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BSE shares plummeted 19% on NSE as Sebi demanded a regulatory fee tied to annual turnover, considering notional value in options contract. It was the largest single-day decline since 2017. Jefferies downgraded BSE to Hold.
BSEs operational revenue for the quarter grew by 82% to Rs 372 crore. The operating EBITDA surged to Rs 92 crore from Rs 39 crore a year ago, while the EBITDA margin expanded sharply by 600 basis points to 25%.
Within a month of shifting the expiration day and also offering competitive options pricing, the exchange saw its market share in the F&O segment almost double. From less than 1%, BSE's derivatives market share has jumped to 14% in the last 6 months, led by new product launches.
The brokerage estimates a 150% earnings jump in FY24 while hoping BSE to double its earnings over FY 2024-26. It also finds BSEs valuation reasonable at 31X forward P/E versus RTAs (Registrar & Transfer Agents) at 38X, AMC at 28X, and depositories at 48X.
Jefferies has initiated a 'buy' recommendation for BSE, setting a price target of ₹2,700, indicating an upside of 24 percent. The stock's lower forward P/E ratio compared to other market players suggests a potentially attractive investment opportunity, said the brokerage.