BSE reports strong earnings growth but maintains neutral outlook with target price

BSE had a strong performance in the second quarter of FY25, with a 192% YoY increase in profit after tax (PAT) to INR 3.46 billion, surpassing expectations by 20%. This growth was driven by revenue expansion and improved operational efficiency, with operating revenue increasing 137% YoY to around INR 7.5 billion.

The company experienced significant growth in transaction charges and services to corporates, with a 284% YoY increase. The average number of monthly transactions processed also rose 1.7 times YoY to 50.6 million. EBITDA for the second quarter reached INR 3.9 billion, a 192% YoY increase, and EBITDA margins expanded to 52.1%.

Motilal Oswal has revised its earnings estimates for BSE, reflecting the strong growth in transaction income and lower operating expenses. However, due to uncertainties related to F&O regulations, the firm maintains a Neutral rating on the stock, with a target price of INR 4,500 based on a 40x multiple of the estimated EPS for September 2026.

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