Railway PSU stocks: Stocks to buy: Railway PSU stocks were negative even though the Indian stock market’s frontline indices continued to rise to all-time highs. The majority of railway stocks have given their respective owners no returns in a month. A month saw a 5.50 percent decline in the share price of IRCTC, an 8 percent loss in the share price of IRFC, a minor increase in the share price of RVNL, and a 10% correction in the share price of IRCON. In a single month, the share price of Railtel dropped by 2%.
Stock market analysts claim that the policy paralysis brought on by the Lok Sabha elections of 2024 in the first quarter of FY25 is the reason these PSU equities could not draw in investors. Another factor contributing to these railway stocks’ poor Q1 results in FY25 was the high base effect during Q1FY25. PSU businesses, however, are anticipated to gain traction with the election of a new administration; recent cabinet decisions about new railway line projects, etc., are stark examples of this. They indicated that discounted railway stocks are available, and that bottom fishing is a good method to look at IRFC and RVNL shares.
Railway Stock Triggers
Dr. Ravi Singh, SVP-Retail Research at Religare Broking, explained why railway companies did not participate in the Indian stock market rally: “Rails, another sector that has multi-baggers like IRCTC, IRFC, and RVNL, have returned nothing over the past month.” However, this consolidation can present a tempting chance to engage in some bottom-fishing. Companies that have solid financials and a full order book—and that are probably going to benefit from India’s modernization and infrastructure push—might be of interest to investors.
Given the current volatility, it may be advisable for short-term traders to exercise caution and set stringent stop losses in order to mitigate risk. In spite of its lackluster short-term performance, this company remains highly appealing in the long run because of strong government initiatives and growing consumer demand for effective rail services, according to Ravi Singh.
Avinash Gorakshkar, Head of Research at Profitmart Securities, was asked which railway stocks investors should look at when the market opens on Monday. He said that investors should look at IRFC and RVNL shares because IRFC finances between 40 and 45 percent of the Railway Infra Capex, and RVNL is predicted to post strong Q2 results once the new rail infra projects are approved by the Cabinet Committee on Economic Affairs.
Monday’s stocks to purchase
Shiju Vasu Koothupalakkal, Senior Manager of Technical Research at Prabhudas Lilladher, suggested buying railway shares on Monday. He said: “Out of the railway stocks, RVNL, IRFC, and IRCTC, RVNL share looks better placed technically, with a higher low formation visible on the daily chart taking support near ₹514 level just maintaining above the significant 50EMA zone and indicating a decent pullback, has improved the bias.” Positive candle formation and strong volume participation have demonstrated the robustness of the stock.
“We plan to continue the constructive direction in the days ahead. The next visible aim is ₹647, and if we maintain our strength after that, we can advance to the following ₹690 level. The key 50EMA level at the ₹535 zone will be the main support zone from the current prices, the Prabhudas Lilladher analyst stated.
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