BSE shares jump 4% after Q2 results. Here’s what Bernstein, Motilal, others are saying

Shares of BSE gained over 4% to their day’s high of Rs 3,753.6 on the BSE on Thursday after the company reported a 44.9% year-on-year rise in consolidated net profit to Rs 809.15 crore for the second quarter of FY27 (Q2FY27), compared with Rs 558.43 crore in the corresponding period last year (Q2FY26).The exchange's revenue for the quarter increased 34.1% YoY to Rs 1,432.6 crore from Rs 1,068.4 crore a year ago. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 42.4% year-on-year to Rs 984 crore, compared with Rs 690.9 crore in the year-ago quarter. EBITDA margin expanded to 68.7% from 64.66% in the corresponding quarter last year. Transaction charges rose 42% year-on-year to Rs 1,127.8 crore in Q2FY27 from Rs 794 crore in Q2FY26.Buy, sell or hold BSE shares?Motilal Oswal has maintained a Buy rating on BSE with a target price of Rs 4,200 (17% upside), citing expectations of a recovery in derivatives activity following the partial reversal of CAS from December 2026. The brokerage expects derivatives volumes to normalise faster, supporting revenue growth and driving margin expansion through operating leverage.It expects BSE to see a strong revival in volume growth, aided by increased member participation and an improvement in the P/N ratio. Growth in the cash segment, robust demand for co-location services and the strong positioning of its Star MF platform are also expected to support business performance.Motilal Oswal has raised its earnings estimates for BSE by 3% for FY27 and 5% for FY28, factoring in a stronger volume growth trajectory following the CAS impact and better-than-expected operating leverage.Bernstein has maintained its Underperform rating on BSE while raising its target price to Rs 3,180 from Rs 2,820. The brokerage noted that the company's Q2 earnings exceeded expectations, aided by lower contributions to the Settlement Guarantee Fund (SGF).However, transaction revenue declined 15% quarter-on-quarter, reflecting the impact of the CAS changes and subdued market volatility. Bernstein believes the worst may be behind BSE, with the India VIX recovering to around 15 in October from 11.5 in August.The brokerage also highlighted that contracts traded have returned to pre-CAS levels, while Q3 premium turnover is trending significantly above its earlier estimates. Following the stronger-than-expected performance, Bernstein has raised its earnings forecasts by around 13-14%.Despite the improved earnings outlook, the brokerage remains cautious about BSE's valuations, expecting market-share gains to peak in FY27.Also read: Lenskart shares rally over 10% as strong Q2 triggers target price hikesNuvama has retained its Hold rating on the stock with a target price of Rs 3,810. The target implies an upside potential of 5.8%. The domestic brokerage remains constructive on BSE's growth prospects, identifying improving derivatives volumes, the withdrawal of expiry-day CAS and a recovery in Average Daily Premium Turnover (ADPTV) as key catalysts.The brokerage expects BSE's ADPTV to reach Rs 272 billion in FY27 and increase further to Rs 305 billion in FY28. A recovery in trading volumes in October prompted Nuvama to raise its estimates, while an improved market share in the cash segment offers an additional growth avenue.On the financial front, the brokerage projects BSE's revenue to grow at a compound annual growth rate (CAGR) of 16% over FY26-FY29.Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here