Fri Feb 28 07:00:00 UTC 2025: ## BSE Stock Rides Out Market Slump, Driven by Derivatives and Goldman Sachs Investment

**Mumbai, India** – While the December quarter saw a significant 7.3% market slump, leaving many investors in the red, the Bombay Stock Exchange (BSE) emerged as a surprising bright spot. The BSE stock, a key holding for investor Mukul Aggarwal (who saw his portfolio boosted by its 22% surge in Q3FY25), continues to outperform despite a lagging mid- and small-cap market.

A recent ₹401 crore investment from Goldman Sachs further fueled the BSE stock, which is up nearly 7% year-to-date. This rise is attributed to record third-quarter performance, fueled primarily by the success of its BSE Star MF mutual fund distribution platform (a 92% revenue jump). The exchange also achieved all-time high revenue and doubled its year-over-year profit.

However, a closer look reveals a more nuanced picture. Sequential revenue growth slowed to 3.6%, its weakest in six quarters, impacted by decreased cash volume and lower treasury income. A ₹200 crore contribution to the Settlement Guarantee Fund (SGF) also led to a 37% sequential drop in adjusted net profit. While management anticipates reduced SGF contributions in the near term, experts warn of a gradual increase as market share expands.

The current bearish market sentiment, particularly affecting mid- and small-cap stocks (a segment where BSE holds significant share), is expected to negatively impact the exchange’s short-term performance. Analysts predict a 15-25% sequential earnings drop for the March quarter. Overvaluation in these segments, despite recent corrections, adds further pressure.

Despite the challenges, the increased market uncertainty could benefit BSE. Experts suggest that foreign institutional investors (FIIs) might shift towards derivative trading, potentially boosting Q4 revenue. BSE’s strong performance in derivatives, particularly its outpacing of the National Stock Exchange (NSE) in month-on-month growth and record average daily premium turnover, remains a positive factor. Recent regulatory changes, while potentially reducing overall trading volumes, are also expected to lower costs and improve margins.

While the weak market sentiment may dampen retail appetite for IPOs, impacting revenue, analysts believe BSE’s strong fundamentals will limit the extent of any potential downside compared to its mid-cap peers. Long-term growth projections remain positive, with estimates suggesting substantial revenue and earnings per share growth over the next few years.

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