BSE celebrated its 149th foundation day on 10th July,2023 and launched a new logo for the big day. BSE’s shares today ended at Rs 701, gaining nearly 1%. ICICI securities set a target price of Rs 746 for BSE, implying an upside of 8.4% from its CMP. The current market capitalization of BSE is Rs 9,500 crore. BSE is likely to see a growth rate of 23% in its core PAT (profit after tax) during FY23-FY25E to Rs 250 crore.
CDSL stake sale, in June 2023 was done at a weighted average price of Rs 990 resulting in a cash inflow of Rs 5.2bn, which has resulted in a higher cash volume in BSE’s balance sheet, which the company will use for buyback as a result. BSE has also reported a strong turnaround in ADTV, a 39% growth rate on-month to Rs 52bn and derivatives have also risen to Rs 998bn in June, within a month. BSE improved its cash market share from 5.5% in April 2023, to 5.8% in May 2023 and 7.6% in June 2023, the report said.
ICICI expects revenue from BSE’s currency derivatives at Rs 106mn/ Rs 115 mn in FY24E/ FY25E. Revenue of Rs 2.2bn in FY24E and Rs 2.6bn in FY24E is also expected as a resultant of strong recovery of cash volumes in FY24 till date. Listing fees, data and other charges, being the additional operating revenue, is expected to clock a CAGR of 5-7% between FY23-FY25E.
Stock Call: BSE
Add | CMP: Rs 701 | Target Price: Rs 746 | Upside: 8.4%
“We upgrade BSE to ADD (from Hold) with a revised target price of Rs 746 (earlier: Rs640)”, said the report.