The brokerage projects NSE's revenue compound annual growth rate to climb to 15% between FY27 and FY29, rebounding from earlier policy-induced headwinds. Operating margins are also slated to improve, supported by prior heavy investments across technology infrastructure, staff, and emerging initiatives like GIFT City operations. Furthermore, the bourse maintains a safer revenue profile than its direct competitors because low-turnover traders represent only a minor share of its volume.
Key points
Jefferies anticipates NSE's EBITDA margin will expand by 200 basis points to reach 78% by…: Jefferies anticipates NSE's EBITDA margin will expand by 200 basis points to reach 78% by FY29.
Low-turnover clients represent only 2% to 3% of trading activity, leaving NSE largely shi…: Low-turnover clients represent only 2% to 3% of trading activity, leaving NSE largely shielded from retail-focused regulatory curbs.
New expansion into commodities, electronic gold receipts, mutual fund platforms, and GIFT…: New expansion into commodities, electronic gold receipts, mutual fund platforms, and GIFT City provides diversified long-term revenue upside.
Sources checked by our analysis pipeline: 1
The international brokerage called NSE a “market leader with new growth optionality”, expecting the company to deliver a 15% revenue CAGR over FY27-29, despite past regulatory headwinds. India has seen an approximately 4x increase in direct equity investors since the COVID-19 pandemic, led by younger cohorts. Yet penetration is only 3% of the population, much lower when compared to 18% in China, Jefferies noted.
Besides structural tailwinds, exchanges offer a volatility hedge, as revenue is positively correlated with the VIX, given that options revenue is premium-based, unlike that of global peers, it explained.
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NSE’s dependence on options is overstated: Jefferies
NSE is the market leader in cash equities, index F&O, stock F&O, and clearing & settlement. While around 60% of operating revenues come from equity options, weekly index options, which have faced regulatory action, account for.40% operating revenues, while the same for BSE stands at around 65%.Low-turnover clients account for only 2-3%,…
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