From ₹110 to ₹400: RVNL shares rally nearly 4-fold in a year

Shares of Rail Vikas Nigam Limited (RVNL) surged nearly 8% to hit a fresh all-time high on Monday after the construction arm of the Ministry of Railways bagged a new order worth ₹187 crore from Maharashtra Metro Rail Corporation Ltd. The railway stock has risen nearly 40% so far this month as investors remained bullish on the company as it secured multiple orders. So far this month, the public sector entity has won five orders worth ₹780 crore, which includes projects worth ₹148 crore from South Eastern Railway; ₹239 crore from Southern Railway, ₹38 crore from South East Central Railway, and another order worth ₹167 crore from South Eastern Railway. The company’s order book stood at ₹85,000 crore as of March 31, 2024.  

On Monday, RVNL shares opened higher at ₹377.75 after closing 1% lower at ₹370.35 on the BSE.  In the first hour of trade, the large-cap stock has risen as much as 7.9% to scale a new record high of ₹399.70, while the market capitalisation climbed to nearly ₹79,800 crore.  

In the last year, the share price of RVNL has zoomed nearly 4-fold from its 52-week low of ₹110.50 on May 31, 2023. The multi-bagger stock has given nearly 130% returns in the last six months and 32% in a month.

On May 17, RVNL declared its results for the March 2024 quarter, posting 33% growth in consolidated net profit at ₹478.4 crore, as compared to ₹358.5 crore in the year-ago period. Revenue from operations stood at ₹6,714 crore, up 17.4% from ₹5,719.8 crore in Q4 FY23.

For the full financial year FY24, the company reported an all-time high top line and bottom line. The revenue grew 7.15% to ₹21,889 crore, while profit grew 17.94% to ₹1,575 crore as compared to the previous fiscal.

The company’s order book stood at ₹85,000 crore as of March 31, 2024. In FY23-24, RVNL completed 12 projects and the cumulative completed projects stood at 152 at the end of the March quarter of FY24.

The management in the earnings call said, “We want to grow the top line at a rate of around 5% to 7%. And to grow like this, all the time we want to maintain an order book of around ₹75,000 crore to ₹1 lakh crore. ₹1 lakh crore is an aspirational target.”  

The board of the company also recommended a final dividend of ₹2.11 per share (i.e. 21.10%) for the financial year 2023-24, subject to shareholders’ approval. At the current share price, RVNL's dividend yield stands at 0.09%.

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