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Shares of Rail Vikas Nigam Ltd slipped in Thursday’s trade, extending their fall for the second straight session. The stock today fell 3.66 per cent to hit a day low of Rs 100.77. In the previous session, the scrip settled lower at Rs 104.60 after hitting an all-time high of Rs 114.62. The counter has surged 50.69 per cent so far this year and 201.90 per cent in a year.
RVNL, along with some other railway stocks, saw a massive upward move this week after it was reported that Indian Railways would start production of advanced Vande Bharat trains by August this year.
RVNL, last month, emerged as the lowest bidder for manufacturing cum maintenance of Vande Bharat trains along with Russia’s Transmashholding (TMH) as a joint venture partner. In addition, RVNL has been awarded Navratna status by the Finance Ministry. With this, the central public sector enterprise (CPSE) became the 13th Navratna among CPSEs.
Technical analysts suggested booking profits at current levels. Support on the counter could be seen at Rs 100.
Jigar S Patel, Senior Manager – Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, “For the last two months, the said counter has given a 105 per cent return. At the current juncture, fresh buy is not advised at all. In case RVNL corrects to Rs 81 level, then only fresh longs are advisable. As of now wait and watch.”
AR Ramachandran from Tips2trades, said, “RVNL looks bearish and overbought on the daily charts with strong resistance at 115. Investors should book profits at current levels as a close below its support of Rs 100 could lead to Rs 78 in the near term.”
On the flip side, Ravi Singhal, CEO at GCL Broking said, “This is the time in the budget when the most money is spent on railway infrastructure, which will assist this firm enhance its margins and growth. Technically, the breakthrough above Rs 77 looks fantastic. The next target is Rs 188 in the following six months. Maintain stop loss at Rs 75.”
RVNL was last seen trading higher than the 5-day, 20-, 50-, 100- and 200-day moving averages. The counter’s 14-day relative strength index (RSI) came at 84.49. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company’s stock has a price-to-equity (P/E) ratio of 16.84. It has a price-to-book (P/B) value of 3.54.
That said, RVNL has an average target price of Rs 42, Trendlyne data showed, suggesting a potential downside of 59.20 per cent. The scrip has a one-year beta of 0.89, indicating low volatility.
RVNL is an executing arm of Indian Railways and works for and on behalf of the ministry for projects assigned to it for execution. It works on a turnkey basis and undertakes the full cycle of project development from conceptualisation to commissioning including stages of design, preparation of estimates, calling and award of contracts, project and contract management.
Meanwhile, Indian equity benchmarks traded higher in afternoon deals today, extending their climb for the sixth consecutive session. The domestic indices were up today led by buying in automobile, technology and metal stocks
