Quant-Funda : Buy between Rs.3,770-3,850 BSE Ltd For Target Rs.4,989 - Geojit Investments Ltd
Fundamental View
BSE Ltd, Asia’s oldest stock exchange, is a leading Indian market infrastructure institution with over 26.8 crore investor accounts, offering trading, clearing, listing, mutual fund distribution and market-data services across multiple asset classes.
* Revenue grew 34% YoY to Rs.1,433cr in Q2FY27, driven by a 42% YoY rise in transaction charges to Rs.1,128cr, backed by higher trading activity, particularly in equity derivatives.
* EBITDA rose 43% YoY to Rs.973cr in Q2FY27, with margin expanding ~400 bps YoY to 68% from 64%, led by strong transaction revenue growth and better operating leverage.
* PAT grew 45% YoY to Rs.809cr, driven by strong growth in transaction revenues & higher operating margins, with net profit margin improving ~300 bps YoY to 52% in Q2FY27.
* Equity-derivatives premium turnover remained strong at Rs.22,531cr, up ~50% YoY, while the participation base expanded to 616 members and 12mn UCCs( unique client codes), supporting the longer-term derivatives franchise.
* The introduction of the Closing Auction Session (CAS) weighed on expiry-day activity, contributing to a ~24% QoQ decline in equity-derivatives premium turnover in Q2FY27; however, SEBI’s restoration of the last-30-minute VWAP-based settlement from December 2026 should improve expiry-day predictability and support normalization in derivatives volumes.
* As per market consensus, BSE trades at 1 yr fwd P/E of 41x (3yr avg. P/E at 44x). The premium valuation is supported by strong transaction-led earnings growth, ~68% EBITDA margins, operating leverage and continued scaling of the derivatives franchise.
Technical View
* BSE has broken out of a bullish flag pattern on strong volumes, showing signs of a fresh bullish leg.
* The stock is trading well above its 20, 50, 100 and 200 EMAs, reinforcing the positive outlook.
* The weekly RSI stands at 60.42, bouncing off its signal line at 47.74, while the weekly MACD has given a bullish crossover with the histogram turning positive.
* The Rs.3,770-3,850 level presents a comfortable buy zone. With a stop-loss at Rs.3,213 and a medium-term target of Rs.4,989, the setup offers an attractive positional opportunity.
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