BSE shares fall 3% despite Q4 profit surge. Should you buy, sell or hold India’s oldest stock exchange?

Shares of BSE slipped as much as 3.3% to their day’s low of Rs 3,832 on the NSE even after India’s oldest stock exchange reported a consolidated net profit of Rs 797 crore for the March quarter of FY26, registering a 61% increase from Rs 494 crore in the corresponding period last year.

Revenue for Q4FY26 rose 85% year-on-year (YoY) to Rs 1,564 crore, compared with Rs 847 crore in the same quarter of the previous financial year. On a sequential basis, BSE’s net profit grew 32% from Rs 602 crore reported in Q3FY26, while revenue increased 26% from Rs 1,244 crore recorded in the October-December quarter.

Transaction charges remained the key driver of growth during the quarter. Revenue from transaction charges surged 114% YoY to Rs 1,311 crore, compared with Rs 953 crore in the year-ago period. On a quarter-on-quarter basis, the figure rose 38% from Rs 612 crore in Q3FY26.

For the full financial year FY26, BSE reported consolidated revenue of Rs 5,148 crore. EBITDA stood at Rs 3,393 crore, while EBITDA margin came in at 48%.

BSE share: Should you buy, sell or hold?

Nuvama Institutional Equities has maintained a ‘Buy’ rating on BSE with a target price of Rs 4,570, implying an upside potential of 15%. According to Nuvama, BSE is expected to see a relatively lower impact from the reduction in weekly contract volumes, as discontinued weekly contracts account for 21.3% of its index options premium volumes, compared with 46.9% for NSE.

The brokerage also believes BSE still has significant headroom to expand its derivatives active customer base, which currently stands at 15 lakh-20 lakh monthly users versus around 42 lakh for NSE. In addition, the brokerage expects higher contract sizes to help lower clearing charges, since these charges are linked to the number of contracts cleared.
Management commentary
Management reiterated that increasing participation in monthly contracts remains a key strategic priority for deepening the derivatives market. Monthly contract volumes increased 5x YoY while index futures volumes rose 3x YoY, albeit on a smaller base.
BSE significantly upgraded trading infrastructure capacity, with ICCL now capable of handling nearly 29,000 trades per second per broker and up to 69,000 peak trades with minimal latency. Management stated these upgrades have helped attract both large and smaller participants.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)