BSE Shares Tumble 4.5% After Jefferies Downgrade
By ThePip Desk
BSE shares dropped 4.5% following a Jefferies downgrade to ‘Underperform’ and a price target cut to Rs 2,940, citing revenue pressures and regulatory changes.
BSE shares experienced a significant decline of up to 4.5% on Monday, extending a four-day losing streak, after Jefferies downgraded the stock. The brokerage firm revised its rating on BSE from “Hold” to “Underperform,” simultaneously reducing its price target.
Jefferies adjusted its price target for BSE from Rs 3,520 to Rs 2,940. This revision also included a cut in the firm’s FY27-29 earnings-per-share (EPS) estimates by 5-12%.
Key Drivers for Downgrade
- Revenue pressure from domestic proprietary traders, estimated by Jefferies to contribute approximately 50% of BSE’s notional turnover.
- Higher securities transaction tax.
- New RBI norms concerning bank guarantees.
- Changes related to the Clearing and Settlement (CAS) system.
The brokerage further highlighted a 12% decrease in BSE’s options average daily traded turnover for August compared to July. Additionally, a slowdown in the exchange’s market-share gains outside T+0 and T+1 trading days was noted.
Analyst Consensus Remains Positive
Despite Jefferies’ bearish stance, the broader analyst consensus tracked by Bloomberg remains largely optimistic on BSE. Out of 18 analysts, eleven currently recommend a “Buy” rating.
- 11 analysts recommend “Buy.”
- 6 analysts suggest “Hold.”
- Only 1 analyst advises “Sell.”
The consensus price target among these analysts stands at Rs 4,014.18. This figure implies a potential upside of approximately 21% from the last regular trade, significantly exceeding Jefferies’ revised target.