The analyst remains cautiously bullish if ₹161 support holds, citing strong order visibility.
IRCON International shares fell over 3% on Thursday after it posted a muted Q1FY26, with topline softness but improving execution in key segments
But its technical chart is flashing early bullish signals right at a critical support zone, setting the stage for a potential comeback, according to SEBI-registered analyst Rajneesh Sharma.
Q1 Earnings Review
IRCON’s first-quarter revenues fell 22% to ₹1,786 crore, driven by execution headwinds, especially in the international and rail infra segments. Profits fell 26.7% to ₹164 crore, while margins remained stable despite cost pressures.
On the other hand, its rail electrification and domestic infra execution showed consistency. And IRCON’s cash flow and order book remains strong, he added.
The management has guided for robust order inflow in the second half of the year and continues to focus on high-margin domestic rail infra and highways, as well as expansion into EPC highway projects via subsidiaries. IRCON is also exploring fresh international bids in African markets.
According to Sharma, IRCON’s order book offers visibility beyond 2 years but its execution timelines are key to margin stability. He adds that the stock’s near-term weak trend is mostly priced in as its technical chart favors bounce going ahead.
Technical Outlook
On its weekly chart, Sharma noted that IRCON is forming a textbook bullish setup with its price rebounding from the lower rising channel support. Its Relative Strength Index (RSI) at 44.63 is turning from support and shows a bullish divergence compared to its price action. Additionally, the lack of spike in volumes shows that it is not a panic selling.
Sharma identified support at ₹161 (channel base), and ₹135 (demand zone). Resistance is seen at ₹188.80 (intermediate), and ₹221.09 (major swing high). He remains cautiously bullish on IRCON as the risk-reward favors upside if ₹161 holds.
Going ahead, he has cautioned that slow execution could compress FY26 earnings. Meanwhile, its PSU overhang and governance issues may cap upside. He advised investors to monitor their forex exposure from international projects.
Data on Stocktwits shows that retail sentiment has been ‘bearish’ for a week on this counter.
IRCON shares have declined 23% so far this year.
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