BSE Stock Drops 2% Despite Decent Q4 Earnings; Jefferies Cites Near-term Concerns
Jefferies says, near-term margins face headwinds from higher regulatory fees from Sebi
The stock of Bombay Stock Exchange (BSE) slipped more than 2 per cent in the Thursday trading session despite a 70 per cent surge in the exchange’s fourth quarter (Q4) results of FY 2023-24.
BSE stock traded with 2.04 per cent loss at Rs 2736 in the morning session on the National Stock Exchange (NSE).
BSE clocked highest-ever revenue of Rs 1,618 crore in FY 2023-24 with 70 per cent growth from Rs 954 crore in FY 2022-23. The firm also declared a dividend of Rs 15 per equity share for FY 2023-24.
"I am happy to say that we have done well in our objective of a vibrant trading platform. We have created a strong portfolio of businesses, a rapid pace of innovation, and a strategy that is well understood. Now it's time to widen and deepen our existing product offerings, and we feel that we are on the right track" said Sundararaman Ramamurthy, MD and CEO, BSE.
The net profit of the exchange has also increased to Rs 404 crore in FY24, by 97 per cent as compared to the previous fiscal year.
During FY24, BSE executed trades for a total of 11.3 billion contracts in the equity derivatives segment, since its relaunch on 15 May 2023, resulting in a total revenue of Rs 176 crore. The average daily turnover in the equity cash segment at BSE stood at Rs 6,622 crore compared to Rs 4,132 crore in the previous year.
In an analyst note, brokerage firm Jefferies said, “Near-term margins face headwinds from higher regulatory fees from Securities and Exchange Board of India (Sebi), while medium-term outlook remains healthy.”
The brokerage firm also maintained its ‘hold’ on BSE stock and increased the target price by 10 per cent to Rs 3,100.
The stock despite a hit from Sebi delivered more than 23 per cent returns year-to-date (YTD) against the benchmark index, Sensex YTD returns of merely 1 per cent.
