The National Stock Exchange of India (NSE) may be approaching a new phase of growth as more Indian households move their savings into financial markets. That is the central investment case made by global brokerages Morgan Stanley and JPMorgan, which have initiated coverage on the exchange with Overweight ratings, betting on its market dominance and the long-term expansion of India's capital markets.
NSE shares were trading largely flat on Monday, 2 November, despite the positive brokerage calls. Morgan Stanley has set a price target of ₹2,315 per share, implying an upside of around 30% from Friday's closing price. JPMorgan has assigned a target of ₹2,130, indicating a potential upside of nearly 20%.
Both brokerages believe NSE is well placed to benefit from rising retail participation, growing systematic investment plan (SIP) contributions and the increasing share of household savings flowing into equities. However, they also flag market-share pressures in index options and regulatory changes as risks investors should watch.
Morgan Stanley sees NSE as a strong play on India's financialisation story, backed by its dominant liquidity, scalable technology and attractive operating economics. The brokerage expects revenue and normalised profit after tax to grow at a compound annual growth rate (CAGR) of around 15% between FY27 and FY29, following a relatively subdued 6% normalised PAT CAGR over FY24-FY27.
The exchange has demonstrated its ability to deliver sustained growth, with normalised profits growing at a CAGR of 19% over 14 years and 25% over the past decade, Morgan Stanley noted.