Shares of BSE jumped almost 4% to its record high of ₹4,032.9 on the NSE, crossing the ₹4000-mark for the first time ever after the Indian government hiked import duty on gold and silver. This is the second straight session of gains for the stock.
The government has increased the basic customs duty on several categories of gold and silver imports to 10% from 5%, along with the Agriculture Infrastructure and Development Cess (AIDC) of 5%, taking the total effective import tax to 15%.
The government’s move is aimed at curbing precious metal imports, narrowing the trade deficit and supporting the rupee.
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BSE’s share price surged to a record high after the Indian government increased the import duty on gold and silver. Higher bullion prices can lead to increased trading activity, which benefits exchange-related companies like BSE as their revenues are linked to trading volumes.
The hike in import duties on gold and silver indirectly supports BSE’s stock price. Increased import tariffs lead to higher domestic gold and silver prices, attracting more traders and investors to commodity and derivatives markets, thereby boosting trading volumes for BSE.
BSE reported a consolidated net profit of ₹797 crore for the March quarter of FY26, a 61% increase year-on-year. Revenue jumped 85% year-on-year to ₹1,564 crore, with transaction charges being the primary driver of growth.
The hike in import duties on gold and silver could lead to higher retail jewelry prices and potentially impact business by up to 10%, affecting the employability of the workforce. However, some suggest artisans could shift to other segments like imitation jewelry, and leveraging existing household gold could reduce import dependence.
Gold financier stocks rose because the jump in gold prices increases the value of collateral pledged for gold loans. This improves loan-to-value ratios and expands lending capacity, while also potentially increasing demand for gold-backed loans, thereby boosting revenue and profits for these companies.
Following the government’s move, which came into effect on 13 May, gold June futures on MCX surged 6% while silver July futures vaulted 7% despite apprehensions that increased import tariffs will hit retail demand. However, it fell in today’s deals on profit booking.
Why did BSE stock rise?
The sharp increase in import duties on gold and silver indirectly supported the share price of BSE because higher bullion prices usually lead to a rise in trading activity across financial markets. When the government raises import tariffs, domestic gold and silver prices tend to surge as imported precious metals become more expensive. Such sharp price movements often attract traders and investors looking to benefit from volatility, leading to increased participation in commodity and derivatives markets.
Higher market activity generally benefits exchange-related companies because their revenues are closely linked to trading volumes and transaction charges. Investors may therefore turn positive on stocks such as BSE and Multi Commodity Exchange of India during periods of heightened commodity volatility. While MCX is the more direct beneficiary because of its dominance in commodity futures trading, broader sentiment around rising market participation and stronger trading turnover can also lift capital market infrastructure stocks such as BSE.
BSE Q4 Results
BSE delivered a strong financial performance for the March quarter of FY26, reporting a consolidated net profit of ₹797 crore, marking a 61% year-on-year increase from ₹494 crore posted in the corresponding quarter last year.
The exchange’s revenue for Q4FY26 jumped 85% year-on-year to ₹1,564 crore compared with ₹847 crore in the same period of the previous financial year. Sequentially, net profit rose 32% from ₹602 crore reported in Q3FY26, while revenue increased 26% from ₹1,244 crore recorded in the December quarter.
Transaction charges continued to remain the biggest contributor to growth during the quarter. Revenue generated from transaction charges surged 114% year-on-year to ₹1,311 crore against ₹953 crore in the year-ago quarter. On a quarter-on-quarter basis, transaction charge revenue climbed 38% from ₹612 crore reported in Q3FY26.
For the full financial year FY26, BSE reported consolidated revenue of ₹5,148 crore. EBITDA for the year stood at ₹3,393 crore, while EBITDA margin came in at 48%.
The management said expanding participation in monthly contracts continues to remain a major strategic focus area for strengthening the derivatives segment. During the quarter, monthly contract volumes increased fivefold year-on-year, while index futures volumes rose three times year-on-year, although on a relatively smaller base.
BSE share: Should you buy, sell or hold?
Brokerage firm Nuvama Institutional Equities maintained its ‘Buy’ recommendation on BSE with a target price of ₹4,570 per share, indicating a potential upside of around 15% from current levels.
According to the brokerage, BSE is likely to face a comparatively lower impact from the reduction in weekly contract volumes because discontinued weekly contracts contribute only 21.3% to its index options premium turnover, significantly lower than the 46.9% contribution for National Stock Exchange of India.
Nuvama also highlighted that BSE continues to have substantial scope to expand its derivatives customer base. The exchange currently has around 15 lakh to 20 lakh monthly active derivatives users, compared with nearly 42 lakh monthly users on NSE.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
