BSE Q4 Results Review - Limited Scope For Further Rerating: HDFC Securities

"NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..HDFC Securities Institutional Equities.BSE Ltd. reported a strong quarter, with 31% QoQ revenue growth and healthy margins. The robust performance was on account of higher transaction revenue, supported by scale-up in derivatives volume and strong cash volumes. Post the regulatory setback, BSE had to take an immediate price hike of ~35% to offset the impact of higher regulatory costs. The price hike which was an optionality became a necessity. The shift from premium to notional will cost BSE a regulatory fee of ~Rs 2.8/3.6 billion in FY25.26E, which is ~12% of revenue. We believe the price hike will decelerate the pace of market share gain. Also, BSE pricing is now comparable to NSE, but options profitability is inferior due to lower premium realisation. In April 2024, BSE had a notional/premium market share of 19/8.6%, which we believe will gradually reach 25/12% in FY26E. BSE was commanding a higher multiple based on strong growth and pricing optionality, which we believe will moderate. We increase our revenue estimates by 16% due to the price hike but cut the margin estimate by 700 bps to account for higher regulatory costs. The revenue/earnings per share compound annual growth rate of ~42/45% over FY24-26E are robust but already factored into BSE’s valuations. We thereby downgrade BSE to Reduce, based on regulatory uncertainty, expected growth moderation in FY26E and rich valuations. Our target price of Rs 2,860 is based on 35 times (versus 40 times earlier) core FY26E profit after tax + CDSL stake + net cash ex SGF..Click on the attachment to read the full report:.Piramal Enterprises Q4 Results Review - More Stress Ahead; Downgrade To Neutral: Motilal Oswal .DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner."

BSE Q4 Results Review - Limited Scope For Further Rerating: HDFC Securities

BSE was commanding a higher multiple based on strong growth and pricing optionality, which we believe will moderate

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BSE Q4 Results Review - Limited Scope For Further Rerating: HDFC Securities

BSE was commanding a higher multiple based on strong growth and pricing optionality, which we believe will moderate

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