Texmaco Rail Shares Down 12% from Peak: Consider Entry at Current Levels?

Texmaco Rail & Engineering Ltd saw its shares decline by 4.57% in Wednesday's trading session, hitting a day low of Rs 260. This marks a 12.06% drop from its recent record high of Rs 295.65, which was achieved just a few sessions earlier on July 8.

Despite the recent downturn, Texmaco Rail's stock has demonstrated remarkable growth, soaring more than 235% over the past year. Analysts have expressed mixed views on the stock amidst its strong upward momentum. Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, remains optimistic about select railway stocks ahead of the upcoming Budget presentation. He suggests that investors with a longer-term horizon could consider adding Texmaco Rail to their portfolios, expecting moderate gains of 10-15% from current levels due to strong earnings visibility.

In contrast, Osho Krishan, Senior Research Analyst at Angel One, advises caution in the near term. He points out that while the stock has been in an uptrend with higher highs and higher lows, it is currently stretched. Krishan recommends a cautious approach, noting support levels near Rs 250 and highlighting Rs 300 as a significant resistance level.

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Texmaco Rail's stock is currently trading above various key moving averages, including the 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day SMAs. The 14-day RSI stands at 64.40, indicating the stock is not yet in overbought territory but approaching it.

Financially, Texmaco Rail has a high price-to-earnings (P/E) ratio of 96.58 and a price-to-book (P/B) value of 4.38. The company reported earnings per share (EPS) of 2.82 with a return on equity (ROE) of 4.53.

Trading activity on Texmaco Rail's counter today showed a volume of 8.65 lakh shares on the BSE, slightly below the two-week average of 10.37 lakh shares. Sell orders outnumbered buy orders, with turnover amounting to Rs 23.45 crore and a market capitalization (m-cap) of Rs 10,861.52 crore.

Texmaco Rail & Engineering Ltd, headquartered in Kolkata, specializes in manufacturing railway wagons, coaches, and locomotives. As of March 2024, promoters hold a 48.14% stake in the company, down from 50.16% in the previous quarter.

The company continues to navigate market fluctuations amidst its strategic focus on expanding its railway infrastructure capabilities and managing investor expectations amidst volatile market conditions.

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