive.