Bombay Stock Exchange Limited- Information.

Bombay Stock Exchange Limited.

  • Reiterate Buy: 860/-
  • Target: 1280 /-
  • Holding Period: 6 Months.

COMPANY OVERVIEW:

BSE (formerly known as Bombay Stock Exchange Ltd.), is Asia's first & the Fastest Stock Exchange in the world with the speed of 6 microseconds and one of India's leading exchange groups. The bourse was established as "The Native Share & Stock Brokers' Association" in 1875. Over the past 141 years, BSE has facilitated the growth of the Indian corporate sector by providing it with an efficient capital-raising platform. With over 5800 companies listed on the main board, it is the largest exchange by a number of listed companies. Today BSE provides an efficient and transparent market for trading in equity, currencies, debt instruments, derivatives, mutual funds.

BSE provides a host of other services to capital market participants including risk management, clearing, settlement, market data services and education. It has a global reach with customers around the world and a nation-wide presence. BSE systems and processes are designed to safeguard market integrity, drive the growth of the Indian capital market and stimulate innovation and competition across all market segments. It also has a platform for trading in equities of small-and-medium enterprises (SME). India INX, India's 1st international exchange, located at GIFT CITY IFSC in Ahmedabad is a fully owned subsidiary of BSE. BSE is also the 1st listed stock exchange of India. It is also the first Exchange in the country and second in the world to receive Information Security Management System Standard BS 7799-2- 2002 certification for its On-Line Trading System (BOLT). It operates one of the most respected capital market educational institutes in the country (the BSE Institute Ltd.). BSE also provides depository services through its Central Depository Services Ltd. (CDSL) arm.

BSE's popular equity index - the S&P BSE SENSEX - is India's most widely tracked stock market benchmark index. It is traded internationally on the EUREX as well as leading exchanges of the BRCS nations (Brazil, Russia, China and South Africa). BUSINESS: BSE source of revenue are Listing & corporate fees, transaction charges and depositary charges. It also earns from data selling and treasury income. Among this, transaction charges depend upon the market condition whereas listing & corporate fees are stable and annuity income for the company. Other income is a significant part due to a high level of cash and investments.

Recently BSE has further monetized its stake in CDSL in accordance with the regulatory requirement to 24% from recent IPO since then CDSL become an associate company. Its 24% stake will continue to add value to the company. BSE promoted India International Exchange (India INX) commenced operations in January 2017. India INX provides state of the art electronic platform to facilitate trading, clearing and settlement of the widest range of global benchmark products across all major asset class, including securities, equity derivatives, precious metals, energy, agricultural commodities, interest rates, currencies etc.,

FINANCIAL HIGHLIGHTS:FY 2016FY 2017FY 2018
Total Income Crore 670618698
Net Profit Excluding CDSL Gain Crore132179237
EPS Before Extraordinary Income Rupees31.735.143.8
Book Value Rupees469488580
Dividend Rupees7.52836

INVESTMENT RATIONALE:

BSE Ltd is the oldest stock exchange in Asia and currently holds the global No.1 ranking in terms of highest number of companies listed, and rank No.10 in World by market capitalization. BSE is a professionally managed with the capable management team. With diverse revenue source, the management team is trying hard to improve its market share in equity. The company has 13% market share in Equity cash while in currency and interest rate derivatives it has 46% and 41% respectively. In emerging segments like Mutual Fund business, it has 76% market share through its STAR MF platform. With equities as an asset class is getting more acceptances among Indian savers the scope for a higher transaction in stock exchanges and mutual fund platform is high.

It has a strong balance sheet with huge cash and bank balances which implies higher other income will continue in future. Due to surplus cash in a balance sheet, the company is doing the market buyback of its own shares. Till Date Company has bought back 16.79 lakh shares at an average price of 815 and has used 82.5% of its earmarked buyback amount. Dividend payout is expected to be good in coming years as a capital requirement in future is less. Also, BSE has applied for commodity exchange business and likely to start in latter part of the current financial year once it gets approval. Since our last recommendation in last year, the stock has corrected and currently, BSE is trading around 20 times trailing twelve-month earnings which appear cheap considering its growth potential and cash in a balance sheet. We expect profitability from core business to improve consistency in coming years and advise investors to average their buy at the current rate.

SHAREHOLDING PATTERN:

Shareholding Pattern as on March 2018Percentage
INSTITUTIONS 
Mutual Funds           5.92
FPI           8.97
Insurance Companies           4.81
Bodies Corporate           9.10
NON-INSTITUTIONS 
Any others          14.78
Public, TM & others          56.42
Stock Details
NSE SYMBOLBSE
FACE VALUE Rs.         2
EPS Rs.      43.8
Book value Rs.      580
Market Price Rs.      860

 

 

 

 

Prepared By:

Disclaimer: Capstocks & Securities (India) Pvt. Ltd (hereinafter referred to as “Capstocks”) is a registered Member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited and MCX Stock Exchange Limited. Capstocks registered as a Depository Participant with CDSL, Portfolio Manager with SEBI, and Mutual Fund Distributor with AMFI. Capstocks has made an application with SEBI for registering as a Research Entity in terms of SEBI (Research Analyst) Regulations, 2014. This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Capstocks or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.

Disclosure: I, Karthic Babu T.R.S, hereby certify that all of the views expressed in this research report accurately reflect my views about the subject issuer(s) or securities. I also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Research Analyst or his/her relative or Capstocks does not have the financial interest in the subject company. Also, Research Analyst or his relative or Capstocks or its Associate do not have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. Further Research Analyst or his relative or Capstocks or its associate does not have any material conflict of interest. Capstocks / Analyst has not served as an officer, director or employee of the company covered by Analyst and has not been engaged in market making activity of the company covered by Analyst.

-Courtesy Capstocks, Thiruvananthapuram.

Fashion

Mar 162019
"Indian clients want good designs at a good price, especially in the luxury market.

Entertainment

Sep 172019
തൃശൂർ വീഥികളിൽ   കാടുകൾ വിട്ടിറങ്ങിയ പുലികൾ രൗദ്രതാളമാടീ ... നഗരം പ്രൗഢോജ്വലമായ മഹാസമുദ്രത്തിൽ നീരാടീ .... പല വർണ്ണ പുലികൾ വയസ്സൻ പുലി കുട്ടി പുലി കരിം പുലി