On Tuesday the share price of BSE Ltd fell by 7% to its intraday low of Rs 2,380.40 per share from its previous close of Rs 2,561.05 after its result was less than the market expectation.
According to the exchange filing, BSE Ltd’s Net revenue rose by 78% YoY from Rs 239 crores in Q3FY23 to Rs 426 crores in Q3FY24 and on a quarterly basis the company revenue rose by 17% from 362 crores in Q2FY24 to its current level.
In addition, their net profit rose by 120% YoY from Rs 48 crores in Q3FY23 to Rs 106 crores in Q3FY24, and on a quarterly basis the company profit fell by 10% from 118 crores in Q2FY24 to its current level.
Motilal Oswal maintained a neutral rating with a target price of Rs 2,725. The brokerage firm expected the BSE’s third-quarter performance to double in PAT, owing primarily to contributions to the Settlement Guarantee Fund (SGF) for currency derivatives, but a 10% QoQ decrease. Operating revenue increased by 18% QoQ and 82% YoY to Rs 3.7 billion.
Despite higher operating expenses, transaction income increased significantly. Management prioritizes long-term growth in its investment decisions. SGF and clearing charges increased, reducing profitability. The company aims to reduce costs while also expanding institutions. Despite the challenges, the derivative relaunch shows promise, according to the brokerage firm.
Foreign brokerage firm Jefferies reiterated its buy recommendation with an unchanged price target of Rs 3,000 which is 26% higher than the current market price of Rs 2,380.
Jefferies maintains that the BSE’s 29x core FY26 P/E valuations are still attractive. Brokerage firms predict that Indian exchanges will trade at a higher price than their Asian counterparts due to a longer-term and higher-growth outlook.
According to their investor presentation, the company’s operating profit margin declined from 45% to 25% QoQ also their net profit margin declined from 32% to 25%. The transaction charge was increased 163% YoY and the SGF and clearing charges increased 115% YoY.
However, BSE Limited’s share price rose by 400% last year, for instance, if an investor invested Rs 1 Lakh a year ago the current value of the investment would be Rs 5 lakh.
BSE Limited is a stock exchange based in India. The Company operates a transparent market for the trading of equity, debt instruments, equity derivatives, currency derivatives, interest rate derivatives, mutual funds, and stock lending and borrowing.
Written by Sriram KV
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
