Jefferies initiates coverage on NSE with ‘Buy’; here’s why it sees fresh growth potential
Jefferies has initiated coverage on NSE with a ‘Buy’ rating and a target price of Rs 2,085, indicating over 17% upside. The brokerage expects structural growth, market leadership, diversification and new businesses to drive a 15% revenue CAGR over FY27–29 and support margin expansion.
Jefferies initiated coverage on the National Stock Exchange (NSE) with a "Buy" rating, citing its market leadership, structural growth, diversification, and natural hedge against volatility as reasons for optimism. The brokerage expects NSE to deliver a 15% revenue compound annual growth rate (CAGR) over FY27-29, despite past regulatory headwinds.
India's direct equity investor base has quadrupled since the COVID-19 pandemic, though penetration remains low at 3% of the population, compared to 18% in China. NSE's volatility hedge stems from its revenue correlation with the VIX, given that options revenue is premium-based. Jefferies also noted NSE's dependence on options is overstated, with equity options accounting for 60% of operating revenues, while weekly index options represent only 40% and BSE's is around 65%.
The brokerage predicts NSE's revenue to accelerate over FY28-29, with operating revenue CAGR improving to 15% driven by increased equity options market share, cash equity turnover, and growth in tech infra revenues.
Written by urgent.news from The Economic Times - Top News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
