NSE Outlook Cites Growth Potential Amid AI Trading Risks

Emkay Global views the National Stock Exchange as a multi-year opportunity in India’s capital markets, citing strong profitability and a long growth runway in wealth creation. Separately, the National Stock Exchange warned that the use of AI and machine learning by market participants could adversely affect its business and financial condition. The exchange noted that the proliferation of AI-driven trading strategies could amplify market volatility and create new forms of manipulation that are difficult to detect.

The positive outlook suggests continued expansion in capital markets, with Emkay Global forecasting the NSE to deliver around 13 per cent EPS CAGR over FY27-29E. However, the warning about AI highlights regulatory challenges, as the exchange earns the majority of its revenue from transaction charges, much of which comes from futures and options trading.