4H Chart Technical Analysis – Supertrend (35,6)
NRAIL is currently hovering around ₹361. The Supertrend indicator (35,6) on the 4H chart suggests ongoing bullish strength. Price candles continue to hold above the trend line, indicating that buyers still dominate the short-term action.
Actionable insight:
- As long as the 4H candles close above the Supertrend, the stock remains in an uptrend.
- A close below this line signals a potential exit point for short-term traders.
- Immediate support zone: ₹340–₹350
- Near-term resistance/target: ₹400+
This setup favors momentum-based entries for traders looking for short bursts of gains, with the Supertrend acting as a dynamic stop-loss mechanism.
Investment Perspective
Short-Term View (Next few days/weeks)
- Bullish bias supported by the 4H chart structure.
- Short-term rally possible toward ₹400–₹420.
- Maintain a stop-loss below ₹340, especially if Supertrend is breached.
Long-Term View (6–12+ months)
- With fresh capacity expansion and improving financials, the long-term chart structure appears constructive.
- The intrinsic value is estimated to be in the ₹600+ range, suggesting significant upside potential if growth continues.
- Investors with patience and risk appetite can consider staggered accumulation.
Fundamentals Snapshot
NRAIL is not just showing technical strength; the fundamental story adds a solid layer of support:
- Revenue for FY24 stood at ~₹1,766 Cr, reflecting a strong year-on-year recovery of 9%.
- Profit after tax (PAT) touched ~₹99 Cr, showing resilience and margin control despite industry headwinds.
- The company has successfully commissioned a new plant, expected to contribute meaningfully to FY25 revenue.
- Management has projected a 20–25% revenue jump in FY25, with EBITDA margins in the 7–10% range.
Key Ratios & Metrics:
- Operating Margins (FY24): ~14.6%
- Exports: ~40% of revenues, supporting forex inflows
- Debt Level: Increased due to capex, but still manageable with stable credit ratings
- Credit Outlook: ICRA and CRISIL have maintained a “Stable” outlook, with a possibility of upgrade if margins exceed 11%
Positives
- Undervalued: The stock is currently trading significantly below its base-case intrinsic value (~₹600).
- Capacity Expansion: Operational readiness of the new plant will boost production and sales.
- Export Potential: High exposure to overseas markets, especially in packaging paper, adds diversification.
- Improving Profitability: Margin expansion already visible and likely to improve further in FY25.
Risks to Watch
- Raw Material Volatility: Prices of waste paper (major input) can swing widely, impacting margins.
- Forex Exposure: A large portion of raw material is imported; adverse currency movements may squeeze profitability.
- Debt Levels: Increased borrowings for expansion—investors should monitor interest coverage and repayment capacity.
- Execution Risk: Timely ramp-up and operational efficiency of the new facility are critical for growth continuity.
Final Thoughts: Is NRAIL a Buy?
For Traders: The stock currently respects the Supertrend on the 4H chart, offering a low-risk, trend-following setup. Use a strict trailing stop-loss based on Supertrend and ride the upside as long as it stays intact.
For Investors: With strong fundamentals, margin improvements, and revenue expansion expected in FY25, NRAIL looks compelling for long-term portfolios, especially at current undervalued levels.
🚀 Short-Term Target: ₹400–₹420
🧭 Long-Term Target: ₹600+
📉 Stop-Loss (Short-term): ₹340 (on 4H close below Supertrend)
