Value of any company is the present value of all future cash flows. P/B in my opinion is not the right way to value this company, especially since it pays out 60-70% of profits as dividends and has no reinvestment use for any profit it generates. Book value compounding will always be lower than the underlying performance of the business due to dividend payout. The hit to the future cash flows is to the order of 180 cr, assuming timely delivery of the new platform: about 2.5% of the then prevailing market cap. That is why I believe items of this nature which are temporary in nature have little bearing on the long term value of the company; however they dominate the narrative. 75-80% of the questions on the previous concall were about the software platform that has little to no bearing on the value of the company.
In the meanwhile, it was good to see Options Volumes rebound in February. Highest ADTV till date and highest volumes till date despite Feb having fewer trading days. As the company launches new contracts, and brings duration of the contracts down further to forthnightly and eventually weekly; there can be a huge jump in options volumes. Most of NSEs volumes come in options with weekly expiries.
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