Neutral BSE; target of Rs 680: Motilal Oswal

Motilal Oswal's research report on BSE

BSE reported an operating revenue growth of 13% YoY (down 10% QoQ) to INR1.7b in 1QFY23. Revenue was broadly in line with our estimate. Operating expense stood at INR1.3b in 1QFY23, 2% higher than our estimate, on account of higher technology cost. PAT fell 23% YoY and 44% QoQ to INR400m in 1QFY23. While BSE has multiple levers for growth from a surge in Star MF revenue to scale up of operations in new areas such as INX, Power Exchange, Spot Gold, among others, we find valuations fair at 32.4x FY24E P/E. We maintain our Neutral rating.

Outlook

We find valuations reasonable and assign a Neutral rating with a one-year TP of INR680 (based on SoTP valuation). The slight increase in our TP is led by roll over to Sep’24E for its core earnings, but was offset by a cut in our estimates.

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BSE - 040822 - moti