IRCON shares snap sharp two-day up move as stock tumbles 16% today; here's what analysts say

Shares of IRCON International Ltd fell sharply in Tuesday's trade, halting their two-day winning run. The stock slumped 15.78 per cent to hit a day low of Rs 225. Despite the mentioned drop, the multibagger scrip has rallied nearly 300 per cent in a year and 37 per cent in January so far.

Rail PSU counters have witnessed a strong surge this month on expectations of a record capex allocation for the sector in the upcoming Budget, due to be presented on February 1.

"At present, traders should avoid taking new positions in railways counters. Although, the overall view remains positive. Hold your long-term positions but don't take any fresh trading bet," Brijesh Ail, Head of Technical & Derivatives, IDBI Capital Markets & Securities, told Business Today TV.

Immediate support on the counter will be at Rs 225, said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers.

"IRCON stock price is bullish but also very overbought on daily charts. Investors should book profits at current levels," said AR Ramachandran from Tips2trades.

The stock was trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 68.01. 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 28.96 against a price-to-book (P/B) value of 4.60. IRCON has a one-year beta of 0.9, indicating low volatility on the counter.

IRCON International is an engineering and construction company with specialisation in transport infrastructure. The PSU was established in 1976. The Centre has granted 'Navratna' status to the state-owned firm.

Meanwhile, Indian equity benchmarks were trading higher today, led by gains in IT, pharma, banks and financials. Broader markets (mid- and small-cap shares) were also positive. Exchanges remained closed on Monday on account of the consecration of Ram temple in Ayodhya. The domestic indices were open on Saturday for a special trading session.

(Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.)

 

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