PSU railway stock jumps 10% after receiving ₹555 Cr LoA from Rail Infra Development

The shares of the railway infrastructure developer gained up to 10 percent after the company bagged a Letter of Acceptance from Rail Infrastructure Development Company (Karnataka) Limited for Rs 554.46 crore.

Price Action

With a market capitalization of Rs 75,519.43 crore, the shares of Rail Vikas Nigam Ltd were trading at Rs 362.25 per share, increasing around 8 percent as compared to the previous closing price of Rs 333.10 apiece.

Reason for Rise

The share of Rail Vikas Nigam Ltd has seen positive movement after securing a Rs 554.46 crore contract from Rail Infrastructure Development Company (Karnataka) Ltd for the Bengaluru Suburban Rail Project’s Package C4A. The project involves constructing nine stations with civil, structural, architectural, and E&M works, strengthening RVNL’s growth prospects.

Financial performance

Examine the company’s financial condition, revenue narrowed down by 2 percent from Rs 4,676 crore in Q3FY24 to Rs 4,591 crore in Q3FY25, and during the same time frame, net profit plummeted by 9 percent from Rs 326 crore to Rs 295 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 percent 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 percent 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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