MOSL: BSE (Buy)-Subdued markets weigh upon earnings; Emergence of new revenue streams like MF platform is positive
BSE: Subdued markets weigh upon earnings; Emergence of new revenue streams like MF platform is positive
(BSE IN, Mkt Cap USD0.6b, CMP INR822, TP INR950, 15% Upside, Buy)
- 1QFY19 results below expectations: BSE’s 1QFY19 consol. revenue grew 8% YoY to INR1.19b, below our estimate of INR1.21b, led by (i) a 14% YoY decline in transaction charges because of depreciation in small and midcap equities and (ii) lower book-building charges due to lower new issues. EBITDA margin of 16.3% missed our estimate by 170bp due to the revenue miss; expenditure was in line with our estimate on an absolute basis. Although investment income was below expectations, adj. PAT was to the tune of the miss on EBITDA because of a lower ETR. PAT of INR473m declined by 5% YoY (est. of +7% YoY).
- New segments continue building momentum: INX saw the highest number of trades in a day of 62,222 on 18th July 2018. Similarly, the performance in the MF platform has been encouraging. BSE has started to monetize the platform and booked revenue of INR52m from it this quarter. Total transaction value was up 14% YoY and the number of orders was higher by 152% YoY in 1QFY19. BSE is also on track to commence commodity trading starting 1st October on getting the necessary regulatory approvals.
BSE Limited (BSE) is an India-based stock exchange company. BSE provides a transparent market for trading in equity, debt instruments, derivatives and mutual funds. The Company consists of two business segments: Stock Exchange activity and Depository activity. Stock exchange activity is engaged in facilitating trading of securities and the activities incidental there to, and Depository activity provides depository-related services. It also has a platform for trading in equities of small and medium enterprises (SME). BSE also provides various services to capital market participants, including risk management, clearing, settlement, market data services and education. The Company's subsidiaries include Marketplace Technologies Private Limited, Central Depository Services (India) Limited (CDSL), Indian Clearing Corporation Limited (ICCL) and CDSL Ventures Limited. The Company offers the SCORES system, which is a Web based system where investors can lodge their complaints online.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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