BSE shares surged over 2 percent to Rs 2,885 apiece on May 9 after the stock exchange clocked an 18 percent year-on-year (YoY) rise in net profit at Rs 107 crore in the January-March quarter (Q4FY24). However, the profit growth was limited due to an outgo of Rs 169.7 crore to Sebi as a regulatory fee on the notional value of options contracts.
So far this year, the stock of BSE surged over 27 percent, as against a 2 percent rise in the benchmark Nifty 50 index. BSE shares hit a 52-week high of Rs 3,624 apiece on April 24, 2024.
In Q4FY24, the company's consolidated revenue from operations jumped 115 percent YoY to Rs 488.3 crore from Rs 227 crore in the year-ago period. Total expenses, too, grew by 37 percent YoY to Rs 418.8 crore in Q4FY24.
BSE's transaction income exhibited strong growth in the March-ended quarter. Transaction charges surged by 318 percent YoY, while services to corporates rose by 34 percent YoY. The company's board of directors approved a final dividend of Rs 15 per share.
Going ahead, analysts at Motilal Oswal expect the re-launch of BSE derivatives to be a trend-changing measure. They expect increased member participation, new product launches (stock derivatives), rising awareness about products, and a shift in Bankex expiry would drive market share gains for BSE.
Currently, BSE has an 18 percent market share in notional turnover and a 7 percent premium turnover market share in the equity derivatives segment.
Motilal Oswal raised EPS estimates by 6 percent/10 percent for FY25/FY26 to factor in higher-than-expected growth in volumes and higher profitability in CDSL. They reiterated a 'neutral' rating on BSE, with a one-year target price of Rs 3,000 per share.
"Other levers that will support growth over the medium term include
repricing of derivatives contracts, co-location revenues, continued momentum in the Star MF business, growth in the cash segment, the possibility of levying a fee for the listing of debt securities, start of operations at its Power Exchange, and commencement of revenue from its Gold Spot exchange," the brokerage firm added.
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