RVNL shares plunged 9% today; should you avoid or buy this dip?

Shares of Rail Vikas Nigam Ltd (RVNL) slumped on Monday, diving 8.94 per cent to close at Rs 358.15. At this price, the stock has crashed 44.64 per cent from its all-time high value of Rs 647, seen on July 15 last year. Despite the mentioned fall, RVNL has gained 62.28 per cent in the past one year.

Exchanges have put the securities of RVNL under the long-term ASM (Additional Surveillance Measure) framework. BSE and NSE put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.

The counter saw high trading volume on BSE today as around 16.15 lakh shares changed hands. The figure was way more than the two-week average volume of 4.13 lakh shares. Turnover on the counter came at Rs 59.34 crore, commanding a market capitalisation (m-cap) of Rs 74,674.99 crore.

On the fundamental play, a market expert said long-term investors should consider adding RVNL on dips. "We are witnessing a broad-based profit booking in railway stocks, including RVNL. Investors with a long-term view can add this stock on dips, given the focus on rail infra. Railway stocks are going to perform well going ahead," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.

In contrast, a technical analyst suggested that the near-term view looked uncertain unless the counter regained Rs 440 level. "The price action of RVNL is currently experiencing significant corrective pressure. The stock is trading below critical moving averages. It is unlikely to witness any meaningful recovery unless it decisively reclaims the pivotal resistance level around Rs 440 on a closing basis. Therefore, we recommend refraining from purchasing the stock at the current market price," said Kushal Gandhi, Technical Analyst at StoxBox.

RVNL is an executing arm of Indian Railways and works for and on behalf of the ministry to execute projects assigned to it. 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, projects and contract management.

As of September 2024, the government held a 72.84 per cent stake in the rail PSU.