BSE share price skyrockets 11% as net profit triples in June quarter

Shares of Bombay Stock Exchange (BSE), one of the Asia's oldest stock exchanges, surged by 11% in early morning trading today, reaching ₹2,657 apiece after the company's June quarter results exceeded analysts' expectations, sparking a strong rally in the stock.

On Wednesday, the company reported a more than threefold increase in its consolidated net profit, reaching ₹265 crore for the quarter ended June 2024. In the same quarter of the previous fiscal year, the exchange posted a net profit of ₹75 crore.

The company, which generates over 60% of its revenue from transaction charges, saw these charges jump to ₹366 crore in Q1 FY25, compared to ₹66 crore in the same period last year. This propelled BSE to record its highest-ever quarterly revenue of ₹607 crore, with total income rising to ₹674 crore.

The average daily turnover in the equity cash segment for the first quarter of FY25 stood at ₹9,006 crore, compared to ₹4,025 crore in the corresponding quarter of the previous year. BSE entered the single stock derivatives market on July 1, 2024, with a mid-month expiry on the second Thursday of each month. So far, 155 members have participated in single-stock futures and 35 in single-stock options.

The market capitalisation of BSE-listed companies reached a record of $5.27 trillion during the June quarter. In the equity derivatives segment, the average daily turnover hit a record high of ₹97.64 trillion in Q1 FY25, with 136.3 million average daily contracts. The average daily premium stood at ₹84,534 million, as per the company's earnings filing. 

Why are shares on the rise?

The company's shares have been on an upward trend in recent sessions, driven by SEBI's proposal to limit the activity in options trading by restricting weekly contracts to just one sub-index per exchange.

Currently, NSE, India's leading exchange, offers four weekly options contracts, whereas BSE provides only two. If SEBI's proposal is enacted, it may result in the removal of three out of the four weekly options contracts on NSE.

This change could potentially eliminate weekly options contracts on the Nifty 50, Nifty Bank, Nifty Financial Services, and Nifty Midcap Select indexes. Analysts at Investec and Jefferies indicate that if the options volumes from the removed NSE contracts spill over, BSE could see a rise in its market share.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.