Texmaco Rail shares down 12% from all-time high levels; should you enter at current levels?

Shares of Texmaco Rail & Engineering Ltd continued to decline for the second consecutive session in Wednesday's trade. The stock fell 4.57 per cent to hit a day low of Rs 260. At this price, it has slipped 12.06 per cent from its record high level of Rs 295.65, hit a couple of sessions earlier on July 8. Despite the mentioned fall, the multibagger scrip has gained more than 235 per cent in a year.

A few analysts largely remained divided on the counter, given its sharp upward run. Kranthi Bathini, Director of Equity Strategy at WealthMills Securities suggested that select railway stocks are currently in the momentum ahead of the Budget presentation, due on July 23.

"Texmaco Rail's stock  has been going up in the recent past, scaling its all-time high levels. Investors with a longer-term horizon can add this stock. Given the kind of earnings visibility, the stock still looked attractive. One can add this stock for a moderate expectation of 10-15 per cent range from the current range," Bathini added.

On the other hand, Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One recommended a cautious approach for the near term.

"The stock is in the cycle of higher highs – higher lows. It is overly stretched and hence, a cautious stance is advisable with support near Rs 250 level. On the higher end, Rs 300 remains a daunting task for the counter in the comparable period," Krishan said.

The counter was trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 64.40. 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 96.58 against a price-to-book (P/B) value of 4.38. Earnings per share (EPS) stood at 2.82 with a return on equity of 4.53.

Around 8.65 lakh shares were last seen changing hands today on BSE. The figure was lower than the two-week average volume of 10.37 lakh shares. There were 2,54,118 sell orders against buy orders of 1,20,565 shares.

Turnover on the counter came at Rs 23.45 crore, commanding a market capitalisation (m-cap) of Rs 10,861.52 crore.

The Kolkata-headquartered private engineering and infrastructure company is primarily engaged in the business of manufacturing railway wagons, coaches and locomotives.

As of March 2024, promoters held a 48.14 per cent stake in the company, slightly lower than 50.16 per cent during the December 2023 quarter.