Buy BSE, target price Rs 6,500: Motilal Oswal Financial Services

Motilal Oswal Financial Services has a buy call on BSE with a target price of Rs 6,500. The current market price of BSE Ltd. is Rs 5957.6. BSE., incorporated in 2005, is a Small Cap company with a market cap of Rs 78328.76 crore, operating in the Financial Services sector.

BSE Ltd. key Products/Revenue Segments include Fees & Other Charges for the year ending 31-Mar-2024.

Financials

For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 818.98 crore, up 21.45% from last quarter Total Income of Rs 674.34 crore and up 123.15% from last year same quarter Total Income of Rs 367.01 crore. The company has reported net profit after tax of Rs 321.40 crore in the latest quarter.

The company's top management includes Mr.Pramod Agrawal, Mr.Sundararaman Ramamurthy, JusticeShiavax Jal Vazifdar, Mr.Umakant Jayaram, Prof.Subhasis Chaudhuri, Dr.Padmini Srinivasan, Ms.Sushri Jayshree Vyas, Mr.Nandkumar Saravade, Mr.Jagannath Mukkavilli. Company has S R Batliboi & Co. LLP as its auditors. As on 30-09-2024, the company has a total of 14 crore shares outstanding.

Investment Rationale
Motilal Oswal expects the premium-to-notional turnover ratio to improve to 12bp/13bp in FY26/FY27, boosting BSE's revenue. Lower regulatory and clearing costs will be profitability drivers. Additionally, stable momentum in Star MF platform and the scale-up of co-location services will help BSE sustain growth. The brokerage expects BSE to register a CAGR of 44%/74%/74% of revenue/ EBITDA/ PAT during FY24-27E, as we believe the improvement in the premium-to-notional turnover ratio will offset the volume decline. Motilal Oswal reiterates BUY with a target price of Rs 6,500 (45x Sep-26E EPS).

Promoter/FII Holdings
Promoters held $MarketsData-marketResults.newShareHolding.summary.promoters.percentage per cent stake in the company as of 30-Sep-2024, while FIIs owned 13.01 per cent, DIIs 11.65 per cent.