Neutral BSE; target of Rs 2250: Motilal Oswal

Motilal Oswal recommended Neutral rating on BSE with a target price of Rs 2250 in its research report dated October 10, 2025.

Broker Research

October 13, 2025 / 12:23 IST

Neutral

26 Aug, 2025 12:21

Volume

Todays L/H

Motilal Oswal's research report on BSE

The regulator is considering measures to increase the tenure of the options segment (Link). One of the measures could be shifting from weekly to monthly expiries for index contracts. If implemented, this could have significant impact on volumes for stock exchanges. Earlier, the regulatory mandate allowing only one weekly expiry per exchange (implemented in Nov’24) led to a shift in volumes from Bank Nifty to SENSEX, driving BSE’s premium turnover market share up from 11.4% in Oct’24 to 24.4% in Sep’25. However, a large pool of FPIs is still in the process of setting up their systems following rack allocation, which is expected to further boost volumes. The shift of expiry from Tuesday to Thursday (implemented in Sep’25) brought fresh flows, increasing non-expiry day share to the mid-teens and expiry day share to 50- 55%, albeit at the cost of a decline in Friday activity. Enhanced broker engagement and the combined order book initiative are driving improvements in execution quality and cash segment flows. BSE’s bulk deals capacity has improved significantly (from 30-40% earlier to ~80-90%), while the infrastructure built for derivatives trading is also being leveraged to support cash activity.

Outlook

According to our sensitivity analysis, the removal of weekly expiry could lead to a 35%/ 27% decline in our FY27 derivatives revenue/ PBT (revenue – regulatory fee – clearing cost), resulting in 21% impact on our FY27E EPS. Given the elevated regulatory risks, we reiterate our Neutral rating with a oneyear TP of INR2,250 (based on 40x FY27E EPS).

For all recommendations report, click here