BSE Ltd shares slip 9% on Q4 earnings2 min read . Updated: 22 May 2020, 01:54 PM IST
- At 01:15 pm, shares of BSE Ltd were trading at ₹395.25 down 8.8% from its previous close on NSE, while the benchmark index, Nifty fell 1% to 9,005.45 points
MUMBAI : Shares of BSE Ltd fell as much as 9.17% on Friday after it reported a net loss of ₹1.94 crore in the fourth quarter ended 31 March, against a net profit of ₹51.86 crore in the year-ago period.
At 01:15 pm, shares of BSE Ltd were trading at ₹395.25 down 8.8% from its previous close on NSE, while the benchmark Nifty fell 1% to 9,005.45 points.
“We expect revenue growth of 6.4/12.2% in FY21/22E led by rebound in transaction revenue and increase in listing fees. We expect operating leverage with growth (EBITDA margin of 5.3/12.8% for FY21/22E). BSE has net cash of ₹18bn (~91% of MCap) and a dividend yield of ~4%, which limits downside," analysts at HDFC securities said in a note. The brokerage has put ‘add’ rating to the stock.
"BSE is trying to fight back and build the derivative volume through liquidity enhancement schemes, but it’s still early days. New initiatives like Insurance platform, currency trading in international exchange sounds promising and StAR MF platform is witnessing strong volume growth 60% YoY in FY2019-20" it added.
Company's total income dropped 14.44% to ₹155.79 crore in the fourth quarter ended March 31, 2020, from ₹182.08 crore in the same period of the previous fiscal.
The board of directors of BSE has recommended a final dividend of ₹17 per equity share,subject to the approval of shareholders in the ensuing annual general meeting.
Ashishkumar Chauhan MD and CEO of BSE said “With a cumulative trading volume of $822 billion since launch and international debt MTN (medium term note) programme of about $48 billion, India's INR-USD derivative is expected to attract more participants to the IFSC and make India international exchange a leading centre for raising capital for issuers across the globe,".
For FY20, BSE Ltd posted a drop of 39.48% net profit to ₹120.61 crore as compared to ₹199.28 crore in 2018-19. Total income declined 8.36% to ₹630 crore from ₹687.44 crore.
"BSE is centered on the buyback at low valuations and option value from new segments Star MF platform, commodities and international exchange over and above the sum of the parts (SOTP) value of its businesses. SOTP fair valuation of BSE ascribes value to core operations ex-cash income, implied value from Central Depository Securities Ltd’s market price at holding company discount at ₹75 per share and float income from encumbered/margin money at ₹140 per share" wrote analysts at Motilal Oswal Financial Services in their post-result report.They maintain a buy rating on the stock.