BSE share price falls 4% after Bernstein's 'Underperform', MCX shares up for 3rd day

Bernstein has initiated coverage on exchanges  with an 'Underperform' rating on BSE Ltd and an 'Outperform' on Multi Commodity Exchange of India Ltd (MCX), citing diverging volume and earnings trends.

In a report, Bernstein said commodities are at an earlier stage of the participation and growth cycle, while equities face normalisation in market volumes.

The best is behind for BSE, with rapid growth set to normalise as equity-derivatives volumes moderate and market-share gains peak, Bloomberg quoted Bernstein analyst Manas Agrawal as saying in the report.

Following the report, BSE shares fell 3.7 per cent to hit a low of Rs 3,268.20 on NSE. MCX shares rose 0.52 per cent to Rs 3,358.50 and were headed for third straight day of gains.

Impending earnings cuts will likely pressure valuations, the report suggested as Bernstein valued BSE at about 32 times estimated FY28 earnings per share. The foreign brokerage set a target price of Rs 2,820 on the stock, implying a downside of about 17 per cent from Tuesday’s close.

Bernstein, Bloomberg noted, is about 9 per cent behind consensus on BSE’s 2QFY27 volumes and about 2-4 per cent behind on FY27-29 earnings.

For MCX, Bernstein sees “exceptional growth momentum” in contracts traded, with equity derivatives offering a long runway for cross-pollination.

Bernstein's estimates are about 10 per cent ahead of consensus on MCX’s Q2FY27 volumes and FY27 earnings. It values MCX at about 45 times estimated FY28 EPS and suggested a price target of Rs 3,830, which implies 15 per centupside from Tuesday’s close.