Current Performance of Railway Stocks
As of October 11, 2024, IRCTC shares have declined by over 23% from their peak, while IRCON International has seen a drop of nearly 38%. RailTel shares have also fallen by more than 35% from their respective highs. Despite these declines, railway stocks have shown signs of recovery recently, with gains of up to 2% on October 11 amid increased buying momentum.
Year-to-Date Gains and Recent Corrections
RVNL has been a standout performer this year, boasting a remarkable 161% increase year-to-date (YTD) and an astonishing 1,466% return over the past three years. However, it is currently down more than 35% from its 52-week high of ₹618 recorded on July 12, 2024. Similarly, IRFC has posted multibagger returns of over 101% in the last year but has fallen more than 34% from its peak of ₹229.05 reached on July 15.
Why Have Railway Stocks Fallen?
The decline in railway stocks can be attributed to several factors. Following increased allocations in the 2023-24 budget, these stocks initially rallied but faced a sharp correction when the actual funding fell short of analysts’ expectations. This discrepancy led to a sell-off as investor sentiment shifted.
Technical Analysis and Buying Recommendations
According to Ganesh Dongre, Senior Manager — Technical Research at Anand Rathi, railway stocks are technically poised for an upside breakout. He suggests employing a “buy on dips” strategy for these stocks:→ IRCTC: Currently showing exhaustion with strong support at ₹800. Investors can buy on dips with a target of ₹960 – ₹990.→ IRFC: Technically ready to bounce back. Suggested accumulation for a target price of ₹200 – ₹210 with a stop loss at ₹130 – ₹135.→ RVNL: After a decent breakout, buy on dips is recommended with a target price of ₹530 – ₹550 and a stop loss at ₹420.→ RITES: Forming a bullish reversal pattern; suggested buy at current market price for a target of ₹350 – ₹360 with a stop loss at ₹270 – ₹280.→ IRCON International: Showing signs of reversal; recommended buy at current levels for a target price of ₹260 – ₹270 with a stop loss at ₹205.
Conclusion
With railway stocks currently trading in an oversold zone and showing signs of recovery, this may present an opportune moment for investors looking to capitalize on potential gains. However, as always, it’s advisable for investors to conduct thorough research or consult with financial advisors before making any investment decisions.As the market continues to evolve, staying informed about the latest trends and expert recommendations will be crucial for making sound investment choices in the railway sector.
Disclaimer
The views and recommendations expressed in this article are those of individual analysts or broking companies and do not necessarily reflect the opinions of India Hood. Investing in stocks involves risks, including the potential loss of principal. Readers are encouraged to conduct their own research or consult with certified financial advisors before making any investment decisions. The author does not guarantee the accuracy or completeness of any information provided herein.
