Indian Railway Stocks Plunge: A Turbulent Market and Bearish Outlook
Railway stocks have taken a tumble, with some plunging as much as 30%. The recent market correction has been attributed to various factors, including disappointing financial results and bearish technical analysis. Despite the turbulent market conditions, analysts remain hopeful for a long-term rebound in the sector.
In a dramatic turn of events, the Indian Railway Finance Corporation Ltd (IRFC) stock plummeted by 11.26% during Monday’s trading. Despite this sharp decline, the stock has still managed to rally an impressive 360% over the past year.
The recent market correction has sent shockwaves through the Railway sector, with some stocks plunging as much as 30% from their recent highs. The reasons behind this correction are varied, ranging from execution not meeting growth expectations to fears of a slowdown in order inflows due to upcoming elections.
Profit booking and stretched valuations have also contributed to the current bearish sentiment, says financial analyst Rajesh Agarwal. The recent budget and the anticipation of higher allocation have added further pressure to railway stocks.
Indian Railway Finance Corporation (IRFC) and Rail Vikas Nigam were among the worst hit, with their stock prices dropping by 13.5% and 11.45% respectively. This was largely due to disappointing financial results for the December quarter, with IRFC’s net profit falling by 1.78% to ₹1,604 crore and Rail Vikas Nigam’s net profit decreasing by 6% to ₹359 crore.
Other railway multibagger stocks also ended the session with significant falls, with some experiencing drops between 4% and 12%. Analysts suggest that the stocks still appear expensive and urge investors to exercise caution.
From a technical standpoint, the stock is currently bearish on daily charts, with potential further downside, explains technical analyst Ritu Sharma. Technical analysis indicates support at Rs 130 and resistance at Rs 153.7 and Rs 162.
Analysts predict another day of correction, followed by a period of consolidation. This comes as the Railway sector grapples with concerns over order inflows, as some stocks may not be able to meet their order guidance for the year.
Despite the turbulent market conditions, analysts remain hopeful that the Railway sector will eventually rebound. However, they stress the importance of careful investment decisions amidst the current market volatility.
As per today’s date, 2024-02-13, the benchmark S&P BSE Sensex and market cap-based indices continue to track the performance of the Railway sector closely. Popular sectoral indices are also being watched closely for any signs of recovery.
In conclusion, the Railway stocks have experienced a significant correction, and analysts predict further downside in the short term. However, the long-term prospects of the sector remain promising, and investors are urged to exercise caution and make informed investment decisions.
Note: This article is based on the latest available information and is intended for informational purposes only. It is not investment advice, and readers are advised to consult with a financial advisor before making any investment decisions.
