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Motilal Oswal Report
BSE Ltd. reported a profit after tax of Rs 1.06 billion in Q3 FY24 (23% below our estimate), up 124% YoY but down 10% QoQ, mainly owing to its contribution of Rs 917 million to settlement guarantee fund for the currency derivatives segment.
Operating revenue grew 18% QoQ and 82% YoY to Rs 3.7 billion, broadly in line with our estimate.
After the relaunch, derivative contracts (Sensex and Bankex) are witnessing significant traction from market participants. BSE has increased transaction charges on Sensex options (only on near expiry), with effect from November 01, 2023. Thus, the derivative segment would see strong revenue growth.
We have upgraded our earnings per share estimates by 7%/6% for FY25/FY26 to factor in the higher volume trajectory for its equity derivatives segment.
Reiterate our Neutral rating with a one-year target price of Rs 2,725 (based on 35 times FY26E earnings per share).
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