BSE shares record gains of 589% in last one year; stock hits new all-time high today

BSE shares record gains in Wednesday’s session (April 24) marking its all-time high following over 2 per cent gains. Nevertheless, after hitting a new record high, shares of the country’s oldest and leading stock exchange succumbed to some selling pressure.

At around 12:19 pm, shares of BSE traded in the red, down by nearly 3 per cent at Rs 3108.35 per share.

The shares of the exchange have ruled in the last one year and given over 589 per cent return.

BSE's strong brand equity and diversification efforts bode well for long-term growth.  “The stock's rise of over 600% in the last year raises concerns about potential overvaluation. While the exchange's robust financial performance and increased trading volumes have fueled the rally, such exponential gains would be unsustainable in the long run,” remarks  Atul Parakh, CEO of Bigul.

Moving forward, investors should exercise caution and closely monitor the stock's valuations relative to its fundamentals, he advised.

However, intense competition from other exchanges and regulatory changes could pose challenges.

The consensus recommendation on the stock from 8 analysts is a buy with 6 of them signalling strong buy, Trendlyne data shows. Also, the1-year target of Rs 2815, suggests a downside of around 10 per cent.

The stock trades at a relatively cheap valuation with TTM PE of 55.2 as compared to the industry median.

The company is slated to report its Q4 earnings on May 4.