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Shares of Rail Vikas Nigam Ltd. (RVNL), a state-run company, experienced a remarkable surge on Thursday, July 11, climbing as much as 5% to establish a new record high of ₹643.80. This surge surpassed the previous intraday peak of ₹619, achieved on July 9.
This significant upward trajectory reflects the robust performance of RVNL shares, which have witnessed a staggering 250% rally in value year-to-date. Furthermore, over the past 12 months, the stock has delivered multibagger returns, soaring by an impressive 425%.
Despite this impressive performance, technical analyst Rajesh Satpute believes that the RVNL stock still possesses potential for further growth. However, he cautions that the current rally is driven by pre-budget expectations, making it an opportune time to consider booking some profits.
Satpute recommends that investors establish a target range of 700-750 for the stock. Upon reaching this range, investors should contemplate booking at least half of their profits. He emphasizes the strategic importance of this move, stating that it would allow investors to recover their initial investment while securing a portion of the gains, leaving the remaining investment intact.
To manage potential downside risk, Satpute advises investors to maintain a stop loss at 575. Explaining the rationale behind this level, he asserts that if the stock reaches the desired price range of 750-800, investors should capitalize on the opportunity to secure at least half of their profits.
The government currently holds a significant stake in Rail Vikas Nigam, owning 72.84% of the company as of the March 2024 quarter. The shareholding pattern for the June quarter is yet to be updated. Notably, the railway stock does not enjoy widespread analyst coverage, with only two recent recommendations, both suggesting a 'Hold' rating for the stock.
RVNL made its debut on the stock market in 2019 at an IPO price of ₹19. Since then, the stock has surged over 30 times from its initial offering price. This remarkable growth has propelled the stock's market capitalization beyond ₹1 lakh crore, making it the second railway company to achieve this milestone after IRFC.
As of the current market level, RVNL boasts a market capitalization of ₹1.32 lakh crore, underscoring its significant presence within the railway sector. The impressive performance of RVNL shares, coupled with the analyst's advice to book profits, highlights the dynamic nature of the stock market and the importance of strategic investment decisions.
Source: RVNL share price: When should one book profits? An analyst advises