Bombay Stock Exchange announced its Q2 results on Tuesday, surpassing the market's expectations.
What Happened: BSE in its September quarter results reported a 187% year-on-year surge in net profit to ₹346.75 crore against ₹120.75 crore reported in the previous year. The company's revenue zoomed 124% from the previous year to ₹813.3 crore.
The transaction charges increased to ₹507.1 crore in the quarter from ₹132.2 crore in the previous year. BSE's average daily turnover ballooned to ₹144 lakh crore in September from ₹26 lakh crore in the same period from previous year.
In the quarter, BSE had increased transaction charges for Sensex and Bankex options to ₹3,250 per crore of premium turnover. Additionally, BSE will discontinue Sensex 50 and Bankex weekly derivative expiries in November after new Securities and Exchange Board of India (SEBI) rules came into force to control the excess trading in futures and options and to bring market stability.
Brokerage Views: Global brokerage firm Jefferies gave the stock an "underperform" call with a target price of ₹3,500. The earnings in the second quarter expanded three times year on year led by strong growth in operational revenue, the brokerage said. This growth was powered by derivatives income and improved operating margins.
The research firm said while the stronger second quarter growth was in expected line, the cost control by the stock exchange came in better than expected. The brokerage firm pointed out that the focus remains on volume impact of SEBI's new futures and options measures from November 20.
The brokerage continues to view near term risk-reward as unfavourable for the company.
Price Action: Shares of BSE were down 0.52% to ₹4654 on Wednesday morning.
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