After 4643% 5-year return, does BSE still offer value for new investors?

Shares of BSE Limited ended at Rs 3,140 on Thursday, down Rs 37.10 or 1.17 per cent. The decline comes after a sharp rally in the counter, which has significantly outperformed in recent months.

The stock has gained 10 per cent in the last one week and over 12 per cent in the past one month. In six months, it is up nearly 32 per cent. On a one-year basis, the counter has surged 76 per cent.

The long-term performance has been even stronger. Over the last five years, BSE shares have delivered an exceptional return of 4,643.92 per cent, turning into one of the biggest wealth creators in the capital market space.

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Q3 earnings back the rally

The recent momentum in the stock is supported by robust December quarter numbers.

For Q3FY26, BSE reported a consolidated net profit of Rs 603 crore, up 174 per cent from Rs 220 crore in the year-ago quarter. On a sequential basis, net profit rose 12 per cent from Rs 538 crore in Q2FY26.

Revenue for the quarter grew 62 per cent year-on-year to Rs 1,244 crore. The strong topline growth was largely driven by transaction charges, which jumped to Rs 952 crore from Rs 511 crore a year ago and Rs 794 crore in the September quarter.

Revenue from services to corporates increased to Rs 156 crore from Rs 150 crore in the year-ago period and Rs 138 crore in Q2FY26. Treasury income from clearing and settlement stood at Rs 42.9 crore, marginally lower than Rs 48 crore reported in Q3FY25.

Derivatives segment remains key driver

The equity derivatives business continued to lead growth.

Options average daily notional turnover (ADNT) doubled year-on-year to Rs 210 lakh crore in Q3FY26, compared with Rs 105 lakh crore in Q3FY25. On a sequential basis, it increased from Rs 164 lakh crore in Q2FY26.

Options premium average daily turnover (ADTV) rose 29.33 per cent quarter-on-quarter to Rs 194 lakh crore. Total options revenue surged 122 per cent year-on-year to Rs 784 crore, reflecting strong traction in the derivatives segment.

Operating EBITDA, including Core SGF, stood at Rs 732 crore versus Rs 235 crore in the year-ago quarter and Rs 680 crore in Q2FY26. The operating EBITDA margin expanded sharply to 59 per cent from 31 per cent in Q3FY25, although it was slightly lower than 64 per cent in the preceding quarter.

The numbers indicate strong operating leverage as higher volumes translated into disproportionate growth in profits.

Sharekhan remains positive

Brokerage firm Sharekhan has maintained a positive view on the stock following the results.

In a post-results note, Sharekhan said BSE remains well positioned for sustained growth, backed by strong traction in the derivatives segment and steady performance across its cash and mutual fund platforms.

The brokerage noted that expansion in the derivatives segment continues to support earnings momentum. Higher volumes in stock options and other derivative products are expected to drive incremental revenue growth.

BSE’s strategic investments in data infrastructure were also cited as a key positive. The exchange has added 80 new co-location racks to enhance trading capacity and latency efficiency. This, the brokerage believes, will improve competitiveness and support higher trading activity.

The company’s push towards product diversification, including focus on commodities and stock options, is likely to strengthen long-term earnings visibility.

Sharekhan noted that BSE stands to benefit from operating leverage as volumes rise. A strong and vibrant IPO pipeline is another structural positive, which could support listing and transaction-related revenues in the coming quarters.

Given these factors, the brokerage maintained its positive view on the stock and revised its price target to Rs 3,600.