Gaining for the second day in a row, shares of Rail Vikas Nigam Ltd (RVNL) shot up 20% by 03:15 PM on Tuesday to reach a new all-time high of ₹ 105.30 apiece on the bourses.
RVNL is engaged in implementing various rail infrastructure projects assigned by the Ministry of Railways. This includes doubling, gauge conversion, new lines, railway electrification, and more.
In the past five days, its share price has increased by 39.84%. In fact, its share price rallied by a whopping 155.27% in the past six months to give multibagger returns. If an investor had invested ₹ 1 lakh in the company’s shares six months ago, the value of their holdings would have been ₹ 2.55 lakhs today!
The company’s shares have been mounting gains on the back of multiple orders. Recently it received an order from the North Western Railway for the provision of automatic block signalling on Madar-Sakhun Section (51.13 Kms) of Jaipur Division over the North Western region. This order is to be completed in 9 months and RVNL will receive a consideration of ₹ 63.08 crores.
Earlier this month, it emerged as the L1 bidder for the design, manufacture, supply, installation, testing and commissioning of overhead catenary system along with switching station, auxiliary power distribution system and complete SCADA system for main line & depot of a Mumbai Metro line. RVNL had participated in a consortium with Siemens India Ltd, where RVNL had a 40% share, while Siemens had a 60% share.
In another development the company has established a new subsidiary — Kinet Railway Solutions Ltd, according to an exchange filing.
RVNL is a mid-cap stock with a market capitalization ₹ 18,296 crores. It has an ideal return on equity of 19.66% and an ideal debt-to-equity ratio of 0.91. Its shares were trading at a price to earnings ratio (P/E) of 12.71, which is slightly higher than the Industry P/E of 11.10, indicating that the stock might be overvalued as compared to its peers.
Written by Simran Bafna
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