RailTel shares are down 24% from record high this year, time to buy?

Shares of RailTel Corporation of India have gained 225% from their 52-week low in a year. The multibagger stock, which fell to a 52 week low of Rs 114.80 on May 22, 2023, rose to Rs 374.50 in trade today, delivering 225% returns to investors. However, the Railtel stock is down 24% from its record high of Rs 491.15 touched on February 28, 2024. In the current session, Railtel shares rose nearly 3% to Rs 375.90 on BSE. Market cap of the firm rose to Rs 12,030 crore. Total 1.35 lakh shares of the firm changed hands amounting to a turnover of Rs 4.99 crore.  

The multibagger railway stock has gained 6.15 per cent this year and risen 209% in a year. It hit a 52-week low of Rs 114.80 on March 22, 2023. 

In terms of technicals, the relative strength index (RSI) of RailTel stands at 40.8, signaling neither the stock is overbought nor trading in the oversold zone. The stock has a one-year beta of 0.9, indicating very low volatility during the period. RailTel stock stands lower than the 5 day, 20 day, 30 day, 50 day, 100 day but higher than the 150 day and 200 day moving averages.      

ICICI Securities has assigned a target of Rs 240 on the RailTel stock. It assigned a sell call to the stock after Q4 earnings of the PSU were announced on May 2. 

"We have cut our EPS estimates by 3-4% for FY25-26E. We have reduced our target price to Rs 240 (from Rs 250), valuing the stock at FY26E P/E multiple to 20x. This implies EV/EBITDA multiple of 10x for FY26E. Maintain SELL," said the brokerage.

Osho Krishan from Angel Broking said, "Railtel is into a time-wise corrective phase, hovering in a slender range. In the last couple of weeks, a cycle of higher highs has been observed in the counter, construing a positive development for the stock. The 100 DEMA and the immediate swing low around the Rs 350 zone need to be tracked closely as they might cushion any blip and retract the counter to higher levels of Rs 400-410 on an immediate basis. A breakthrough on either side of the mentioned levels is likely to dictate the intermediate trend in the counter."

In April-end, Prabhudas Liladher assigned a price target of Rs 450-480 with a stop loss at Rs 348. 

Abhijeet from Tips2trades said, "Railtel stock price is bullish on the Daily charts with strong support at Rs 350. A daily close above resistance of Rs 373 could lead to target of Rs 418 in the near term."

RailTel clocked a 3% rise in profit after tax to Rs 77.53 crore in the March 2024 quarter compared to Rs 75.24 crore in the same period of the previous year. Total income climbed to Rs 852 crore in Q4 against Rs 707.29 crore in the year-ago period.

About the company 

RailTel Corporation is a Mini Ratna (Category-I) PSU and is one of the largest neutral telecom infrastructure providers in the country owning a pan-India optic fiber network on exclusive right of way (ROW) along railway track. The company's segments include telecom services and project work services.