UBS has initiated coverage on BSE with a ‘Buy’ rating and set a target price of ₹5,350, indicating a potential 37% upside from the current market price of ₹3,907.00. The brokerage firm believes that the scaling up of options turnover will be a major driver for BSE’s growth, contributing significantly to its revenue expansion.
According to UBS, BSE’s diverse revenue streams and its evolving business model are expected to support further scalability. The brokerage also foresees an improvement in operating margins, which could add further value to the company’s financial performance. Additionally, a common contract note approval could unlock further potential for the exchange, enhancing its market positioning.
The firm highlighted that BSE is currently trading at 33 times its one-year forward price-to-earnings (P/E) ratio, which is an 11% premium to its historical average. However, UBS believes that BSE’s past valuation multiples hold less relevance under its revamped business model, given the structural shifts and business expansion taking place.
With these factors in play, UBS maintains a bullish outlook on BSE, citing its evolving revenue mix and strategic developments as key strengths that could drive future growth.
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