Buy BSE; target of Rs 4000: Motilal Oswal

Moneycontrol • 6 days ago

Original source

Key Investment Pillars

  • Volume growth recovery: BSE's F&O notional ADTO surged 85% in Oct'26MTD, driven by market volatility and partial CAS reversal, expected to reach INR216t in FY27.
  • Improving premium-to-notional ratio: The P/N ratio has improved to ~14bp, with potential for further growth driven by institutional adoption and longer-dated contracts.
  • Growth in cash segment: Cash market share has increased to ~9%, with smart-order-routing implementation and exclusive listing of popular names driving growth.
  • Star MF platform: The platform provides a steady, high-visibility, annuity-like revenue stream, with transactions increasing from 12m in 1QFY20 to 245m in 2QFY27.

Thesis Validation Checklist

To validate the investment thesis, watch for:

  • Sustained volume recovery and growth in premium ADTO,
  • Improvement in the premium-to-notional ratio,
  • Growth in the cash segment, and
  • Continued traction in the Star MF platform. These signals will indicate whether the thesis is playing out as expected.