Rail Vikas Nigam stock rises 4% on winning new order

Shares of public sector company Rail Vikas Nigam Ltd (RVNL) jumped as high as 8% today after the company won a ₹121-crore project from the North-Central Railways. The sentiment was further boosted after Finance Ministry approved the upgradation of RVNL to Navratna CPSE (Central Public Sector Enterprises). RVNL will now be the 13th Navratna amongst the CPSEs.

On getting the Naratna status, RVNL said via a tweet: "Standing strong on 3 pillars of quality, speed and transparency, RVNL is growing onwards and upwards! Thank you

@RailMinIndia @DPE_GoI & @FinMinIndia for granting ‘Navratna’ status to RVNL. We are exhilarated & look forward to exciting times with our stakeholders."

The stock opened a gap-up at ₹104 and hit an intra-day high of ₹110.95, before closing at ₹107.6, up 3.83% on the Bombay Stock Exchange (BSE). The stock touched its 52-week high of ₹114.62 this week on April 26, 2023, while it achieved a 52-week low of ₹29 on June 21, 2022. At the current share price, the market capitalisation of Rail Vikas Nigam stands at ₹22,443.16 crore.

The Rail Vikas Nigam stock has surged a whopping 37.55% in the past week; 59.81% in the past month; 167.88% in the past six months; and 56.31% in the year-to-date period. The PSU stock has surged 218.42% in the past year. 

In a filing to the stock exchanges, Rail Vikas Nigam said it has received a letter of acceptance (LOA) for “provision of E1-based automatic signalling with continuous track circuiting and other associated works, including suitable indoor alteration in electronic interlocking/RRI/PI stations enroute in Jhansi (incl)-Gwalior (Incl.) section of Jhansi Division of North Central Railway”. The overall cost of the project is estimated at ₹121,05,77,446, while it is estimated to be completed in 545 days.

In the financial year 2021-22, RVNL increased its expenditure on project execution from ₹15,403.65 crore to ₹19,381.71 crore, which excludes the element of ₹2,325.81 crore as GST, which reflects an increase of 25.83%. Its profit stood at ₹1,087.21 crore, showing an increase of 15.59% over the previous year.

The board of directors of the company in its meeting held on 24th March, 2023, also declared an interim dividend of ₹1.77 per equity share of ₹10 each (i.e. 17.7 %) for the financial year 2022-23.

In 2021-22, RVNL completed 776.29 route km (1,664.58 track km) of pure railway electrification work on essential lines. Aside from the pure RE works, 376.01 km of RE were also commissioned with the doubling projects. Thus, 1152.30 km of electrified sections were made ready as of 2021-22.

During the year, the company completed 1,020.90 kilometre of project length, including 704.84 km of doubling and 316.10 Km of Gauge Conversion, breaking the 1,000 km commissioning barrier for the first time. RVNL commissioned 111 stations out of 444 nos of new EI/PI installations commissioned by the Indian railways, which accounts for almost 25% of total stations commissioned in a year.