BSE share price falls over 4% after brokerage firm Nuvama cuts target price by 30%

The share price of BSE Ltd fell over 4 per cent on Monday’s trading session after brokerage firm Nuvama Institutional Equities cut its target price by nearly 28 per cent.

At 12:42 pm, BSE stock was trading 3.76 per cent lower to ₹4,025 apiece on March 10. The stock has plunged over 10 per cent in the last five trading sessions.

Why Nuvama cut the target price of BSE stock?

The brokerage firm cut the target price of BSE citing concerns that the stock exchange’s market share could decline in the future.

“Given heightened competitive intensity, uncertainty on incremental regulatory changes and reduced EPS estimates, we are cutting the target PE to 40 times (from 50 times), yielding a revised target of ₹5,160 (earlier ₹7,250); retain ‘BUY’,” Nuvama said.

Peer exchange NSE has shifted the expiry day for its derivative contracts to Monday, a day earlier than BSE’s expiry. According to Nuvama, this change could reduce overall trading volumes, as retail traders—who are typically more active closer to expiry—will have fewer opportunities to trade.

Previously, BSE’s index option premium market share surged from 16.4% in December 2024 to 22.1% in February 2025, largely driven by its decision to move the F&O expiry day from Friday to Tuesday. However, on March 4, NSE announced that it would revise its index option expiry from Thursday to Monday, effective April 4.

Nuvama suggests that this move could help NSE regain its previous market share of 83.6 per cent, last recorded in December 2024. In January, 22.9% of premium turnover for Sensex and 18.5% for Bankex occurred one day before expiry, likely due to BSE’s Tuesday expiry compared to NSE’s Thursday expiry, which created a three-day gap.

Nuvama stated that with the NSE expiry day now just one day before BSE’s, BSE’s ability to capture premiums on non-expiry days may decline, potentially impacting overall market growth.

“This shall moderate BSE’s market share to 18 per cent from 22 per cent in February 2025. Additionally, SEBI’s consultation paper on derivative exposure limits may clip growth,” the brokerage said in a note.

Nuvama has revised its adjusted profit estimates downward, reducing FY25 projections by 0.2 per cent, FY26 by 13.4 per cent, and FY27 by 11.6 per cent. As a result, the expected EPS CAGR for FY25–27 has declined to 17.1 per cent.

Goldman Sachs also cut target price of BSE two times within a week over its market share in options trading.

The brokerage firm maintained its neutral rating on the stock but lowered its target price to ₹4,230 per share, indicating a potential downside of about 2 per cent from its previous closing price. On March 3, Goldman Sachs had already cut its target from ₹5,650 to ₹4,880, citing expected difficulties in BSE’s options market performance.

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