BSE Ltd posted a 3QFY25 operational EBITDA (ex-SGF) of Rs 4.4 billion, reflecting 12% QoQ and 137% YoY growth, driven by a 4% QoQ increase in revenue and 4 percentage point margin improvement, primarily from a higher options segment contribution. However, Jefferies has maintained its ‘Hold’ rating on the stock with a target price of Rs 5,250, citing earnings pressure due to the Settlement Guarantee Fund (SGF) impact.
BSE’s SGF contribution (~Rs 2 billion) led to a 37% QoQ earnings decline, with management indicating that increased SGF demand is likely to moderate in the coming quarters. However, Jefferies noted that higher-than-expected options ADTO (average daily turnover) partially offset the SGF drag, keeping core performance strong.
Given these factors, Jefferies cut its earnings estimates by 3-6%, acknowledging strong operational metrics but also highlighting short-term earnings volatility due to regulatory requirements around SGF contributions.
