BSE is anticipated to report a sequential fall in its second-quarter earnings, according to a preview note from Nuvama Institutional Equities. The brokerage firm emphasized that the future financial performance of the stock exchange hinges significantly on the resolution of the Closing Auction Session (CAS) regulation.
Nuvama's analysis indicates that a normalization of the Volatility Index (VIX) and the influence of CAS led to a 23.9 percent quarter-on-quarter (QoQ) decline in BSE's Average Daily Premium Turnover Value (ADPTV) during Q2. This reduction in turnover is expected to exert downward pressure on the exchange's earnings.
Q2 Financial Projections and Key Factors
For Q2, Nuvama forecasts BSE's revenue to reach ₹1,430 crore, representing a 34.1 percent year-on-year (YoY) growth but an 8.5 percent QoQ de-growth. Adjusted profit is projected at ₹740 crore, up 37.8 percent YoY but down 13.5 percent QoQ. Earnings Before Interest and Taxes (EBIT) are estimated at ₹890 crore.
Key areas for investors to monitor include further developments regarding the CAS regulation, any improvements in BSE's cash market share, updates on colocation services, and contributions to the Settlement Guarantee Fund (SGF).
SEBI's Potential Reversal on CAS Rules
Nuvama's report comes amid speculation, including a Reuters report, suggesting that the Securities and Exchange Board of India (SEBI) may halt the use of the CAS framework for calculating derivatives settlement prices for at least a year. This potential move would signify a partial reversal of the new mechanism introduced by the market regulator in August, which aimed to establish closing prices for key stocks and derivative contracts.
If implemented, the change would likely see the volume-weighted average price of the last 30 minutes of trading used to determine derivative pricing, with the regulator potentially introducing these adjustments within the current month.
Nuvama's Recommendation and Market Performance
Nuvama has maintained a 'Hold' rating on BSE shares, setting a target price of ₹3,240, which implies a modest 1.9 percent potential upside. On the National Stock Exchange (NSE), BSE shares were trading up 2.74 percent at ₹3,266.70. Year-to-date in 2026, the stock has seen a significant increase of 24.30 percent.
Beyond BSE, Nuvama's note also touched upon Asset Management Companies (AMCs) and Registrar and Share Transfer Agents (RTAs), predicting moderate AUM and revenue growth due to weak equity mark-to-market conditions. While cost management is expected to stabilize margins, muted secondary market activity could be offset by strong primary markets, potentially benefiting entities like CDSL. Nuvama's top picks in the sector include CAMS and HDFC AMC.