Titagarh Rail shares down 13% from record high; should you enter at current levels?

Shares of Titagarh Rail Systems Ltd continued their losing run for the sixth consecutive session in Monday's trade. The stock today slipped 2.69 per cent to hit a day low of Rs 1,642.20. At this price, it was down 13.41 per cent from its all-time high of Rs 1,896.50, a level seen on June 27.

Bourses BSE and NSE have put the securities of Titagarh Rail under the short-term ASM (Additional Surveillance Measure) framework. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.

Fresh entry is not advisable at current levels, Hemant Shah, fund manager at Seven Islands, told Business Today TV. "One should buy only on steep corrections as valuations are high. At present, the risk-reward ratio is not favourable. The stock is good fundamentally but valuation is high for new entrants. Those holding can continue with their positions," Shah stated.

On technical setup, support on the counter could be seen at the Rs 1,500 range.

"Titagarh is in the cycle of higher highs – higher lows. The counter is witnessing some cool-off from its overly stretched parameters, and hence, a cautious stance is advisable with support near Rs 1,500. On the higher end, Rs 1,800-1,850 remains a daunting task for the counter in the comparable period," said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.

The counter was trading lower than the 5-day, 10-day and 20-day simple moving averages (SMAs) but higher than the 30-day, 50-, 100-, 150-day and 200-day SMAs. The counter's 14-day relative strength index (RSI) came at 52.98. 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 76.55 against a price-to-book (P/B) value of 10.20. Earnings per share (EPS) stood at 22.05 with a return on equity of (RoE) 13.32.

Around 34,000 shares were last seen changing hands today on BSE. The figure was lower than the two-week average volume of 98,000 shares. Turnover on the counter came at Rs 5.72 crore, commanding a market capitalisation (m-cap) of Rs 22,271.67 crore. There were 19,764 sell orders against buy orders of 10,182 shares.

Titagarh Rail, formerly known as Titagarh Wagons, is a private shipbuilder, defence, railway wagon manufacturer headquartered in Kolkata, West Bengal. As of March 2024, promoters held a 42.46 per cent stake in the firm.