The shares of this large cap company jumped around 3 percent in Friday’s trading session after LIC increased their stake. In just one month the stock has delivered a more than 50 percent return to its shareholders.
Price Movemnet:
With a market capitalization of Rs. 1,25,278 crores, the shares of Rail Vikas Nigam Ltd started Friday’s trading session on a lower note at Rs. 582.35 compared to its previous close of Rs. 586.15. During the trading session, the shares hit a high of Rs. 608.50, gaining around 3 percent and are currently trading at Rs. 605 apiece.
What Happened:
According to the latest shareholding, Domestic Institutional Investors increased their stake from 6.18 percent in the March quarter to 6.77 percent in the June quarter. Among them, LIC raised its stake from 6 percent to 6.44 percent during the same period. Moreover, Foreign Institutional Investors also increased their stake from 2.32 percent during Q4FY24 to 3.13 percent in Q1FY25.
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Furthermore, RVNL has also signed a Memorandum of Understanding (MoU) with United Construction Limited, Israel to cooperate with each other to get projects in the field of Railways, MRTS, Tunnels, Roads (Highways & Expressways), Bridges, Building Works, Airports, Ports, Irrigation, Power Transmission and Distribution Sector, Solar Sector, Wind Sector in Israel.
Additionally, the railway company’s subsidiary, Krishnapatnam Railway Company Limited (KRCL), won an arbitration award amounting to Rs. 584.22 crores against the Ministry of Railways.
An arbitration application was filed to resolve a dispute between KRCL and the Ministry of Railways. KRCL operates as a special-purpose vehicle under RVNL, which holds a 49.76 percent stake in the company.
Financials:
Coming onto the company’s financial performance, the revenue surged by 43 percent from Rs. 4,689.33 crores in the December quarter to Rs. 6,714.01 in the March quarter. In addition, the net profits jumped by 33 percent from Rs. 358.57 crores to Rs. 478.4 crores during the same period.
Order Book:
Rail Vikas Nigam has achieved a significant milestone with its order book reaching around Rs. 85,000 crores, out of this, Rs. 40,000 crores belongs to the bid portion and Rs. 45,000 crores to the nomination portion.
Recent Development:
The railway PSU also crossed Rs. 1 lakh crores in market capitalisation, becoming only the second railway stock after IRFC to achieve this milestone.
In July alone, the railway company secured orders totalling over Rs. 500 crores. These include contracts from South Eastern Railway valued at Rs. 202.87 crores, Maharashtra Metro Rail Corporation (Nagpur Metro) at Rs. 187.34 crores, and Central Railway at Rs. 132.59 crores.
Moreover, the expectations of a special focus on the railway infrastructure in the Union Budget have helped push the stock higher.
The government is focusing on improving the railway infrastructure and ensuring faster development and completion of tracks, rail electrification, rolling stock manufacturing and delivery of passenger freight services.
Written By Vaibhav Patil
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