Multibagger PSU railway stock jumps over 7% after bagging two major orders. Do you own?

RITES share price jumped over 7% in early trade on Wednesday after the company announced bagging of two major orders. The PSU railway stock gained as much as 7.43% to ₹299.95 apiece on the BSE.

The state-run railway infrastructure company, RITES said that it has received the Purchase Order from African Rail Company for supply of two fully overhauled ALCO locomotives for deployment in Zimbabwe, Mozambique and Botswana.

The order includes supply and commissioning of the overhauled in-service Cape Gauge ALCO Diesel Electric Locomotives fitted with new Cape Gauge Bogies, Traction Motors, Control System, Air braked, etc. overhauled at nominated facility and warranty support with the deputation of RITES technical team, RITES said in a regulatory filing on July 1.

The order is worth $3.6 million, and the time period by which the order is to be executed is 9 months.

In a separate regulatory filing, the company said that RITES-Aryan JV Joint Venture has received the Letter Of Acceptance (LOA) from South Western Railway.

This order is for Tumakuru Station Redevelopment Engineering, Procurement and Construction Agreement for Tumakuru Station Redevelopment including Civil Works, Signal and Telecommunication works and Electrical General Services at Tumakuru Station.

The order size is ₹37.81 crore excluding GST, and the time period by which the order is to be executed is 540 days from the appointed date as per Agreement.

RITES share price has broken out of a 7-week tight closing range with a bullish gap-up and an almost open-low candle — a clear sign of strength and renewed buying interest, according to Anshul Jain, Head of Research at Lakshmishree Investments.

“The earlier bearish reaction from the ₹320 zone has now been neutralised, firmly shifting sentiment back in favour of the bulls. A sustained move above ₹300 will likely open up further upside towards the ₹320 – 335 zone in the coming sessions. The gap-up suggests urgency from the bulls, and with weak longs now flushed out, the structure is well-positioned for a healthy continuation,” Jain said.

RITES share price has gained 5% in one month and has jumped 27% in three months. The PSU railway stock is flat on a year-to-date (YTD) basis, while it has dropped 16% in one year. However, RITES shares have delivered multibagger returns 120% in the past five years.

At 9:40 AM, RITES share price was trading 6.55% higher at ₹297.50 apiece on the BSE.

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 making any investment decisions.

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