Shares of BSE Ltd were surging on Thursday following an upgrade in rating by brokerage firm Investec.

What Happened: The global brokerage upgraded the stock exchange operator to “buy.” The brokerage also assigned a price target of ₹2,800 for the stock, indicating an upside potential of around 38% from the previous close.

Investec cited strong traction in equity derivatives volumes, expectations of market share gains and stabilisation in metrics as factors driving the upgrade.

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Strong Underpinnings: BSE continued to experience robust traction in equity derivatives volumes, with its option market share jumping three times quarter-on-quarter to over 15% in March, the firm noted. Additionally, the company has managed to reduce clearing charges paid to NSE by 30% on a quarter-on-quarter basis, per ₹10 lakh, the brokerage noted.

Encouraged by these positive indicators, Investec anticipates further market share gains for BSE, particularly with the rapid scale-up of the BANKEX product. It also expects an improved margin profile in Q4 as metrics stabilise.

Price Action: BSE’s share price was up 8.2% at ₹2,199.95 in afternoon trade on Thursday.

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