IRCON shares rose 99% in six months, trading at record high; buy, sell or hold?

Shares of IRCON International Ltd have delivered 99% returns in six months. The IRCON stock, which closed at Rs 55.4 on February 9 hit a record high of Rs 110.24 on August 10 (Wednesday), clocking 98.98% returns on BSE. The railway stock gained 3.51% to hit its all-time high of Rs 110.24 in early deals today. Market cap of the firm rose to Rs 10,139 crore on BSE. Total 5.68 lakh shares of the firm changed hands amounting to a turnover of Rs 6.16 crore on BSE. On the other hand, the railway engineering and construction stock hit a 52-week low of Rs 38.60 on September 26, 2022.

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The IRCON stock has zoomed 176% in the last one year. In the current year, the stock has rallied 81%. The IRCON stock has a PE of 13.08, which indicates it’s undervalued compared to the sector. The sectoral PE stands at 39.66.

In terms of technicals, the relative strength index (RSI) of IRCON stands at 64.3, signaling it's trading neither in the overbought nor in the oversold zone. IRCON stock has a one-year beta of 1.2, indicating very high volatility during the period. IRCON stock is trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day and 200 day moving averages.

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

Abhijeet from Tips2trades said, "IRCON stock price is bullish on the Daily charts with next resistance at Rs 118. Investors should be booking profits at current levels as a daily close below the support of Rs 100 could lead to target of Rs 78.85 in the near term."

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Manoj Dalmia, CEO of Proficient Equities said, "The stock has been forming higher highs recently and has given a fresh breakout. Investors can expect a target of Rs 125 in the short term. The movement in shares can be attributed to June quarter earnings. Q1 profit rose 30% to Rs 187 crore and revenue came at 35.7%. This can be a good option as railways are set to boom considering Infrastructure initiatives by the GoI. The current order book for IRCON stands at Rs 32,486 crore for the railway segment."

Osho Krishnan, Sr Analyst- Technical and Derivative Research, Angel One said, “IRCON has seen a vertical rally in the past couple of trading weeks on the back of robust volumes and has surged nearly twice in the current financial year. On the technical chart, the stock has witnessed a strong breakout around Rs 90-87 levels and soared to clock a new lifetime high. Technically, post such a strong rally, there is some probability of profit booking in the counter. However, from a broader term perspective, the stock looks strong and has the potential to continue its uptrend. As far as levels are concerned, the immediate support lies around Rs 95, followed by the mentioned breakout zone. And till it sustains above the same, the undertone is likely to remain bullish and dips should be utilized to add long positions.”

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IRCON shares hit a record high in the previous session post Q1 earnings. IRCON reported a 30% rise in Q1 profit at Rs 187.4 crore against a net profit of Rs 144.6 crore in the corresponding quarter last year. Consolidated revenue from operations jumped 35.7% to Rs 2,712.2 crore in Q1 against Rs 2,001.9 crore in the corresponding period of the preceding fiscal.

At the operating level, EBITDA climbed 31.2 percent to Rs 208.8 crore in the June quarter of this fiscal against Rs 159.1 crore in the corresponding period in the previous fiscal.

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Earnings Per Share (EPS) stood at Rs 1.99 per equity share of the face value of Rs 2 per share. The total order book as on June 30, 2023, stands at Rs 32,486 crore. Out of which railway segment is Rs 23,613 crore, highway Rs 6,906 crore, and others Rs 1,967 crore.

Ircon International has specialisation in execution of Railway projects on turnkey basis and otherwise. After commencing business as a railway construction company, it diversified progressively to roads, buildings, electrical substation and distribution, airport construction, commercial complexes, as well as metro rail works. The company caters to both domestic and international markets.

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