Shares of BSE were gaining on Tuesday after the company received a huge thumbs-up from analysts.
What Happened: After a remarkable 290% surge this year, BSE has received a strong call from analysts at Jefferies, who project a 24% rally in the coming year. The brokerage firm anticipates a staggering 150% earnings surge for the stock in FY24, doubling over FY26.
Jefferies highlights Indian exchanges as a compelling investment opportunity, attributing this to the country’s robust fundamentals, including economic growth, expanding market capitalization relative to gross domestic product and increasing participation in equity markets.
Derivatives For The Win: Jefferies underscored the substantial growth in derivatives trading as a primary revenue stream for exchanges. BSE’s announcement in May to relaunch Sensex and Bankex F&O contracts has led to significant month-on-month growth in the derivatives market, with BSE’s derivatives market share surging from less than 1% to 14% in the last six months, the brokerage said.
The rapid expansion of derivatives is identified as a key driver for recent earnings upgrades and the stock’s impressive performance.
In its bottom line, Jefferies initiated its coverage of the stock with a “buy” recommendation with a price target of ₹2,700, citing the stock’s comparatively lower forward price-to-earnings ratio against other market players, signaling a potentially lucrative investment opportunity.
Price Action: BSE’s share price was up 5.2% at ₹2,283.60 in early trade on Tuesday.
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