Multibagger Tata Group stock hits record high, up 492% in five years; what's next?

Shares of Tata Communications hit their record high on Tuesday amid high volatility in the broader market. Tata Communications stock rose 1.86% to a high of Rs 2,174.85 on BSE. Market cap of the Tata Group firm climbed to Rs 61,460 crore. The multibagger stock has gained 87% in two years and 492% in five years. Total 0.21 lakh shares of the firm changed hands amounting to a turnover of Rs 4.78 crore on BSE. Later, the stock ended 1.17% higher at Rs 2160 on BSE. 

The stock fell to a 52 week low of Rs 1543.10 on October 26, 2023. It has risen 40% from its 52 week low till date. 

In terms of technicals, the relative strength index (RSI) of Tata Communications stands at 67.6, signaling it's trading neither in the overbought nor in the overtrading zone. Tata Communications shares are trading higher than 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages. 

Shiju Koothupalakkal - Technical Research Analyst, Prabhudas Lilladher said, "The stock has maintained the strong uptrend with recently giving a breakout above the resistance zone of 2080 levels to improve the bias further. It is in a consolidation mode and a decisive breach above  Rs 2170 levels shall trigger for further fresh upward move for targets of  Rs 2340 and Rs 2480 levels having support of  Rs 2080 level. The RSI is on the rise indicating strength and has upside potential to carry on with the positive move further ahead."

Kushal Gandhi, Technical Analyst, StoxBox said, "The analysis of the weekly timeframe pattern indicates that the price action has been exhibiting a volatility contraction pattern. This pattern indicates smart hands' potential accumulation and participation, thereby bolstering buyer demand, which is a positive signal. Additionally, the RSI values across daily and higher timeframes are significantly above their medians, signifying strong momentum in the price. Furthermore, the stock's relative strength compared to Nifty50 has shown improvement, suggesting a favourable potential for upward movement. We recommend purchasing Tata Communications with a target price of Rs 2355 and a stop loss at Rs 2075."

AR Ramachandran, a Sebi registered analyst said, "Tata Communications stock price is bullish but also overbought on the Daily charts with next resistance at Rs 2218. Investors are advised to keep booking profits as a Daily close below support of  Rs 2100 could lead to a target of Rs 1893 in the near term."

Vinod Jhaveri, Independent Analyst, Pure Technicals said, "The stock had a good run and can stay sideways for sometime before starting to rally again toward 2500. Any small correction would be a good opportunity to buy."

Tata Communications is engaged in the business of providing international telecommunications services. The company’s segments include Voice Solutions (VS), Data and Managed Services (DMS) and Real Estate (RE). The VS segment includes international and national long distance voice services. The DMS segment includes corporate data transmission services, virtual private network signaling and roaming services, television, and other network and managed services. The RE segment includes lease rentals for premises given on lease and does not include premises held for capital appreciation.