PSU railway stock in focus after winning ₹335 Cr Kavach contract from South Western Railway

The shares of the railway infrastructure developer gained up to 1.5 percent after the company emerged as the Lowest Bidder (L1) in a contract from South Western Railway for Rs 355 crore.

Price Action

With a market capitalization of Rs 78,094.43 crore, the shares of Rail Vikas Nigam Ltd were trading at Rs 375.00 per share, decreasing around 1.65 percent as compared to the previous closing price of Rs 381.30 apiece.

Reason for Rise

According to the company filing, Rail Vikas Nigam Ltd emerged as the Lowest Bidder (L1) from South Western Railway for “Survey, design, supply, installation, testing, and commissioning for KAVACH equipment and other associated works over 790 RKM of Hubballi & Mysuru Divisions of South Western Railway” worth Rs 355 crore.

Financial performance

Examine the company’s financial condition, revenue narrowed down by 1 percent from Rs 4,910 crore in Q2FY24 to Rs 4,869 crore in Q2FY25, and during the same time frame, net profit plummeted by 18 percent from Rs 370 crore to Rs 303 crore.

The company’s turnover rose significantly from Rs 2,492 crores in FY13-14 to Rs 21,732 crores in FY23-24, with the bottom line increasing from Rs 157 crores to Rs 1,463 crores. Project expenditure grew from Rs 15,600 crores to IRs 1,55,000 crores, focusing on 15.38% bottom line growth.

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Order book & Future plan

Rail Vikas Nigam Limited (RVNL) has a remarkable order book of over Rs 85,000 crores, with a concentration on railway, metro, and international projects. This large order book, which is almost four times the trailing twelve-month sales, guarantees great future revenue visibility.

Despite a flat revenue estimate for FY25, RVNL expects an 8% YoY revenue rise, with a target of Rs 17,700 crores in the coming quarters. Recent project wins, including orders from Central Railway and Maharashtra Metro Rail Corporation, bolster RVNL’s development potential and execution ability.

 Future Guidance

The company anticipates an order inflow of Rs 20,000 to Rs 25,000 crores in FY24-25, aiming to keep the order book at three to four times its annual turnover. It is transitioning from nomination-based to bidding projects, focusing on maintaining a strong order book for future growth.

Company profile

Rail Vikas Nigam Limited (RVNL) is an India-based company engaged in developing rail infrastructure. The Company is in the business of implementing various types of rail infrastructure projects, gauge conversion, new lines, railway electrification, bridges, workshops, and production units.

Written by:- Abhishek Singh

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