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Business News/ Markets / Stock Markets/  IRCON International: Axis Securities lists the stock as top 'momentum pick', sees up to 17% upside – here's why
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IRCON International: Axis Securities lists the stock as top 'momentum pick', sees up to 17% upside – here's why

IRCON International stock was chosen as a 'momentum pick' by Axis Securities with the target set at ₹313-325, indicating a potential upside of up to 17%. Stock shows higher high-low formations, maintaining levels above key moving averages, and is expected to continue a medium-term uptrend.

IRCON International stock was chosen as a 'momentum pick' by Axis Securities with the target set at ₹313-325, indicating a potential upside of up to 17%.Premium
IRCON International stock was chosen as a 'momentum pick' by Axis Securities with the target set at 313-325, indicating a potential upside of up to 17%.

After an almost 255 percent surge in railway stock IRCON International in a year, brokerage house Axis Securities has chosen it as one of its top 'momentum picks'. The brokerage has set target of 313-325 for the stock, implying an upside of up to 17 percent.

As per the brokerage, IRCON on a daily chart has broken above the "Rounded Bottom" pattern at 282, signaling a continuation of its medium-term uptrend. Its volume declines during pattern formation, but increases at breakout, indicating an influx of market participation.

The stock is exhibiting a pattern of higher high-low formations on a daily chart while maintaining a position above a medium-term upward-sloping trendline, suggesting a sustained uptrend. The stock's ability to maintain levels above key short and medium-term moving averages (20, 50, 100, and 200 days) signals a positive bias in its trajectory, noted Axis Securities.

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The daily Relative Strength Index (RSI) is holding above its reference line, indicating positive bias in the stock. Following the breakout from the Rounded Bottom pattern, the stock is expected to continue a medium-term uptrend, for the target set at 313-325, predicted the brokerage.

Earnings

In the March quarter (Q4FY24), the engineering and construction company posted a marginal 3.8 percent decline YoY in its consolidated net profit to 246.8 crore as against 256.49 crore in the same period a year ago.

Meanwhile, its consolidated revenue for the operations for the March quarter (Q4 FY24) also declined a percent to 3,742.71 crore versus 3,780.66 crore last year in the same period.

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The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) reached 424 crore, marking a 14.7 percent YoY increase from 370 crore in Q4FY23. This growth reflects the company's improving financial health and operational efficiency. Additionally, the EBITDA margin was recorded at 10.9 percent, indicating a stable profitability ratio and efficient cost management during the period.

As of March 31, 2024, the total order book stands at 27,208 crore. This amount is distributed across various sectors, with the railways sector accounting for the largest portion at 21,158 crore.

The company also recommended a final dividend of 1.30 per equity share on the face value of 2 per share.

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Meanwhile, the company reported an overall 19 percent YoY increase in net profit to 929 crore for the year-ended FY24.

Stock Price Trend

Just in 2024 YTD, the stock has surged over 75 percent, giving positive returns in 3 of the 5 months so far and negative in the remaining 2.

The scrip jumped almost 12 percent in May so far, extending gains after a 14 percent rally in April. However, it fell 4 percent in March and 3.4 percent in February. Meanwhile, it soared 38.5 percent in January this year.

The stock hit its record high of 301.40 in the previous session, May 21, after posting strong March quarter results. Meanwhile, it has advanced over 269 percent from its 52-week low of 78.41, hit on May 24, 2023.

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In the long term, last 5 years, the stock has skyrocketed over 585 percent, meanwhile, it has soared over 486 percent in the last 3 years.

Technical Terminology

Rounded Bottom: A "Rounded Bottom" is a technical analysis pattern that indicates a gradual reversal from a consolidation to an uptrend. It forms a U-shaped curve, suggesting a shift in market sentiment over time.

Key Moving Averages: In technical analysis, key moving averages commonly used in assessing trends and support/resistance levels include the 20-day, 50-day, 100-day, and 200-day moving averages. They provide insights into short-term and long-term price trends, with crossovers and relationships between these averages often indicating shifts in market sentiment.

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Higher High-Low: “Higher high-low" refers to a pattern on a price chart where each successive low is higher than the previous low, indicating an upward trend in the market.

RSI: The relative strength index (RSI) is a momentum indicator used in technical analysis. RSI measures the speed and magnitude of a security's recent price changes to evaluate overvalued or undervalued conditions in the price of that security.

 

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Published: 22 May 2024, 02:44 PM IST
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