BSE (BSE IN) – Initiating Coverage – Rising to the Challenge – BUY
Published on 18 Jun 2026
BSE has seen a rapid scale-up in its derivatives business over FY23-26 with premium market share expanding to ~28% in FY26 (vs. nil in FY23). We expect it to increase further with the introduction of new indices. Moreover, steady growth in cash equity/ StAR MF flows and diversification to high-margin segments like colocation, listing and data services are likely to lead to operating revenue CAGR of ~25% over FY26-28E. We expect BSE to maintain superior return metrics, with EBITDA margin/ core RoE of 71%/37% by FY28E, underpinned by strong operating leverage and disciplined capital management. We value BSE using the residual income framework to arrive at a TP of INR4,850 (FY28E P/E of 50x). Initiate with ‘BUY’.
