The shares of the railway infrastructure developer gained up to 9 percent after the company received a Letter of Acceptance from Bharat Sanchar Nigam Limited (BSNL) for Rs 3,622 crore.
With a market capitalization of Rs 83,379.95 crore, the shares of Rail Vikas Nigam Ltd were trading at Rs 399.50 per share, increasing around 7 percent as compared to the previous closing price of Rs 371.90 apiece.
Reason for Rise
The shares of the company have seen positive movement after Rail Vikas Nigam Ltd received a Letter of Acceptance from Bharat Sanchar Nigam Limited (BSNL) for the Development (Creation, Upgradation, and Operation & Maintenance) Of Middle mile network of Bharat Net on the Design Build Operate and Maintain (DBOM) Model. The aggregate value of this LoA is Rs 3,622 crore.
Financial performance
Examine the company’s financial condition, revenue narrowed down by 1 percent from Rs 4,910 crore in Q2FY24 to Rs 4,869 crore in Q2FY25, and during the same time frame, net profit plummeted by 18 percent from Rs 370 crore to Rs 303 crore.
The company’s turnover rose significantly from Rs 2,492 crores in FY13-14 to Rs 21,732 crores in FY23-24, with the bottom line increasing from Rs 157 crores to Rs 1,463 crores. Project expenditure grew from Rs 15,600 crores to IRs 1,55,000 crores, focusing on 15.38% bottom line growth.
Order book & Future plan
Rail Vikas Nigam Limited (RVNL) has a remarkable order book of over Rs 85,000 crores, with a concentration on railway, metro, and international projects. This large order book, which is almost four times the trailing twelve-month sales, guarantees great future revenue visibility.
Despite a flat revenue estimate for FY25, RVNL expects an 8% YoY revenue rise, with a target of Rs 17,700 crores in the coming quarters. Recent project wins, including orders from Central Railway and Maharashtra Metro Rail Corporation, bolster RVNL’s development potential and execution ability.
Business Development
The company participated in 142 bids in FY23-24, totaling 286 submissions, with a success rate exceeding 20%. Bids were submitted in international markets, including Bangladesh, UAE, and Saudi Arabia. The company opened offices in South Africa, Oman, UAE, and Maldives, targeting an order book of Rs 75,000 to 1 lakh crores.
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Future Guidance
The company anticipates an order inflow of Rs 20,000 to Rs 25,000 crores in FY24-25, aiming to keep the order book at three to four times its annual turnover. It is transitioning from nomination-based to bidding projects, focusing on maintaining a strong order book for future growth.
Projects and Opportunities
The company is executing projects like the ABS provision at Jolarpatti Road Junction and focusing on capacity augmentation due to rising traffic projections. It is looking for opportunities in the India Middle East Economic Corridor (IMEEC) project while noting limited focus on railway electrification, having completed over 95% in India.
Company profile
Rail Vikas Nigam Limited (RVNL) is an India-based company engaged in developing rail infrastructure. The Company is in the business of implementing various types of rail infrastructure projects, gauge conversion, new lines, railway electrification, bridges, workshops, and production units.
Written by:- Abhishek Singh
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