On Wednesday, RVNL shares experienced a rollercoaster ride, hitting an all-time high before slipping back into the red. The stock surged by 5.06 per cent during intraday trading, reaching a record high of Rs 359. This impressive gain was short-lived as the stock gave up its entire gains, closing at Rs 341.55, a slight drop of 0.04 per cent.
This dramatic fluctuation came on the heels of some significant developments for the rail PSU. RVNL recently secured an order worth approximately Rs 148.27 crore from South Eastern Railway, a move that initially buoyed investor confidence. The company’s financial performance in the fourth quarter of FY24 also provided a solid foundation for optimism. RVNL’s net profit surged by 33.2 per cent year-on-year, reaching Rs 478.6 crore, while revenue from operations grew by 17.4 per cent to Rs 6,714 crore.
Despite these positive indicators, the stock’s inability to sustain its intraday high underscores the complexities of market sentiment. Analysts have weighed in on this phenomenon, providing a range of perspectives on RVNL’s future trajectory.
Shiju Koothupalakkal observed that RVNL’s stock has shown a notable recovery from its lows near Rs 250. He emphasized that the stock has gained enough strength to breach its previous peak level of Rs 345 on an intraday basis. Koothupalakkal noted that a decisive close above the Rs 345 zone is necessary to confirm a breakout. He identified immediate support at Rs 338, with potential targets of Rs 370 and Rs 395 in the coming days, contingent on maintaining this upward momentum.
Jigar S Patel, Senior Manager and Technical Research Analyst at Anand Rathi Shares and Stock Brokers, shared a similar sentiment. Patel highlighted the support level at Rs 330 and resistance at Rs 360. He suggested that a decisive close above Rs 360 could trigger further upside, potentially reaching Rs 380. For the next month, he anticipates a trading range between Rs 310 and Rs 400.
AR Ramachandran from Tips2trades offered a slightly more cautious outlook. While acknowledging RVNL’s bullish trend, Ramachandran pointed out that the stock appears overbought on daily charts. He identified the next resistance level at Rs 366 and advised investors to book profits as the stock approaches this level. Ramachandran also warned that a daily close below the support level of Rs 322 could lead the stock to a lower level of Rs 252 in the near term.
RVNL’s role as the executing arm of Indian Railways adds another layer of interest to its stock performance. The company undertakes projects on a turnkey basis, handling everything from conceptualization to commissioning. This comprehensive approach, combined with the recent order win and strong financial results, suggests a robust operational foundation.
As of March 2024, the government holds a 72.84 per cent stake in RVNL, underscoring its strategic importance. However, the stock market’s reaction to the company’s recent achievements highlights the ever-present tension between fundamental performance and market perception.
