RailTel shares rose 105% from 52-week low; more upside likely?

Shares of RailTel Corporation of India Ltd have turned into a multibagger, delivering 102% returns in the last one year. The stock, which closed at Rs 95.25 on August 29, 2022 ended at Rs 192.90 on August 29, 2023 on BSE. In comparison, the Sensex has gained 12.25% in the last one year.

RailTel Corp shares ended 1.10% to Rs 192.90 on BSE in the previous session. The stock zoomed 6.07 per cent intraday to a record high of Rs 202.40 on Tuesday against the previous close of Rs 190.80 on BSE. Market cap of the firm rose to Rs 6190.94 crore. Total 13.39 lakh shares of the firm changed hands amounting to a turnover of Rs 26.17 crore.

The multibagger stock has zoomed risen 51.53 per cent this year. The stock hit a 52-week low of Rs 93.95 on August 29, 2022. Since then, the stock has recovered 105% till date.

In terms of technicals, the relative strength index (RSI) of RailTel stands at 69.1, signaling neither the stock is overbought nor oversold. The stock has a one-year beta of 0.9, indicating low volatility during the period. RailTel stock stands higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

Abhijeet from Tips2trades said, “Railtel Corp looks bearish and has a strong resistance at Rs 206.45 on the daily charts. A daily close below support of Rs 190 could lead to a target of Rs 164 in the near term."

Om Mehra, Equity Research Analyst, Choice Broking said, "RailTel, the prominent player in the railway sector, has reached an all-time high of Rs 202.45, marking a significant breakthrough after an extended period of consolidation. The railway industry's stocks have been on an upward trajectory, bolstered by consistent support from the government, which has added an extra layer of appeal to the sector. The stock has been trading above all important moving averages. The stock has witnessed a remarkable surge of 22 percent within a month, while the year-to-date gains stand impressively at 52.63 percent. The daily charts have revealed the formation of a shooting star pattern indicating some sorts of reversal signal, it is advisable for existing investors to consider capitalizing on the gains by booking some profits at the current levels. On the other hand, fresh investors might find it appropriate to wait for a potential entry point around the Rs 170-175 range. This could provide a more favorable risk-reward ratio for those aiming for a target price range of Rs 215-225. Views would be negated if price triggers below Rs 158."

Q1 earnings

The firm reported a 48.29% rise in Q1 net profit. Q1 consolidated net profit rose to Rs 38.4 crore against a net profit of Rs 25.9 crore in the corresponding quarter last year. Consolidated revenue from operations jumped 25.34% to Rs 482.7 crore in Q1 against Rs 385.1 crore in the corresponding period of the preceding fiscal. Operating profit climbed to Rs 74.2 crore in Q1 against Rs 67 crore in the June quarter of the last fiscal.

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.

Block deal: Zomato stock in news as SoftBank Vision Fund may offload Rs 940 crore worth shares

Also read: Stocks to watch on August 30, 2023: CMS Info Systems, Tanla Platforms, LTIMindtree, Vedanta, others

Also read: Rishabh Instruments IPO, Super Rare Blue Moon, Raksha Bandhan in Top News on August 30: Nifty, Bank Nifty, Crude oil outlook, Asia Cup kicks off

Also read: Raksha Bandhan Holiday 2023: Is Indian stock market open today? Check details of BSE, NSE trading holidays