Several railway stocks, including IRFC, IRCTC, RVNL, and RailTel, saw a rise of up to 2% on Friday as buying momentum increased. Although these stocks have shown some recovery from their recent lows, they are still trading well below their 52-week highs.
Performance of Key Railway Stocks:
- Rail Vikas Nigam Ltd (RVNL): RVNL shares have surged by 161% this year and delivered an incredible return of 1,466% over the past three years. However, the stock is currently down more than 35% from its 52-week high of ₹618, which was reached in July 2024.
- Indian Railway Finance Corporation (IRFC): IRFC has also given multibagger returns of over 101% in the past year, but it has fallen more than 34% from its high of ₹229.05, recorded in July 2024.
- IRCTC: Shares of IRCTC are down more than 23% from their peak.
- IRCON International: This stock has dropped by nearly 38%.
- RailTel: RailTel shares have fallen more than 35% from their highs.
Why Have Railway Stocks Dropped?
Railway stocks experienced a significant rally following increased allocations in the 2023-24 budget and additional funding in the current year’s budget. However, when the actual budget allocation for the latest year came in lower than expected, it led to a sharp correction in these stocks.
Future Outlook for Railway Stocks
According to experts, railway stocks like IRFC, IRCTC, RVNL, RITES, and IRCON International are now trading in an oversold zone. This means they could be set for a rebound. Ganesh Dongre, Senior Manager of Technical Research at Anand Rathi, suggests investors use a ‘buy on dips’ strategy.
Stock Recommendations:
- IRCTC: Buy with a target of ₹960 – 990, with a stop loss at ₹800. The stock has strong support at ₹800.
- IRFC: Buy for a target of ₹200 – 210, with a stop loss at ₹130 – 135. The stock is showing signs of a potential bounce-back.
- RVNL: Buy for a target of ₹530 – 550, with a stop loss at ₹420. The stock has recently broken out.
- RITES: Buy for a target of ₹350 – 360, with a stop loss at ₹270 – 280. A bullish reversal pattern has formed, indicating potential gains.
- IRCON: Buy for a target of ₹260 – 270, with a stop loss at ₹205. The stock is showing signs of a bottom formation around ₹200 – 215 levels.
This could be a good time for investors to consider buying railway stocks while they are trading at lower prices.
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