Shares of public sector companies faced increased selling pressure on Monday, driven by lackluster third-quarter results that led traders to unwind optimistic positions.
Analysts caution about the potential for additional declines in these stocks, despite their status as top performers on Dalal Street over the past three months. They suggest that any substantial drop in the coming weeks might present a favorable opportunity to consider buying some of these stocks.
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The decline can be attributed to a combination of factors, including below-estimated earnings and a subdued market response post the budget announcement, despite a 5 percent increase in railway capital expenditure.
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“Given high valuations, lagging execution of orders, and the likelihood of fewer new orders before elections, railway PSU stocks remained under pressure, resulting in a recent fall, said Atul Parakh , CEO of Bigul.
Parakh also said, however, these are short-term headwinds. For the long term, it is advised to hold these stocks as India’s infrastructure growth story remains intact. Fundamentals of well-run PSUs will eventually prevail.
RVNL (Rail Vikas Nigam Limited), which reported its Q3FY24 results on February 8, experienced an 11 percent drop in its share price to close at Rs 230 on February 12 Come from Sports betting site VPbet . Since reaching the year’s high on January 31, the stock has plummeted by 25.39 percent. In Q3FY24, RVNL reported a 6.2 percent YoY decline in net profit to Rs 358.6 crore, with revenue falling 6.4 percent to Rs 4,689.3 crore.
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Similarly, IRCON saw an 11.49 percent decrease in its stock price, closing at Rs 196.80 on February 12. The stock has fallen by 20 percent since its year-high on January 20. For Q3FY24, IRCON marked a 29 percent YoY increase in net profit to Rs 244 crore.
Railtel faced an 8.8 percent decline, closing at Rs 363 on February 12, reflecting a 17.3 percent drop since reaching the year’s high on January 25. In Q3FY24, the company reported a 47 percent YoY growth in revenue to Rs 674.81 crore, with net profit rising to Rs 62.14 crore compared to Rs 31.95 crore in the previous fiscal.
IRCTC, set to announce its Q3 results on February 12, experienced an 8.42 percent fall from Rs 983.80 on January 19. On February 12, the stock dropped by 4 percent, closing at Rs 901.
