Estimates given by three brokerages have pegged the profit after tax growth at 46%-64% on a year-on-year basis, falling in the range of Rs Rs 506 crore to Rs 529 crore. Meanwhile, a revenue uptick of 36%-41% YoY is estimated.
The estimates given by Centrum Broking, Nuvama Institutional Equities and Motilal Oswal Financial Services (MOFSL) have been taken into account.
Focus will remain on the exchange’s growing market share in index options, regulatory developments from SEBI, and trends in operational costs.
The brokerages will analyse BSE’s Q2 show based on these 5 metrics:
1. PAT
Brokerages expect BSE’s profitability to remain robust though with signs of sequential moderation.– Nuvama projects PAT at Rs 529 crore, up 64% YoY and 3% QoQ.– Centrum Broking expects PAT at Rs 506 crore, up 46% YoY but down 4% QoQ.
– Motilal Oswal pegs adjusted PAT at Rs 508 crore, a 47% YoY increase. This brokerage expects profitability to improve on account of a decline in regulatory and clearing costs.
2. Revenue
Top-line performance is expected to stay healthy, led by increased F&O activity and higher cash market participation.
– Centrum forecasts total revenue at Rs 1,153 crore, up 41% YoY and 10% QoQ.
– Nuvama estimates revenue at Rs 1,046 crore, up 40% YoY and 9% QoQ.
– Motilal Oswal sees a slightly lower revenue estimate of Rs 1,014 crore, still marking 36% YoY growth. It said that the continued momentum with respect to new listings will likely boost company’s revenue from service to corporates.
3. EBITDA
The Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) is seen rising sharply on a yearly basis, though sequential growth is likely to moderate.
– Centrum expects EBITDA of Rs 725 crore, up 57% YoY and 2% QoQ.
– Nuvama pegs it at Rs 658 crore, up 69% YoY and 5% QoQ.
– Motilal Oswal forecasts Rs 630 crore, up 62% YoY.
4. EBITDA margin
– Centrum estimates EBITDA margin at 63%, an expansion of 647 bps YoY but a 533 bps QoQ decline.
While higher revenues support annual growth, increased operational expenses are seen capping margin expansion quarter-on-quarter.
5. Key monitorables
Brokerages have highlighted multiple factors to watch out for, including market share trends in equity index options and cash segment.
Updates on Sebi’s discussion paper regarding tenure adjustments for equity derivatives and impact of operating expenses and clearing cost reductions on margins.
Nuvama also puts cash market share improvement and update on SGF contribution as key monitorables for investors.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)