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PL Capital Report
BSE Ltd. could be in focus after PL Capital initiated coverage on the stock with a‘Buy' rating and a target price of Rs 4,850, implying upside from the current market price of Rs 3,999.
The brokerage highlighted the exchange's strong positioning in India's capital market ecosystem, driven by rapid scale-up in derivatives, improving market share, and diversification into high-margin business segments.
Investment rationale
Over the past five years, BSE has undergone a continuous re-rating, supported by market share gains and improving profitability, trading at >49x 1-year forward P/E (BBG).
The brokerage expects valuation to sustain at these levels, supported by structural factors such as-
- duopolistic market structure with high entry barriers,
- healthy profit growth (~27% CAGR over FY26-FY28E) and
- optionality from new derivative products/ colocation revenues.
PL Capital values BSE using a Residual Income framework, with a target price of Rs 4,850 (50x FY28E P/E).
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