MOHAMMAD ZIYAUDDIN
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Mumbai: Shares of BSE Limited saw a significant jump on March 18, 2025, recovering from the recent decline witnessed over the past few months. The stock rose by nearly 5%, closing at Rs 4,150, compared to the previous closing price of Rs 3,926.25. This sharp increase came amid a broader stock market rally, which saw the market jump over 1,100 points. The rally in BSE’s stock was largely attributed to a positive report released by global brokerage firm UBS, which gave the shares a ‘BUY’ rating and set an optimistic target price.
Why Did BSE's Shares Rise?
UBS’s ‘BUY’ rating on BSE Limited has provided a much-needed boost to its stock price. The brokerage has set a target price of Rs 5,350 per share, a 35% increase over the current trading price. UBS highlighted that the BSE would benefit significantly from the expected growth in options turnover.
Furthermore, the report suggests that BSE’s revenue and operating margins are likely to improve, with the potential for further gains if the Common Contract Note is approved. According to UBS, BSE’s stock could see a further rise if this regulatory approval happens.
BSE’s Financial Performance at a Glance
- ROCE (Return on Capital Employed): 29.7%
- ROE (Return on Equity): 22.31%
- Market Capitalization: Rs 53,641 crore
- P/E (Price-to-Earnings Ratio): 56.63, which is higher than the industry average of 50.4
- Debt Status: Completely debt-free
- EPS (Earnings Per Share): Rs 69.33
Despite the stock being down nearly 34% from its 52-week high, it has still delivered impressive returns over the long term, including a 94% return over the past year and a staggering 3,400% return over the last five years.
Looking Ahead: What Does the Future Hold for BSE?
BSE Limited is in the midst of a major transformation with a revamped business model, making traditional valuation parameters less relevant. UBS's optimistic outlook reflects the company's growing potential in the evolving stock market landscape. With increasing options turnover and the possibility of regulatory approvals, BSE's future looks promising.
For investors, the current price presents an opportunity, with UBS’s target price offering a 35% upside. The company’s debt-free status, strong ROCE, and ROE provide a solid foundation for its continued growth.
As BSE Limited continues to evolve, investors will be keeping a close eye on its financial performance and any new developments in the stock market, especially the approval of the Common Contract Note. If the market conditions remain favorable, the BSE’s stock could continue its upward trajectory in the coming months.
