₹90,000 Cr Order Book: Railway stock jumps after receiving contract from Southeastern Railways

Synopsis: RVNL shares moved up after the Navratna PSU emerged as L1 for an Rs 87.56 crore South Eastern Railway contract to install IP-based video surveillance systems in LHB coaches, strengthening its technology-led railway safety capabilities and enhancing order-book quality.

The company, which is engaged in the business of implementing various types of rail infrastructure projects assigned by MoR, including doubling, gauge conversion, new lines, railway electrification, major bridges, workshops, production units and more, had its shares in the news following the company announcing the bagging of a contract from Southeastern Railways.

With the market cap of Rs 69,055 crore, the shares of Rail Vikas Nigam Ltd have gained about 1% and reached a high at Rs 337.55, compared to their previous day’s closing price of Rs 335.30. The shares are trading at a PE of 60.8, whereas its industry PE is at 17.6, and have given a return of more than 1000% over the last 5 years.

Order

Rail Vikas Nigam Limited (RVNL) is declared as the L1 bidder in an Rs 87.56 crore contract awarded by South Eastern Railway to provide the supply, installation, and commissioning of IP-based Video Surveillance Systems (VSS) in LHB coaches, in which 4 IP cameras in each coach, rugged handheld terminals/tablets, and 8 TB external SSDs are to be supplied in a period of 10 months starting from the date of the purchase order.

Strategically speaking, this contract marks RVNL’s forays into capability-building for technologically based railway projects, which now include digital safety and security systems for passengers. In a scenario where Indian Railways is looking at railway projects with emphasis on surveillance and monitoring, RVNL’s engagement in such projects brings it into a larger second wave of railway development.

Also, the contract is made in the normal course of business for RVNL, given that it is awarded by a domestic governmental body under standard contract conditions, without any promoter/related party association. This further reduces counterparty risk but brings stable revenue streams. These stable, medium-scale tech contracts will not only supplement RVNL’s mega EPC contracts, but they will further enhance order quality.

Financials

The revenue from operations for the company stood at Rs 5,123 crores in Q2 FY26 compared to Q2 FY25 revenue of Rs 4,855 crores, which is a growth of about %. However, the net profit stood at Rs 231 crore, down from the Rs 287 crore profit in Q2 FY25. The order book for the company stands at more than Rs 90,000 crore.

The shareholding pattern of the company is promoter-dominated, with a significant 72.8% promoter presence, which highlights the company’s control and support over time. However, the share of public shareholding at 16.1% indicates moderate market liquidity, although FIIs share 4.7% of total shares, thus marking their presence in the company. Moreover, the mutual fund share of 0.2% is minimal and thus indicates an improved opening for institutional investment in the company in the future.

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