Target: ₹3,800

CMP: ₹2,875.60

BSE Ltd has delivered excellent results in Q3-FY24. Revenue increased by 82/18 per cent y-o-y/q-o-q to ₹372 crore while PAT fell 10 per cent q-o-q to ₹106 crore due to higher Settlement Guarantee Fund (SGF) contribution of ₹92 crore. The operating EBITDA for Q3-FY24 is ₹92 crore, up from ₹39.10 crore, with the operating EBITDA margin increasing to 25 per cent from 19 per cent in the corresponding quarter last year.

Equity cash transaction revenue grew by 68/163 per cent y-o-y/q-o-q to ₹160 crore in Q3-FY24. Derivatives contributed ₹34.20 crore in December 2023 up by 83 per cent from November 2023.

BSE can unlock significant financial gains by focusing on two key areas: increasing derivative transaction rates (cost efficiency) and reducing clearing costs through negotiation with National Commodity & Derivatives Exchange Limited (NCL).

We continue to remain bullish on this stock with an EPS of 77 and P/E multiple of 49x on the basis of formidable competitive advantage, in the equity cash segment, coupled with the exponential growth observed in the derivative segment. Furthermore, BSE’s commanding 85 per cent market share among exchange-distributed platforms, combined with the growing transaction volumes in its StAR MF platforms, have notably contributed to this financial upswing.

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