BSE shares likely to climb another 40%; NSE's move won't affect the grand old exchange: Jefferies

BSE share price NSE: Shares of BSE, the country's oldest stock exchange, in Wednesday's session (March 13) recouped the previous day's losses only to trade lower by 1 per cent. The stock slipped on Tuesday after its rival NSE announced a cut in transaction charges by 1 per cent in the cash and derivatives market.

The recovery in the BSE stock may partly be attributed to Jefferies retaining a ‘buy’ call on the stock with a target of Rs 3,000, a good upside of 40 per cent from the current levels.

The brokerage on the NSE’s transaction cut sees a 1.3 per cent earnings impact on 9MFY24 on an annualised basis. Further, it views this transaction charge measure as part of a periodic exercise and smaller this time in comparison to FY17 and FY23, signifying a limited appetite to engage in price wars.

Additionally, the brokerage expects the country’s oldest exchange’s product pricing and plans for monetisation of new products to be unaffected by this measure by the rival. 

Fundamentally, the global brokerage is bullish on the company’s prospects and expects over a 2.5 per cent jump in earnings over FY24-26E.

The stock has been a stellar performer, offering a multi-bagger return of 378 per cent in the past one year. The stock’s 52-week low was at Rs 406.2, while its 52-week high was at Rs 2,599.

BSE has a 'buy' rating from seven analysts with an average target of Rs 2815, Trendlyne data shows. The stock commands a decent valuation, with the TTM price to earnings trading below the industry average, as per the data.

In its report dated February 6, HDFC Securities gave a buy rating on the stock with a target price of Rs 3,050.