RVNL shares rose 305% in a year but analysts are still bullish on railway stock; here’s why

Shares of Rail Vikas Nigam Ltd (RVNL) have turned into multibagger in the last one year.  RVNL stock, which closed at Rs 31.2 on August 10, 2022 ended at Rs  126.50 in the previous session (August 10, 2023), delivering 305.45% returns for the shareholders in a year. During a period of two years and three years too, the stock has climbed 332% and 562%, respectively. In comparison, Sensex has zoomed 11.68% in a year.  RVNL stock hit a yearly low of Rs 30.55 on August 23, 2022.  It touched a 52-week high of Rs 146.65 on July 24, 2023.   

RVNL stock closed 0.51% lower at Rs 126.50 in the previous session on BSE. The railway stock has zoomed 84.54% in 2023.  

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RVNL shares opened higher at Rs 127.85 against the previous close of Rs 127.15 on BSE. During the session, the stock rose 1.14% intraday to Rs 128.60 on BSE. Total 22.88 lakh shares of the firm changed hands amounting to a turnover of Rs 29.16 crore on Thursday. Market cap of RVNL rose to Rs 26,375 crore on BSE. 

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In terms of technicals, the relative strength index (RSI) of RVNL stands at 53.4, signaling it's trading neither in the overbought nor in the oversold zone. RVNL stock has a one-year beta of 0.8, indicating very low volatility during the period.  Rail Vikas Nigam stock is trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day and 200 day moving averages.  

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

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Aditya Gaggar, Director of Progressive Shares said, “RVNL has witnessed a spectacular run-up from Rs 56 (February 2023) to Rs 144 (May 2023) without any considerable pullback which led to an overbought condition and eventually, the stock entered into a consolidation phase. Recently, the stock has regained its momentum and given a breakout from a Pennant and Pole formation with volumes. The stock price was seen at a new high while RSI failed to move in tandem which resulted in a bearish divergence and the stock price corrected, which was coupled with the OFS news. The overall uptrend remained intact and the target of the pattern comes to around Rs 199.”   

Abhijeet from Tips2Trades said, “RVNL stock price is slightly bullish with strong resistance at Rs 132 on the daily charts. A daily close above Rs 132 could lead to a target of Rs 144 in the near term. Support will be at Rs 119."  

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.     

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