RailTel Corp shares up 20% in 2 days; will this rebound continue?

Shares of RailTel Corporation of India Ltd extended their upward move for the second straight session in Friday's trade. The stock rose 8.79 per cent to hit a day high of Rs 369. At this price, it has climbed 19.65 per cent in two trading days.

Prior to this, the counter was in a correction mode due to heavy selling pressure in the small-cap segment amid investors' concern over excessive valuations in the broader market. RailTel's stock has slipped nearly 18 per cent during this week.

Technical analysts largely suggested that the stock look 'bearish' on daily charts. Support could be seen at Rs 336, followed by Rs 325, Rs 300 and Rs 280 levels. On the higher side, immediate resistance may be found near the Rs 365-370 zone.

"The counter showcased a breakdown from Rs 365 level and is likely to attract further correction in the near period. On the lower end, support is placed around the Rs 300-280 zone. Until it authoritatively surpasses Rs 365, some consolidation is likely to persist," said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.

"Railtel stock price looks bearish on daily charts with strong resistance at Rs 395. A daily close below support of Rs 336 could lead to a downside target of Rs 288 in the near term," said AR Ramachandran from Tips2trades.

"Near-term resistance will be at Rs 370," said DRS Finvest founder Ravi Singh. Support can be seen around Rs 325 level, he added.

"Support will be at Rs 320 and resistance at Rs 370. A decisive close above Rs 370 level may trigger a further upside till Rs 400," said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers.

RailTel's counter was trading lower than the 5-day, 10-, 20-, 30-day and 50-day simple moving averages (SMAs) but higher than the 100-day, 150-day and 200-day SMAs. The stock's 14-day relative strength index (RSI) came at 40.28. 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 44.74 against a price-to-book (P/B) value of 6.32. Earnings per share (EPS) stood at 7.58 with a return on equity of 14.12.

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 December 2023, the government holds a 72.84 per cent stake in the company.