RVNL shares slip 5% from recent record high levels; here's what analysts say

Shares of Rail Vikas Nigam Ltd (RVNL) fell in Tuesday's trade, pausing their sharp two-day upward run. The stock today declined 1.87 per cent to hit a low of Rs 408.70. At this price, it has tripped 5.39 per cent from its all-time high of Rs 432, a level seen during the previous session.

Despite the mentioned drop, the multibagger scrip has gained over 125 per cent on a year-to-date (YTD) basis.

The rail PSU has been securing significant order wins lately. It has recently emerged as the lowest bidder for a project from South Eastern Railway valued at Rs 191.5 crore.

Chakri Lokapriya, CIO and MD at TCG AMC has selected RVNL as his preferred bet from the railway sector. In the case of RVNL, valuations are still okay, given the order book and pace at which the earnings are expected to grow," the market expert told Business Today TV.

Lokapriya said valuation multiples for the stock still do not match the pace at which RVNL's revenues are growing amid strong order inflows.

On technical setup, support on the counter could be seen at Rs 394. Immediate resistance on the stock will be at Rs 440 while support is placed at Rs 394, said Rupak De, Senior Technical Analyst at LKP Securities.

The counter was trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The stock's 14-day relative strength index (RSI) came at 67.61. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a price-to-equity (P/E) ratio of 59.36 against a price-to-book (P/B) value of 11.04. Earnings per share (EPS) stood at 7.02 with a return on equity of 18.60.

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, project and contract management.

As of March 2024, the government owned a 72.84 per cent stake in the state-run firm.