BSE ltd. "Volatility induced volumes; downgrade to Neutral" (Neutral) Toshniwal

Research evidence excerpt

BSE ltd. "Volatility induced volumes; downgrade to Neutral" (Neutral) Toshniwal

R MF platform (6%) is projected at 15%. Listing and book-building fees (11%)

03/26E 62.41 60.96 -2 60.61

and cash markets (5%) are forecasted to grow at 9% and 11% CAGR, respectively. Total

03/27E 73.77 83.80 14 81.41

revenue CAGR is estimated at 24%, with operating margins rising to ~68.1% by FY28E

03/28E 86.44 98.14 14 96.45

from 65.7% in FY26E.

Neeraj Toshniwal

Management commentary remains optimistic of the probable opportunity Analyst

neeraj.toshniwal@ubs.comManagement reports improved liquidity from Thursday expiry transitions, driven by

+91-22-6155 6058

broader participation and higher non-expiry day volumes. Monthly derivatives

penetration (~5%) remains low but offers growth potential as institutional participation

and long-duration strategies expand, keeping premium-to-notional ratios below peers.

Next-week contract participation rose to 15% in April 2026 from 5% in April 2025,

while long-term contract market share grew from 0.2% in April 2025 to 1.2% in April

2026. Efforts prioritize enhancing market participation through broker additions,

increased FPI involvement, and longer-tenor product development over market share

growth. In the cash segment, market share improved to ~7%, but structural challenges,

such as delays in smart order routing (SOR) adoption, constrain further progress.

Valuation: Downgrade to Neutral; revised PT of Rs4,500.00 (from Rs3,650.00)

We raise FY27/FY28 revenue/profit estimates by 12%/14%, rolling forward to Sept'27E.

Our SOTP-based PT, including CDSL, implies 46x FY28E P/E (previously 49x FY27E P/E),

slightly below +1SD mean valuations amid higher growth expectations.

Highlights (Rsm) 03/23 03/24 03/25 03/26E 03/27E 03/28E 03/29E 03/30E