This PSU stock surges 9% on winning new orders; up 13% in 3 sessions

Shares of Rail Vikas Nigam Limited (RVNL), the construction arm of the Ministry of Railways, rallied nearly 9% in intraday trade on Monday, in an otherwise weak broader market, after the state-owned company bagged multiple orders. The PSU stock has been rising for the last three sessions and gained 12.5% during the same period as compared to 2% gain in the BSE benchmark Sensex.

Extending its gaining streak for the third session, Rail Vikas Nigam shares opened 1.8% higher at ₹69.85 against the previous closing price of ₹68.60 on the BSE. During the session so far, the railway stock rose 8.6% to hit an intraday high of ₹74.51 on the BSE on the back of strong volume trade. As many as 33.4 lakh shares changed hands over the counter on the BSE as compared to the two-week average volume of 10.4 lakh stocks.

At 1:15 PM, RVNL shares were trading 7.9% higher at ₹74.05 levels, while the market capitalisation stood at ₹15,448 crore. At the current price level, the stock trades 156% higher than its 52-week low of ₹29 touched on June 21, 2022. It hit a 52-week high of ₹84.15 on November 29, 2022.

In the last one year, RVNL shares have surged 119%, while it jumped 115% in the past six months. In the calendar year 2023, the midcap stock has risen 8%, while it added 12% in a month and 15% in a week.

Rail Vikas Nigam shares got a boost on Monday after the state-owned company said in multiple regulatory filings that it has secured orders from National Highway Authority of India (NHAI) and Ministry of Railways.

“The company has received a letter of award received from National Highway Authority of India (NHAI) for “Construction of Six Lane Elevated Kona Expressway from km 0.145 to km 7.337 of NH-117 in the state of West Bengal on EPC mode,” it said in a BSE filing on March 31. The cost of the order is ₹720.67 crore and timeline for the completion of the project is 910 days, it said.

In a separate filing on March 31, the company said that it has bagged a letter of award received from Ministry of Railways for “Manufacturing cum Maintenance of Vande Bharat Trainsets including Up-gradation of the Government Manufacturing Units & Trainset Depots”. The total quantity is 120 trainsets and the cost per set is ₹120 crore.

Besides, the consortium (RVNL and Tracks & Towers Infratech) received a contract from NHAI for the “construction of 6-lane Greenfield Varanasi-Ranchi-Kolkata highway from Sonepurbigha village junction with NH-22 near Chatra from km 184.7 to km 222 under Bharatmala Pariyojana in the state of Jharkhand on Hybrid Annuity Model”. The cost of the project is around ₹1,272 crore and the timeline for the completion of the order is 2 years.

Earlier on March 24, the company declared an Interim Dividend of ₹1.77 per equity share of ₹10 each (i.e. 17.7 %) for the financial year 2022-23. The Record date is April 6, 2023, for determining eligibility of shareholders for payment of dividend. Interim dividend payment will be completed on or before April 22, 2023. At the current share price of ₹74.05, this results in a dividend yield of 0.34%.

Rail Vikas Nigam has declared 7 dividends since September 2019, while it paid an equity dividend amounting to ₹0.25 per share in the past 12 months, as per Trendlyne data.

Rail Vikas Nigam was incorporated as Public Sector Undertaking (PSU) on January 24, 2003, with the vision of the then Prime Minister, late Atal Bihari Vajpayee, to bridge the infrastructure deficit on Indian Railways. The company was granted Miniratna status in September 2013 and has also been recommended for Navaratna status by MoR. The company made its stock market debut in April 2019 after the disinvestment of 12.16% stake of the government of India through an initial public offering (IPO).