At a Glance

BSE Ltd, Asia’s oldest stock exchange, has reinvented itself as a money-printing tech platform with booming earnings, high operating margins, and a stock price that’s up 235% YoY. But with a 86x P/E and 25x book value, is this financial Ferrari overpriced — or just warming up?

📜 1. From Dalal Street Dinosaur to Data Dynamo

Founded in 1875, BSE Ltd isn’t just a stock exchange anymore.

It’s now:

• India’s fastest exchange (6 microseconds latency)
• First listed Indian bourse (2017)
• Operator of multiple businesses: equities, debt, derivatives, SME, mutual fund platforms (StAR MF), data licensing, and insurance broking.

Also, it owns a stake in CDSL (demat infra), India INX (GIFT City), and has a powerful fintech arm brewing.

Basically: NSE’s cooler cousin who’s aged like fine whiskey 🥃

📊 2. The FY25 Numbers – Big, Bold, Beautiful

Let’s look at what’s got investors drooling:

🧾 FY25 (Consolidated) Financials

That’s not growth. That’s financial G-force.

Especially when your costs didn’t even double. This is what operating leverage on digital infra looks like.

💥 3. The Q4 FY25 Knockout Punch

• 📦 Revenue: ₹917 Cr (up from ₹825 Cr in Q3)
• 💸 Net Profit: ₹494 Cr (Q3 was ₹219 Cr)
• 🧠 OPM: 60% — Not a typo.
• 🎯 EPS: ₹12.17 for just one quarter!

In other words: BSE earned more in Q4 than its full-year PAT two years ago.

🧬 4. What’s Driving This Boom?

A few ingredients in this multi-bagger masala:

🔹 Options Trading Boom

• BSE’s new options contracts (especially on Sensex/Bankex) are gaining traction.
• Market share increasing despite NSE dominance.

🔹 StAR MF Platform

• India’s largest mutual fund transaction platform.
• Used by thousands of distributors & IFAs.
• Growing rapidly with SIP flows.

🔹 Data Monetization

• Real-time feeds, analytics, benchmark indices = $$ from fintechs, brokers, media.
• Gross margin on this? Basically 100%.

🔹 Zero Debt, High Cash Reserves

• Zero borrowings, high-quality balance sheet.
• Cash flow positive every year since IPO.

📈 5. Valuation – Bubble or Brilliance?

Let’s crunch it:

So yes — it’s expensive AF.

But compared to say… CME Group or Nasdaq, global peers trade at similar valuations (P/E 40–60), and they’re not growing at 100% YoY.

If you think India’s options, mutual fund, and retail investing boom continues — BSE might deserve this tag.

🔁 6. The CDSL Connection (And the Hidden Bonus)

BSE owns ~20% stake in CDSL — the depository giant.

• CDSL has a ₹37,000 Cr market cap
• BSE’s share = ~₹7,400 Cr

That means ~6.5% of BSE’s own market cap is just its holding in CDSL.

Talk about embedded alpha 🧠

📉 7. Risks and Red Flags

Let’s not get high on our own supply:

• ❗ Regulatory Risk: SEBI can cut MF charges, lower exchange fees.
• ⚠️ NSE Dominance: Still the king in derivatives. If NSE slaps hard, BSE could lose gains.
• 🧾 P/E > 80: You need perfection going forward. No hiccups allowed.

Also, FIIs hold just 16.78%, suggesting institutional money isn’t going all in yet.

🧮 Fair Value Range

Let’s be conservative. Assume ~30% EPS growth over 2 years.

• FY27 EPS = ₹55–₹60
• P/E range = 45–50x

Fair Value Range = ₹2,475 to ₹3,000

At ₹2,786 — it’s fairly valued to mildly stretched.

But hey, in Indian bull markets, valuation is just… a mood.

🔚 Verdict: India’s Nasdaq Is Having Its Moment

• ✅ Debt-free digital infra business
• ✅ Wild profit growth
• ✅ Embedded optionality in MF, data, derivatives
• ❗ High valuation, but supported by real earnings

If NSE ever lists, there’ll be a direct comparison. Until then — BSE is the only exchange bet on Dalal Street.

✍️ Written by Prashant | 📅 June 24, 2025

Tags: BSE Ltd, Bombay Stock Exchange, StAR MF, CDSL, derivatives trading India, exchange stocks, Indian stock market infrastructure, NSE vs BSE, financial services stocks, EduInvesting