RVNL stock falls 42% from record high; value buy or a falling comet?

RVNL shares have slipped 42% from their record high in eight months. The multibagger railway stock, which hit a record high of Rs 647 on July 15, 2024 closed at Rs 371.55 in the previous session on BSE. On the other hand, RVNL stock has risen 474% in two years and gained 964.61% in three years despite the short term correction

Investors are wondering if the stock is a value buy or is it a falling comet?

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

Amol Athawale, VP-technical Research, Kotak Securities said, "After a long correction, the stock eventually found support near Rs 315 and reversed. Following this reversal, it has been holding a higher bottom formation on the daily charts and is comfortably trading above the 20-day SMA (Simple Moving Average), which is largely positive. We believe that as long as it remains above the 20-day SMA or Rs 345, the bullish sentiment is likely to continue. On the upside, it could move up to Rs 400, and further gains may lift the stock to Rs 410 or Rs 415. Conversely, if it falls below Rs 345, the uptrend would be vulnerable."

Ajit Mishra – SVP, Research, Religare Broking said, "RVNL, like other railway-related stocks, experienced a sharp decline of nearly 50% from its record high over the past eight months. However, with the recovery in the benchmark and broader indices, railway stocks have also shown a noticeable rebound. After establishing a base around the 320 level, RVNL is gradually moving higher and has recently reclaimed its short-term moving average. This suggests a continuation of the recovery trend. Traders may consider holding their long positions with a stop loss at Rs 358, targeting an upside potential of Rs 410 in the near term.”

Jigar S Patel from Anand Rathi said, "Support will be at Rs 360 and resistance at Rs 375. A decisive move above the Rs 375 level may trigger a further upside to Rs 390. The expected trading range will be between Rs 355 and Rs 390 for the short-term."

RVNL shares have a one-year beta of 1.6, indicating high volatility during the period.

In terms of technicals, the relative strength index (RSI) of RVNL stands at 57.2, signaling it's trading neither in the overbought nor in the oversold zone. Rail Vikas Nigam shares are trading lower than the 50 day, 100 day, 150 day, 200 day but higher than the 5 day, 10 day, 20 day and 30 day moving averages.

RVNL stock ended higher for the fifth straight session on Monday. In the current session, RVNL shares were trading flat at Rs 369.50 on BSE. Market cap of the firm stood at Rs 77,041 crore.

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.