BSE Stock Climbs Following Jefferies’ Positive Forecast

BSE Stock Climbs Following Jefferies’ Positive Forecast

BSE Stock Climbs Following Jefferies’ Positive Forecast

Bombay Stock Exchange (BSE) shares have shown a remarkable increase, rising by 5 percent in intra-day trading on Tuesday. This surge marks a continuation of gains for the third consecutive session, following a favorable report from global brokerage Jefferies. Jefferies has set a positive tone by initiating a ‘buy’ recommendation for BSE, with a price target of ₹2,700, implying a 24 percent upside. This bullish stance is partly based on BSE’s lower forward price-to-earnings (P/E) ratio compared to other market players, pointing to a potentially attractive investment.

Robust Performance and Multi-Bagger Gains

BSE’s stock has been on an impressive upward trajectory, reaching an intra-day high of ₹2,280, a 5 percent increase. Over the last three sessions, the stock has advanced over 9 percent. The stock has delivered multi-bagger returns, soaring almost 280 percent in the last year and over 318 percent in 2023 Year-To-Date (YTD). Particularly noteworthy is the stock’s performance in November, with a rise of over 22 percent, contributing to continuous gains for eight months since April. However, the stock faced some setbacks in the early months of the year, experiencing declines in January, February, and March.

Record Highs and Earnings Growth Projections

The BSE stock reached a record high of ₹2,475 earlier in November and has advanced 509 percent from its 52-week low, demonstrating robust market confidence. Jefferies maintains a bullish view on BSE, predicting a substantial 150 percent increase in earnings for the fiscal year 2024, with expectations of a doubling effect by fiscal year 2026. The stock exchange reported a significant increase in net profit and revenue in the September quarter, signaling strong financial health.

Strong Fundamentals and Derivatives Market Growth

Jefferies highlighted the exceptional investment opportunity in Indian exchanges, citing the country’s solid economic fundamentals and growing equity market participation. The brokerage emphasized the resilience of exchanges against fee compression risks and the significant growth in derivatives trading. The BSE’s derivatives market share has seen a dramatic increase, driven by successful product launches. This growth is expected to significantly enhance the exchange’s revenue composition, with derivatives income projected to form a larger portion of total revenues in the coming years.

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