BSE (BSE)

FairStock Score: 55/100 — STEADY

Score breakdown: P/E: 0/3 · ROCE: 2/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Wide economic moat: network effects, liquidity begets liquidity, and a near-regulatory duopoly in India.
• Exceptional profitability: ROE of 49.60% and ROCE of 46.57% with zero debt.
• Rapid growth: 5-year revenue CAGR of 38.51%, latest sales up 54.39% and profit up 134.49%.
• Strong financial health: Piotroski F-Score 7/9 and Altman Z-Score 8.02 indicate low bankruptcy risk.
• Latest-quarter conversion: ₹1,244 Cr revenue produced ₹597 Cr net profit, roughly 48% margin.

Concerns

• Price has left safety behind: P/E 50.54, P/B 31.88, Graham Number ₹363.33, and margin of safety -645%.
• Negative free cash flow of -₹344 Cr despite stated profits; earnings quality and cash conversion need scrutiny.
• Low dividend yield of 0.22% gives shareholders little compensation for valuation and market-cycle risk.
• PEG of 2.72 suggests growth is already priced in; exchange revenues are cyclical and volume-driven.

AI Analysis

BSE is exactly the kind of business I like to study—a durable exchange franchise with network effects and high barriers to entry. More trades attract more liquidity; market participants need a central, trusted venue. The financial numbers tell me it is a high-quality operation: no debt, return on equity of 49.60%, return on capital employed of 46.57%, a Piotroski score of 7/9, and an Altman Z-score of 8.02. Growth has been exceptional—five-year revenue CAGR of 38.51%, sales up 54.39%, and profit up 134.49%. The latest quarter converted ₹1,244 Cr of revenue into ₹597 Cr of net profit, a nearly 48% margin. But investment is about price and value. At ₹3,463, the market cap is ₹1.10 lakh crore—more than 50 times earnings and nearly 32 times book value. Graham's number says intrinsic value is ₹363.33; even allowing for the superior franchise, the margin of safety is deeply negative at -645%. The FairStock score of 55 'Steady' does not rescue an overvalued security. Moreover, despite strong accounting profits, free cash flow is -₹344 Cr, and the dividend yield is a token 0.22%. This is a cyclical, volume-driven business; an economic slowdown or shift to NSE can compress earnings at high multiple. In Buffett's terms: a wonderful business can still be a poor investment at the wrong price. I would wait for a meaningful pullback or for earnings to catch up to the valuation. No amount of quality justifies paying full price.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer