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Motilal Oswal Report
BSE Ltd. reported profit after tax of Rs 1.2 billion in Q2 FY24 (beat on our estimates), up 303% YoY but down 73% QoQ (gain on sale of Central Depository Services Ltd. stake recorded in Q1 FY24). However, adjusted PAT came in at Rs 1.07 billion, up 71% QoQ.
BSE's reported operating revenue of Rs 3.1 billion, up 46% QoQ and 59% YoY, beating our estimates.
After the relaunch, derivative contracts (Sensex and Bankex) are witnessing significant traction from market participants. BSE has increased transaction charges on Sensex options (only on near expiry), with effect from 1st November '23. Thus, the derivative segment would see strong revenue growth.
We have upgraded our earning per share estimates by 16%/23% for FY24/FY25 to factor in the better-than-expected equity cash volumes and increasing treasury income from clearing and settlement funds.
Reiterate 'Neutral' with a one-year target price of Rs 2250 (based on sum-of-the-parts valuation).
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