BSE Limited shares surged 5% to ₹5,666.45 during early trade today following a ‘Buy’ call from Nuvama, which set a target price of ₹6,730, implying a 23% upside. Nuvama projects strong growth for BSE, with revenue and adjusted profit after tax (APAT) CAGR of 39.9% and 70.8%, respectively, over FY24–27. It also expects the company’s return on equity (RoE) to reach 37.9% by FY27, driven by diversified revenue streams like the StAR MF platform, colocation services, and Asia Index Private Limited (AIPL).
Nuvama acknowledges challenges posed by SEBI’s reforms in the index derivatives market but highlights that BSE is less impacted compared to its competitor, NSE. BSE’s equity index option market share is projected to increase from 3.1% in FY24 to 14.9% by FY27. The brokerage also noted that increased contract sizes would lower clearing charges, boosting EBITDA margins over the same period.
Meanwhile, Jefferies upgraded BSE to a ‘Hold’ rating with a target of ₹5,250, while Goldman Sachs initiated coverage with a ‘Neutral’ rating and a target of ₹5,060, citing concerns about valuation and market share expectations.
The stock traded in the range of ₹5,550.00 to ₹5,648.85, with a market capitalization of ₹756.75 billion. BSE’s P/E ratio is at 93.18, and the dividend yield is 0.27%.
BSE, established in 1875, remains Asia’s oldest stock exchange and continues to expand its business model, leveraging opportunities across transaction charges, corporate services, and securities.
