Lloyds Engineering shares dive 9%, off one-year high on profit booking; here's what analysts say

Shares of Lloyds Engineering Works Ltd, formerly known as Lloyds Steels Industries Ltd, fell sharply on Monday after scaling their 52-week high level in intraday deals. The scrip today touched a one-year high price of Rs 59.81. Later, it saw profit booking and settled 9.30 per cent lower at Rs 50.45 against a previous close of Rs 55.62. Despite today's plunge, the multibagger stock has gained 185.03 per cent in 2023 so far and 224.44 per cent in the past one year.

On the technical front, analysts largely said that the counter looked 'overbought'. Bourses BSE and NSE have put the securities of Lloyds Engineering under the long-term ASM (Additional Surveillance Measure) framework. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.

Vaishali Parekh, Vice-President - Technical Research at Prabhudas Lilladher, said, "The stock has witnessed a decent rally in the last 2 months. It saw profit booking today. The near-term support would be Rs 48.50 zone and next upside target would be Rs 63."

Osho Krishan, Senior Analyst, Technical & Derivative Research at Angel One, said, "Lloyds Steels has been in positive terrain for the financial year and hovers well above all the EMAs (Exponential Moving Averages) on the daily charts. The counter has witnessed a huge price spurt in the last couple of trading weeks, leading it to new highs. On the technical front, the counter has been in the overbought region for quite some time and has taken a breather today. Amidst the recent stellar rally, one should avoid being complacent and wait for some cool-off in the counter. On the levels front, the bullish gap around the Rs 50-odd zone is likely to act as an immediate support zone, followed by a series of supports from Rs 44-40-odd levels.

Jigar S Patel - Senior Manager - Technical Research Analyst, Anand Rathi Shares and Stock Brokers, said, "The stock has already given a 129 per cent return in one and a half months. Additionally, it is trading way-above all major exponential moving averages, making it vulnerable for mean reversion. So, no fresh longs are recommended. As of now wait and watch."

AR Ramachandran from Tips2trades said, "Lloyds Steels is overbought on the daily charts. The stock may slip to Rs 45.50 in the near term."

The counter's 14-day relative strength index (RSI) came at 71.76. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 162.96 against a price-to-book (P/B) value of 30.73.

The scrip has a one-year beta of 1.33, indicating low volatility.

Meanwhile, Indian equity benchmarks continued to climb for the second straight session today, led by strong buying interest in technology, pharma, financial and automobile stocks.