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.

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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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