This S&P BSE 500 PSU stock shot up 11% within the first hour of market open on Monday, supported by volumes that were 3.3x previous session’s volume and 13x the monthly average volume.
The company stock rose sharply owing to an order it received. The company’s market cap is Rs. 32,200 crore. The stock closed at 12% jump from previous close and 20% above its 20 day moving average and 64% above its 200 day moving average.
Rail Vikas Nigam Ltd (“RVNL”) stated in a filing dated 2nd September 2023, that it has has received Letter of Acceptance from Madhya Gujarat Vij Company Limited (MGVCL) for “Full Turnkey Contract for the Design, Supply and Installation – Development of Distribution Infrastructure work for Loss reduction at Dist. Vadodara under Revamped Reforms- Based and Results-linked Distribution Sector Scheme. The time period under which the contract is to be executed is 31 months and is valued at Rs. 322.1 crore and does not fall under related party transactions.
RVNL had received a similar order for the same products from Madhya Gujarat Vij Company Ltd worth Rs. 282 crore on 1st September 2023. The company has had impressive performance over the last Fiscal Year. Its top line grew 4.6% YoY and its Net Profit Grew 16.7% YoY. RVNL’s net margin stood at 6.3% in FY2023, vs 5.6% in FY2022. RVNL’s ROE is currently 21%.
RVNL is a Miniratna PSU that engages in the construction of rail infrastructure projects in India. RVNL is a multibagger YTD, returning 126% in CY2023. The stock has returned 371% over the last 1 year period and 636% over the last 3 year period. The company has stable shareholding, with 78% held by the government – President of India, 14% by the Retail Public. And the Rest by FIIs & DIIs.
Written by Sandeep R
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