Buy BSE; target of Rs 640: Motilal Oswal
Motilal Oswal is bullish on BSE recommended buy rating on the stock with a target price of Rs 640 in its research report dated August 03, 2020.
August 07, 2020 / 01:55 PM IST
Motilal Oswal 's research report on BSE
BSE’s 1QFY21 reported revenue was below estimates, while the margin was largely in-line. Management’s decision to explore options to unlock value from its Star MF segment is encouraging. Cross-subsidization by NSE has limited monetization opportunities for BSE in the Star MF, INX, and Commodity Derivatives segments in the near term. While the announced additional income streams may be small currently, some of them have the potential to present meaningful opportunity over the long term. We adjust our revenue and margin trajectory to reflect the revised outlook for the Listing Fees sub-segment. Our EPS estimate over FY21–22 remains largely unchanged. Reiterate Buy.
Our SOTP fair valuation of BSE ascribes value to: (i) BSE operations, including cash and margin money income (INR520/share), and (ii) implied value from CDSL’s market price at holding company discount (INR120/share). Our TP of INR640 implies a 25% upside.
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