While there are many stocks that have raked up massive gains in the recent past, Tata Investment Corporation Limited (NS:) seems to be in a different league. It is the asset management arm of the Tata Group which is primarily engaged in investing in long-term investments in equity shares, debt instruments and equity-related securities of companies in a range of industries.
It is a small-cap with a market capitalization of INR 9,914 crores. In FY22, the company clocked a revenue of INR 271.86 crores which was a noticeable jump of 44.6% over the preceding year’s revenue of INR 187.97 crores. Consequently, the net income has also grown 39.15% to INR 214.26 crores in the same period. In fact, the free cash flow position of the company has also improved noticeably, from INR 85.69 crores in FY21 to INR 122.34 crores in FY22.
Image Description: Monthly chart of Tata Investment Corporation
Image Source: Investing.com
The share price of Tata Investment Corp has seen massive investors’ demand over the last couple of months which has accelerated very recently. Today, the stock soared and hit a 20% upper circuit at INR 2,621.3, and delivered a total rally of over 43% in the three sessions alone. In fact, the rally on the monthly chart of the stock has almost become parallel to the Y axis, which depicts the ferocious buying in the stock.
The volume levels have also been soaring. This week, a total of 7.23 million shares exchanged hands so far, which is the highest weekly volume for the stock since it was listed on the NSE back in 2002. This should give a clear indication of the kind of panic-buying situation that is currently going on for the stock.
What should investors do in this relentless rally? Investors who are already holding a long position have absolutely no reason to exit as there is no sign of weakness being seen on the chart, as of now. Trailing stop loss should be used to squeeze most of the profits from this rally. For those who have stayed out of the rally and want to enter, unfortunately, they have missed the bus! Trying to chase the price is one of the biggest mistakes investors do in the stock market. There are numerous opportunities in other counters and trying to take an unwarranted risk by entering at excessively overbought zones does not seem a good idea.
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