PSU Railway Stock Gains 3% After Winning ₹156 Crore EPC Contract
PSU Railway Stock : Rail Vikas Nigam Ltd (RVNL), a leading railway infrastructure developer, saw its stock rise by up to 3% from its intraday low after emerging as the lowest bidder (L1) for a significant ₹156.35 crore Engineering, Procurement, and Construction (EPC) project. The contract, awarded by South Western Railway, is expected to strengthen the company’s order book and long-term growth prospects.
Stock Performance and Market Capitalization
Despite the intraday rise, RVNL’s stock was trading at ₹362.25 per share, marking a 2% decline from its previous closing price of ₹371.60. The company has a market capitalization of ₹75,519.43 crore, making it one of the key players in India’s railway infrastructure sector.
Why Did the Stock Gain?
The surge in RVNL’s stock price came after the company emerged as the Lowest Bidder (L1) for an EPC project valued at ₹156.35 crore. According to the company’s filing, the contract involves:
- Design, Supply, Erection, Testing, and Commissioning of 2×25 KV Overhead Equipment (OHE) & Power Supply Installations (PSI).
- Construction of Traction Sub-Stations (TSSs), Sectioning Posts (SPs), and Sub-Sectioning Posts (SSPs).
- Electrical General Services, Engineering, and Telecommunication works.
This contract win reflects RVNL’s strong execution capabilities and its ability to secure competitive projects in the railway infrastructure space.
Recent Order Wins Boost Growth Prospects
This is not RVNL’s only recent success. The company recently secured a ₹554.46 crore contract from Rail Infrastructure Development Company (Karnataka) Ltd for the Bengaluru Suburban Rail Project (Package C4A). The project includes:
- Construction of nine railway stations
- Civil, structural, architectural, and electromechanical (E&M) works
These recent wins are expected to significantly boost RVNL’s revenue and execution pipeline in the coming quarters.
Financial Performance: A Mixed Bag
RVNL’s latest financial results reflect a slight decline in revenue and profits:
| Financial Metric | Q3 FY24 | Q3 FY25 | Change (%) |
|---|---|---|---|
| Revenue | ₹4,676 Cr | ₹4,591 Cr | -2% |
| Net Profit | ₹326 Cr | ₹295 Cr | -9% |
However, the company has shown strong long-term growth:
- Turnover surged from ₹2,492 crore (FY13-14) to ₹21,732 crore (FY23-24).
- Net profit increased from ₹157 crore to ₹1,463 crore in the same period.
- Project expenditure rose from ₹15,600 crore to ₹1,55,000 crore.
Despite the short-term decline in profitability, RVNL has demonstrated consistent growth in revenue and order execution.
Robust Order Book and Future Plans
RVNL boasts an impressive order book of ₹85,000 crore, which includes projects in:
- Railways
- Metro rail
- International railway projects
This order book is four times its trailing twelve-month sales, ensuring strong revenue visibility in the coming years.
For FY25, RVNL expects:
- Flat revenue growth initially, but an 8% YoY revenue increase later.
- A revenue target of ₹17,700 crore for the coming quarters.
- Strong project pipeline from Central Railway and Maharashtra Metro Rail Corporation.
Future Guidance: Aiming for Higher Growth
Looking ahead, RVNL expects:
- New orders worth ₹20,000 to ₹25,000 crore in FY24-25.
- Maintaining an order book three to four times its annual turnover.
- A shift from nomination-based projects to competitive bidding.
With a robust pipeline of railway and metro projects, RVNL is poised for steady growth in the coming years.
Company Overview
Rail Vikas Nigam Limited (RVNL) is a leading railway infrastructure development company in India. It specializes in:
- Railway electrification
- Gauge conversion
- New railway lines
- Bridges and workshops
Key Financial Ratios & Stock Metrics
| Metric | Value |
|---|---|
| Market Cap | ₹75,946 Cr |
| Current Price | ₹364 |
| 52-Week High / Low | ₹647 / ₹213 |
| Stock P/E | 60.8 |
| Book Value | ₹38.1 |
| Dividend Yield | 0.58% |
| Return on Capital Employed (ROCE) | 18.7% |
| Return on Equity (ROE) | 20.4% |
| Face Value | ₹10.0 |
| Promoter Holding | 72.8% |
| Debt to Equity | 0.68 |
| Price to Earnings Ratio | 60.8 |
| Pledged Percentage | 0.00% |
| QoQ Profits | -2.49% |
| Quarterly Profit Variation | -9.51% |
| Industry P/E | 19.5 |
| Graham Number | ₹71.7 |
| Intrinsic Value | ₹71.3 |
| Relative Strength Index (RSI) | 43.0 |
| Earnings Per Share (EPS) | ₹5.99 |
| Number of Equity Shares | 208 Cr |
| PEG Ratio | 3.10 |
| 200-Day Moving Average (DMA) | ₹414 |
| 3-Year Free Cash Flow | ₹3,216 Cr |
| Latest Free Cash Flow | ₹2,614 Cr |
| Total Debt | ₹5,442 Cr |
Conclusion: A Strong Contender in the Railway Sector
Rail Vikas Nigam Ltd’s latest contract win of ₹156.35 crore is a testament to its strong execution capabilities and competitive bidding strategy. Despite a minor dip in profits, the company continues to expand its order book and revenue pipeline.
With a robust order backlog of ₹85,000 crore and expectations of ₹25,000 crore in new orders, RVNL remains a strong contender in India’s railway infrastructure development sector. Investors and market watchers should keep an eye on future contract wins and revenue growth trends, as the company continues to strengthen its foothold in the industry.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.