Shares of the Bombay Stock Exchange (BSE) took a significant hit on Monday, tumbling 7% to ₹1,046.55, after global brokerage firm Jefferies downgraded its rating to “underperform” from “hold”. This downgrade was primarily driven by expensive valuations.
Jefferies cited BSE’s lofty valuations as a major concern, noting that the exchange’s price-to-earnings ratio is significantly higher than its global peers. The brokerage firm also expressed concerns over increasing competition from rival exchange NSE.
The downgrade led to a sharp decline in BSE’s stock price, with the shares opening at ₹1,133.90 and slipping to an intraday low of ₹1,035. The stock has been under pressure in recent times, with investors booking profits amid concerns over valuations.
Analysts at Jefferies reduced their target price for BSE to ₹960 from ₹1,100, citing the exchange’s expensive valuations and limited growth prospects. The brokerage firm also highlighted the risks associated with increasing competition and regulatory challenges.
BSE’s valuation multiples have been a subject of debate among analysts, with some arguing that the exchange’s strong market position and diversified revenue streams justify its premium valuation. However, others contend that the valuations are overstretched and due for a correction.
The downgrade by Jefferies is likely to spark a wider debate on BSE’s valuation and growth prospects. Investors will closely watch the exchange’s performance and regulatory developments in the coming months.
BSE Shares Plummet 7% After Jefferies Downgrades Rating
Shares of the Bombay Stock Exchange (BSE) took a significant hit on Monday, tumbling 7% to ₹1,046.55, after global brokerage firm Jefferies downgraded its rating to “underperform” from “hold”. This downgrade was primarily driven by expensive valuations.
Jefferies cited BSE’s lofty valuations as a major concern, noting that the exchange’s price-to-earnings ratio is significantly higher than its global peers. The brokerage firm also expressed concerns over increasing competition from rival exchange NSE.
The downgrade led to a sharp decline in BSE’s stock price, with the shares opening at ₹1,133.90 and slipping to an intraday low of ₹1,035. The stock has been under pressure in recent times, with investors booking profits amid concerns over valuations.
Analysts at Jefferies reduced their target price for BSE to ₹960 from ₹1,100, citing the exchange’s expensive valuations and limited growth prospects. The brokerage firm also highlighted the risks associated with increasing competition and regulatory challenges.
BSE’s valuation multiples have been a subject of debate among analysts, with some arguing that the exchange’s strong market position and diversified revenue streams justify its premium valuation. However, others contend that the valuations are overstretched and due for a correction.
The downgrade by Jefferies is likely to spark a wider debate on BSE’s valuation and growth prospects. Investors will closely watch the exchange’s performance and regulatory developments in the coming months.
The decline in BSE’s shares also had a ripple effect on the broader market, with the BSE Sensex declining 0.5% and the Nifty 50 Index slipping 0.3%. Other stocks in the financial services sector also witnessed selling pressure.
Overall, the downgrade by Jefferies has raised concerns over BSE’s valuation and growth prospects, and investors will be watching the exchange’s performance closely in the coming months.
