Rs 21 to Rs 131: This railway stock turned into multibagger in three years; fell 10% from record high

Shares of Rail Vikas Nigam Ltd (RVNL) have zoomed over 500%, delivering multibagger returns in three years. The stock of the railway firm, which closed at Rs 21.55 on August 31, 2020 hit a high of Rs 131 on August 31, 2023 on BSE. An amount of Rs 1 lakh invested in the RVNL stock three years ago would have turned into Rs 6.07 lakh today. In comparison, Sensex has risen 67.83 per cent during the period.

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RVNL shares opened higher at Rs 130.60 against the previous close of Rs 128.55 on Thursday. Later, the stock rose over 2% to an intraday high of Rs 132.80 on BSE. Total 33.84 lakh shares of the firm changed hands amounting to a turnover of Rs 44.38 crore. Market cap of RVNL rose to Rs 27,313 crore on BSE. The stock hit a record high of Rs 146.65 on July 24, 2023 and a 52-week low of Rs 32.60 on September 2, 2022. The stock has fallen 10.67% from record high and recovered 302% from 52-week low.

The stock has risen 508% in three years.

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In terms of technicals, the relative strength index (RSI) of RVNL stands at 63.5, signaling it's trading neither in the overbought nor in the oversold zone. RVNL stock has a one-year beta of 0.9, indicating low volatility during the period. Rail Vikas Nigam stock is trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day and 200 moving averages.

Here’s a look at what analysts said on the outlook of the stock.

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Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said, “The stock has gradually picked up from the Rs 120-123 zone improving the bias and has the near term target of Rs 147 levels with strong support maintained near Rs 119- Rs 120 levels. One can hold the stock and expect for further gains in the coming days. The RSI is also well placed with upside potential visible from here on and crossing the Rs 132 zone decisively shall bring about further momentum for upward movement.”

Abhijeet from Tips2trades said, “RVNL stock price is slightly bullish with strong resistance at Rs 132 on the daily charts. A daily close above Rs 132 could lead to target of Rs 144 in the near term. Support will be at Rs 127."

Aditya Gaggar, Director of Progressive Shares on RVNL said, "After a spectacular run-up right from Rs 60 to Rs 140, RVNL entered a consolidation mode and is currently forming a continuation pattern known as an Ascending Triangle Formation where the breakout point comes at Rs 144. A strong close above the mentioned point will be a pattern breakout and as per the pattern, the target is Rs 179."

Gaurav Bissa, VP, InCred Equities said,"RVNL witnessed a multi-year breakout on the weekly charts around Rs 100 levels and was seen climbing higher levels. However, the stock soon witnessed profit booking and has been in a consolidation phase for the last few months. This resulted in prominent momentum indicators like rsi and macd coming back to normal from overheated levels. The stock has taken support from 55 EMA on the daily charts and has started picking up momentum suggesting a strong move towards Rs 150 can be seen in the coming weeks. Strong supports are seen at Rs 120 levels which can be used as trading stoploss. The stock can test Rs 170-175 levels in the long run which makes it a lucrative buy at the current levels."

About the company

RVNL is an executing arm of Indian Railways and works for and on behalf of the ministry for projects assigned to it for execution. It works on a turnkey basis and undertakes the full cycle of project development from conceptualisation to commissioning including stages of design, preparation of estimates, calling and award of contracts, project and contract management.

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