RVNL shares jump 8% on bagging multiple orders

Shares of Rail Vikas Nigam Limited (RVNL) surged over 8% in opening trade on Monday after the construction arm of the ministry of railways secured multiple orders from Himachal Pradesh State Electricity Board, Madhya Pradesh PoorvKshetra Vidyut Vitaran Company, and Madhya Pradesh Metro Rail Corporation. The railway stock has turned multibagger in the last one year, delivering nearly 300% returns to its shareholders on the back of its strong order book position as well as low counterparty risk due to backing by the government of India. Overall, railway-related stocks such as IRFC, IRCTC, IRCON, and others have also witnessed strong rally over the past year amid a positive outlook for the sector, coupled with the government's impetus on infrastructure development in the railways.

Continuing its gaining streak for the second straight session, RVNL shares opened higher at ₹251.05, up 5.5% against the previous closing price of ₹238 on the BSE. In the early trade, the largecap stock gained as much as 8.2% to ₹257.55, while the market capitalisation rose to ₹52,170 crore.

At the current price, shares of RVNL, which made its stock market debut on April 11, 2019, trade 25% lower than its all-time high of ₹345.60 touched on January 23, 2024. The stock, however, has zoomed 327% against its 52-week low of ₹60.3 hit on March 16, 2023. In the last one year, the counter soared 293%, while it rose 32% in the past six months. In the calendar year 2024, the PSU stock has added 38%, whereas it gained over 9% in a month.

As per the exchange filing, RVNL has bagged two letters of award from Himachal Pradesh State Electricity Board Ltd. It has secured orders worth ₹1,298 crore for the development of distribution infrastructure in the south and north zones of Himachal Pradesh State Electricity Board under the revamped reforms-based and results-linked, distribution sector scheme.

Besides, the company has won a project worth ₹251 crore from the Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company for supplying, installing, testing, and commissioning 11 KV Line-associated works in Jabalpur. Adding to it, the RVNL and URC joint venture have bagged a contract worth ₹543 crore from Madhya Pradesh Metro Rail Corporation (MPMRCL) for the Indore Metro Rail Project.

For the third quarter ended December 31, 2023, RVNL reported a decline of 6.2% in net profit at ₹358.6 crore, compared to ₹382.4 crore in the year ago period. The revenue from operations fell 6.4% to ₹4,689.3 crore as against ₹5,012.1 crore in the same period last year. The company's earnings before interest, taxes, depreciation, and amortization (EBITDA) slipped 9.6% YoY to ₹249 crore in Q3 FY24, while EBIT margin stood at 5.3% versus 5.5% in the same period last year. In its post-earnings conference call with investors, the management said that RVNL’s turnover crossed ₹15,000 crore marks for the first time in FY23-24, while its order book touched ₹65,000 crore, which roughly constitutes 50% of the typical railway projects.

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