RailTel Corp shares extend gains, jump 11% today; more upside ahead?

Shares of RailTel Corporation of India Ltd rose sharply in Friday's trading session, extending their gains for the fourth consecutive session. The stock soared 11.47 per cent to hit a day high of Rs 243.45. At this price, the stock was trading 4.53 per cent lower from its 52-week high of Rs 255, a level seen on September 11, 2023. That said, it has given multibagger returns, rallying 153.07 per cent from its one-year low price of Rs 96.20, hit on March 28 this year.

The company has recently received an order from Jammu Smart City Ltd worth Rs 67.95 crore. Implementation timeline for the project was nine months for a three-year contract duration.

On technical setup, two out of three analysts remained positive on the counter. One of them suggested that the stock looked overstretched, while the other two said Railtel may rise further in the near term.

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "There has been selling near Rs 255-258 levels on a consistent basis in the past. Indicators are currently looking overstretched. Avoid longs and book profits in the zone of Rs 235–250 if already bought."

DRS Finvest founder Ravi Singh said, "The stock is looking attractive on daily charts. One can buy this counter for a target price of Rs 255, keeping a stop loss placed at Rs 215."

AR Ramachandran from Tips2trades said, "Railtel Corporation looks bullish on the daily charts with strong support at Rs 220. A daily close above resistance of Rs 247 could lead to target of Rs 273 in the near term."

The counter was trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150- and 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 61.51. 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 35.09 against a price-to-book (P/B) value of 4.28.

The scrip has an analyst target price of Rs 143, Trendlyne data showed, suggesting a potential downside of 39 per cent in a year. It has a one-year beta of 1.01, indicating average volatility on the counter.

RailTel Corp, a Mini Ratna (Category-1) PSU, is an information and communications technology (ICT) provider and one of the largest neutral telecom infrastructure providers in the country with a pan-India optic fiber network. As of June 2023, the government holds a 72.84 per cent stake in the company.

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

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