NSE Shares Trade Flat Following 23% Rise in Q2 Net Profit as Brokerages Maintain Positive Outlook

Shares of the National Stock Exchange (NSE) traded largely flat on Wednesday following the release of its financial results for the second quarter of FY27. The exchange reported a 23 per cent year-on-year increase in consolidated net profit to ₹2,578 crore. The stock eventually closed flat at ₹1,809.40 on the BSE.

Despite the profit growth, major brokerages highlighted mixed trends across trading volumes, market share, and revenue, while generally maintaining positive recommendations on the stock.

JP Morgan reported that NSE's revenue came in 4 per cent ahead of its estimates. Operating EBITDA stood at ₹30.8 billion, marking an increase of 10.7 per cent year-on-year, though it declined 13.2 per cent quarter-on-quarter. This figure was 5.5 per cent above the brokerage's estimates. EBITDA margins remained stable at 75.7 per cent despite the lower quarter-on-quarter revenues. However, lower other income dragged core adjusted profit after tax (APAT) down to ₹25.6 billion, representing a 10.1 per cent year-on-year increase and a 16.2 per cent quarter-on-quarter decline, which was still 3.5 per cent above JPMorgan's estimates. JP Morgan maintained an overweight rating with a target price of ₹2,130, pointing to strong expense control and stable EBITDA margins, and noted that NSE trades at a FY28E price-to-earnings multiple of 36.8 times.

Macquarie maintained an outperform rating with a target price of ₹1,975, describing the quarter as broadly in line with estimates, with equity cash performance ahead of expectations and options below expectations. The brokerage noted that the impact of Closing Auction Session (CAS) rules led to a quarter-on-quarter decline in average daily traded turnover across equity cash, futures, options notional, and options premium segments. Macquarie expects a volume recovery from Q3FY27 onwards following SEBI's revision of the CAS framework last month. During the quarter, NSE's market share declined 130 basis points quarter-on-quarter in equity cash ADTO and 50 basis points in options premium ADTO.

Kotak Institutional Equities maintained a buy recommendation with a target price of ₹2,200. The firm stated that NSE's investment case is supported by its market leadership across liquidity pools, revenue diversification, and scalable in-house technology. It expects mid-teens earnings growth, improving EBITDA margins, low capital intensity, and strong cash generation. Potential risks highlighted include further derivatives regulation, trading volume sensitivity, market share loss, and technology or cybersecurity failures.

Jefferies maintained a buy rating and raised its target price to ₹2,125 from ₹2,085. The brokerage pointed to strong cash equities, commodity options, and non-transaction revenues as drivers of revenue diversification, alongside potential securities lending and borrowing reforms and improving mutual fund order market share as growth opportunities. Higher technology spending and transaction tax pressures remain key concerns.

Emkay Global maintained a buy rating with a target price of ₹2,050, expecting CAS amendments effective December 2026 to boost cash market participation and trading volumes. B&K also maintained a buy recommendation with a target price of ₹2,100, citing upcoming CAS regulatory changes and recovering options volumes as supporting factors for future trading activity.

"The financial performance reported by the National Stock Exchange demonstrates resilient core operations, even as regulatory shifts and changing market dynamics impact short-term trading volumes. For investors and market participants, the divergence between stable profit growth and quarter-on-quarter volume pressures underscores the importance of watching regulatory adjustments, such as the CAS framework updates. Long-term value in exchange infrastructure continues to rely on diversified revenue streams, technology scalability, and disciplined expense management." — Dr. Shishir Gupta, Founder & CEO, StartupLanes