In September 2024, while India’s benchmark equity indices surged to new all-time highs, railway-related stocks have not shared the same momentum. Key shares connected with Indian Railways, such as RVNL (Rail Vikas Nigam Limited) and IRFC (Indian Railway Finance Corporation), have seen a sharp decline, remaining below key moving averages.
Let’s take a closer look at the performance of railway stocks in September 2024, their recent price corrections, and what investors can expect going forward.
Railway Stocks’ Performance in 2024
Throughout July 2024, most railway stocks had performed exceptionally well, touching new highs. However, in September 2024, as the broader market surged to record levels, these stocks experienced a significant downturn. The BSE Sensex hit an all-time high of 85,978, and the NSE Nifty 50 surged
to 26,277 in September 2024. Meanwhile, many railway stocks have seen a downward trend, with some declining by as much as 33% from their peaks.
For example:
- IRFC reached ₹229 on July 15, 2024, on the NSE.
- RVNL, Texmaco Rail & Engineering, and RailTel Corporation of India peaked on July 12, 2024.
- IRCTC touched its highest level on May 23, 2024.
Comparative Analysis: Railway Stocks vs. Market Indices
The stark contrast between the performance of railway stocks and the overall market indices cannot be overlooked. While the BSE Sensex and NSE Nifty 50 are only 5% below their all-time highs, railwa
y stocks have corrected by a much larger margin, with some stocks plunging by more than 30%.
This raises a crucial question for investors: Is this a temporary price correction or the start of a larger bearish trend in railway stocks?
1. IRCTC (Indian Railway Catering and Tourism Corporation)
- Current Price: ₹894
- Downside Risk: 9%
- Support Levels: ₹865, ₹856
- Resistance Levels: ₹903, ₹919, ₹930.
2. RVNL (Rail Vikas Nigam Limited)
- Current Price: ₹479
- Downside Risk: 21.3%
- Support Levels: ₹461, ₹440
- Resistance Levels: ₹512, ₹528, ₹546
Analysis:
RVNL has been trading below its 100-DMA for the past five days, indicating a bearish trend. The stock is likely to move towards its 200-DMA support at ₹377, with ₹395 serving as a weekly super trend line support..3. IRFC (Indian Railway Finance Corporation)
- Current Price: ₹153
- Upside Potential: 15.7%
- Support Level: ₹145
- Resistance Levels: ₹162, ₹170
Analysis:
IRFC is testing the weekly super trend line support at ₹145. While the price-to-moving average condition remains negative, some key indicators are showing signs of recovery. As long as the ₹145 support holds, there is a possibility of the stock moving up to ₹177. Immediate resistances are at ₹162 and ₹170.
4. RailTel Corporation of India
- Current Price: ₹408
- Upside Potential: 12.8%
- Support Level: ₹400
- Resistance Levels: ₹419, ₹448
Analysis:
RailTel’s stock has been hovering around its 200-DMA (₹419) for the past five days. The stock is maintaining support at ₹400, which is the 50-WMA on the weekly chart. If this support breaks, the stock could fall towards ₹346 (super trend line support). On the upside, a recovery could take the stock to ₹460, with intermediate resistance at ₹448.
5. Texmaco Rail & Engineering
- Current Price: ₹195
- Upside Potential: 18%
- Support Level: ₹185
- Resistance Levels: ₹202, ₹209, ₹217
Analysis:
Texmaco Rail has been trading below its 200-DMA for the past five days and is currently finding support at ₹185 on the weekly super trend line. As long as this support holds, the stock could rise towards ₹230. Immediate resistance levels are at ₹202, ₹209, and ₹217.
Conclusion:
Railway stocks have faced significant price corrections from their peaks in 2024, with some stocks down by as much as 33%. However, technical charts show varying trends for each stock. While some are in oversold territories and may see potential recoveries, others remain under bearish pressure, suggesting further declines could be possible.
Investors looking at railway stocks should carefully monitor key support and resistance levels. It is essential to assess both the broader market sentiment and individual stock trends before making any investment decisions in this sector.
