GTL Infrastructure's shares have recently experienced a significant surge. This penny stock has seen an approximate 42% increase in the last two days.
New Delhi: The stock market occasionally presents opportunities where an inexpensive and overlooked share suddenly becomes a goldmine for investors. GTL Infrastructure (GTL Infrastructure) is currently showcasing this phenomenon. In just two days, the share price has risen by approximately 42%, surprising investors. An investment of ₹50,000 two days ago would now be worth approximately ₹71,000. This clearly demonstrates that even inexpensive shares can yield substantial returns with well-timed decisions.
What is GTL Infrastructure and why is it in the news?
GTL Infrastructure is a telecom tower company that provides tower infrastructure to mobile network operators across the country. Although the company has faced financial difficulties in recent years, its recent share price surge has brought it into the spotlight.
Over the past two days, the share price has risen from approximately ₹1.5 to ₹2.16. On the BSE, the share closed at ₹2.16 on Thursday, showing an 18.7% increase. The NSE saw a trading volume of over 66 crore shares, indicating significant enthusiasm among small investors.
42% return in two days: How was this possible?
On Wednesday, the share gained 12.5%, closing at ₹1.82. On Thursday, it opened at ₹1.93 and reached ₹2.16 within a few hours. This surge was surprising because there was no significant news or announcement from the company.
Experts believe this surge is based on technical factors and speculation. The share is trading above all its major simple moving averages (SMA), indicating strength in technical indicators. Furthermore, technical indicators like momentum indicators and the Relative Strength Index (RSI) suggest that the share's strength may persist.
Expectations related to 5G infrastructure
One significant reason for GTL Infra's rise is the increasing likelihood of 5G network expansion in the country. The government and telecom companies are investing in extending 5G networks to villages. Infrastructure companies like GTL could significantly benefit.
5G will require an increase in the number of towers, potentially providing new deals for tower providers like GTL. This expectation is driving many small investors to invest in this share, leading to a substantial increase in trading volume.
Market Sentiment: Support for small companies
In recent months, investor interest in small-cap and penny stocks has increased. Trading volumes have particularly risen in shares priced below ₹5. GTL Infrastructure is one such share, currently priced below ₹3, yet outperforming many larger shares.
When the share surged by 18.68% on Thursday, it was among the top gainers in the BSE's 'A' group. The average monthly volume was approximately 87 lakh shares, while over 390 lakh shares were traded in a single day – a significant event.
Long-term performance?
It's crucial to note that GTL Infrastructure's long-term performance hasn't been very encouraging. The share has increased by only 2% in the past year, while it has declined by 6.3% in the past six months. Therefore, this share remains risky and only potentially profitable in the short term.
However, over the past three months, the share has risen by 34%, and in the last seven days, it has seen an approximate 39.3% increase. This means that an investor entering at the right time could make significant profits.
Is investing now still advisable?
Before answering this, it's essential to understand that penny stocks are highly volatile. While technical charts still indicate a bullish trend, the RSI (Relative Strength Index) has reached 79.8, suggesting an overbought condition. This increases the likelihood of a potential decline in the coming days.
Therefore, if you wish to invest in this share, exercise extreme caution and only invest money whose loss wouldn't significantly impact your financial situation. Consider this type of share only if you're interested in short-term trading rather than long-term investment.
