In a morning rally on November 13, BSE stock experienced a robust surge of over 6% following stellar performance in the September quarter, leaving analysts optimistic about its outlook.
BSE reported a remarkable 303% year-on-year increase in net profit, reaching Rs 120 crore, while revenue saw a substantial 46% rise, totaling Rs 310 crore. Analysts express confidence in the company, citing better-than-expected equity cash volumes and a growing treasury income from clearing and settlement funds.
The board of directors at BSE greenlit a fund infusion of Rs 22.36 crore in India International Exchange (IFSC) Ltd (India INX) and Rs 33.88 crore in India International Exchange (IFSC) Ltd for the acquisition of equity shares through a subscription to a rights issue.
Motilal Oswal views the relaunch of BSE derivatives products as a game-changing move, anticipating continued market share gains driven by increased member participation, growing product awareness, and a shift in Bankex expiry.
With a 10% market share in notional turnover and a 3% premium turnover share in the equity derivatives segment, BSE is expected to scale up further, according to the brokerage. Additional growth levers include momentum in the Star MF business, cash segment expansion, potential charges on the INX platform, the possibility of fees for listing debt securities, the initiation of operations at its Power Exchange, and the start of revenue from its Gold Spot exchange.
Motilal Oswal analysts adjusted their earnings per share (EPS) estimates by 16% and 23% for FY24/FY25, considering robust equity cash volumes and increasing treasury income. The brokerage maintains a “neutral” rating on the stock with a one-year target price of Rs 2,250.
BSE recently revised transaction charges for Sensex Options, and HDFC Securities notes that assuming a premium market share of about 9% in FY26, derivatives could contribute significantly to BSE’s total revenue, EBITDA, and incremental growth.
Analysts foresee a compound annual revenue growth rate of approximately 26% and EPS growth at 31% over FY23-26, driven by a revival in transaction revenue.
As of 11:02 am, BSE was trading 5% higher than the previous day at Rs 2,238 on the National Stock Exchange. The stock had surged up to 8% in the special Muhurat trading the previous day. Year-to-date, the share has delivered multibagger returns, rallying over 300%, providing substantial gains to long-term investors.
