RVNL shares jump 26% in 3 sessions, hit fresh all-time high; here's what analysts say

Shares of Rail Vikas Nigam Ltd (RVNL) extended their sharp gains in Wednesday's trade for the third consecutive session. The stock today jumped 10 per cent to hit its fresh all-time high of Rs 130.20. At today's high price of Rs 130.20, the counter has surged 26.19 per cent in three days. That said, the multibagger scrip has zoomed 348.97 per cent from its 52-week low of Rs 29, a level seen on June 21, 2022. The counter has ascended by 293.95 per cent in the past one year.

The recent sharp movement in the share price came due to three reasons. First, RVNL has emerged as the lowest bidder for three underground packages of the Chennai Metro Rail Limited (CMRL) phase-II project, worth Rs 3,146 crore (in total). Second, the company has been granted the 'Navratna' status by the Department of Public Enterprises. And third, RVNL-SCC joint venture has emerged as the lowest bidder for Mahi Bajaj Sagar Project, Banswara (Rajasthan), worth Rs 2,249 crore.

Technical analysts largely felt the stock looked 'overbought'. One of the analysts suggested a 'buy-on-dip' strategy, while another didn't advise fresh buying. One more of them said that investors should book profits at current levels.

Osho Krishan, Senior Analyst - Technical & Derivative Research at Angel One, "RVNL has witnessed a strong spurt in price action in the recent period and has surged over 65 percent in the last two trading weeks. At present, the stock is at fresh highs and simultaneously has entered the overbought region. Hence, post such a steep rally one should not rule out the possibility of cool-off. As far as levels are concerned, immediate support is placed around the Rs 110-100 zone in the comparable period."

Vaishali Parekh, Vice-resident - Technical Research at Prabhudas Lilladher, said, "The stock has given a breakout above Rs 84 and is now trading near its all-time high level of 130, where the RSI is in the overbought zone. Any consolidation or short-term correction near the 100 level is a good buying opportunity. With a stop loss of 84, one can accumulate."

Pravesh Gour, Senior Technical Analyst at Swastika Investmart, "RVNL is in a strong uptrend and has broken a bullish flag formation. It created a base around the Rs 100 level. However, 140 is an immediate resistance where it may see some pause, but above this, it is likely to head towards Rs 150 level. On the downside, Rs 100 is major support for any correction, while Rs 87 is the next critical demand level. Investors should follow the buy-on-dip strategy while taking a new position on the counter."

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "For the last two months, the said counter has given a 132 per cent return. A current juncture fresh buy is not advised at all. In case, RVNL corrects to Rs 90 levels then only fresh longs are advisable. As of now wait and watch."

AR Ramachandran from Tips2trades said, "RVNL stock price is extremely overbought on the daily charts with strong resistance at Rs 129. Investors should book profits at current levels as a close below the support of Rs 118 could lead to Rs 91 in the near term."

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, projects and contract management.

Meanwhile, Indian equity benchmarks traded lower in today's session, dragged by banks, financials, technology and metal stocks.

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