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However, the revised target suggested a further upside of 2% from Monday’s closing levels.
Jefferies noted that exchanges are likely to see earnings upgrades. However, brokers may need to implement price hikes to adapt to the evolving market environment.
Capital market regulator SEBI’s new F&O measures have significantly impacted option volumes, leading to a decline of approximately 70% in the number of contracts. Despite this, premiums in January month-to-date (MTD) are down by less than 10%, which is better than Jefferies’ earlier estimate of a 25% decline.
Interestingly, the average ticket size for the industry has tripled in the second week of January 2025, compared to November 2024, following the implementation of higher lot sizes.
However, discount broking volumes could face a hit of over 40%, necessitating significant price hikes to mitigate the impact, Jefferies said.
Recently, another brokerage firm Goldman Sachs initiated coverage on BSE with a ‘Neutral’ rating and a price target of ₹5,060.
GS believes that BSE stands to benefit from strong growth tailwinds in India’s equity capital markets. It noted that robust nominal growth in the earnings of Indian listed corporations acts as a powerful compounding factor.
However, it emphasised that with valuations nearing all-time highs, BSE’s pricing appears aligned with global peers, leaving the risk-reward outlook largely balanced.
At the current levels, BSE has a market capitalisation of ₹69,691.75 crore. On the charts, the stock is neither in the ‘Overbought’ nor in the ‘Oversold’ territory with its Relative Strength Index (RSI) at 46.8. An RSI reading below 30 is considered oversold and above 70 overbought.
Out of the nine analysts that have coverage on BSE, five of them have a ‘Buy’ recommendation, while three have a ‘Hold’ and one say ‘Sell’.
BSE shares closed 0.51% higher on Monday at ₹5,148. The stock has gained 130% in the last one year.
