BSE shares jump over 4% as Motilal Oswal upgrades after 16 months; Check upside potential

Shares of the Bombay Stock Exchange (BSE) Ltd

. jumped as much as 5% on Monday, October 26, after brokerage firm Motilal Oswal upgraded the stock to "buy" from its earlier rating of "neutral."

Motilal Oswal has upgraded BSE for the first time after nearly 18 months. It had downgraded the stock in June 2025. The brokerage has also raised its price target on BSE along with the upgrade to ₹4,000 from ₹3,480. The revised price target implies an upside potential of 23% from Friday's closing levels.

According to the note, the Notional Average Daily Turnover (ADTO) has surged 85% so far in October, compared to the lows made in August, as a partial Closing Auction Session reversal taking effect from December 7 provided a regulatory catalyst for the same.

BSE has achieved a 30% market share in premium turnover, and Motilal Oswal expects a further expansion in this number. Its cash market share has also improved from 7% to 9%. Motilal Oswal added that NSE's listing and opening of its lock-in in March 2027 offers a further catalyst for its turnover to increase.

The Star MF and co-location businesses broader BSE's earnings drivers beyond just trading activity, the Motilal Oswal note said, adding that it expects the exchange's EBITDA margin to reach 70% levels from 65% in financial year 2026, having improved to current levels from just 9% in financial year 2021.

As a result of these multiple tailwinds, Motilal Oswal has raised BSE's financial year 2027 and 2028 Profit After Tax (PAT) estimates by 10% to 12% respectively, and a sustained volume recovery and improving premium-to-notional ratio could drive a further 20% increase to Motilal Oswal's financial year 2028 PAT estimates for BSE, the brokerage said in its note.

20 analysts have coverage on BSE, of which 13 have a "buy" rating, four say "hold", and three have a "sell" rating. The consensus estimate of price targets implies an upside potential of 12.4% from current levels.

Shares of BSE are trading 3.9% higher on Monday at ₹3,355. The stock is among the top gainers on the Nifty 50 index on Monday.