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Rail Vikas Nigam Limited (RVNL) is a premier Navratna Public Sector Undertaking (PSU) in India, established under the Ministry of Railways. Founded with the mission to accelerate the expansion of railway infrastructure across the country, RVNL plays a vital role in the planning, development, and execution of large-scale railway projects. This includes constructing new lines, doubling tracks, gauge conversions, electrification, and building specialized structures like cable-stayed bridges and institutional facilities.
Beyond physical infrastructure, RVNL is involved in financial mobilization and resource allocation for its projects, collaborating closely with Indian Railways, central and state government agencies, and other public sector undertakings. Recognized for its significant contributions to India’s railway modernization, RVNL has earned a reputation for project efficiency, strategic resource management, and innovation in transportation infrastructure. RVNL Shares Plunge over 5% On Weak Performance In Q2 Railway stocks experienced a notable decline on Friday following disappointing Q2 results from Rail Vikas Nigam Ltd (RVNL) and Ircon International Ltd for the quarter ending September 30, 2024.
Both of these PSU stocks, which had previously seen substantial growth, were among the hardest hit, with losses of up to 7% in intraday trading. Except for the net profit which is down by 27% YoY at Rs 286.9 crore and revenue from operation which marginally declined by 1.
2% YoY to Rs 4,855 crore, RVNL reported good health. The EBITDA too was down by 9% YoY at Rs 271.5 crore ,while the EBITDA margins contracted by 40 bps to 5.
6%. Its stock declined 7.02% to Rs 444 leading to a market capitalization below Rs 94,000 crore for RVNL.
It reached as low as Rs 435 from its record high of Rs 647 touched in July. Similarly, Ircon International reported a 17.9% YoY decrease in net profit to Rs 206 crore for Q2, along with a 19.
3% YoY decline in revenue to Rs 2,447.5 crore. The company's EBITDA dropped over 23% to Rs 201 crore, pushing shares down nearly 6% to Rs 202.
30 and reducing its market cap below Rs 20,000 crore. Ircon shares are now more than 42% below their 52-week high of Rs 351.65, reached in July 2024.
Other railway stocks also faced declines, with Indian Railway Finance Corporation Ltd (IRFC) and RITES Ltd dropping 2% each and Indian Railway Catering and Tourism Corporation Ltd (IRCTC) slipping 1%. These stocks are down between 28% and 35% from their respective 52-week highs. In the wake of these corrections, Elara Capital upgraded RITES to a "buy" rating anticipating a rebound in exports in FY26 alongside robust order inflows.
They set a target price of Rs 365, while Axis Securities recommended a target of Rs 325. For Ircon International, Antique Stock Broking issued a "hold" rating with a target of Rs 251. IRCTC, despite weaker catering numbers, was expected to benefit from future growth drivers like Dedicated Freight Corridors (DFC) and new Vande Bharat trains, with IDBI Capital setting a target price of Rs 927.
RVNL, a Navratna PSU involved in various infrastructure projects for Indian Railways and government entities, has seen its share price soar 180% over the past year, compared to the Nifty's 23% gain in the same period. However, it currently remains under additional surveillance by the BSE and NSE due to recent price volatility. Other Valuation and Financial Metrics Market Cap: RVNL has a market capitalization of Rs 995.
70 billion as of November 7, 2024, indicating the total market value of its outstanding shares. Enterprise Value: At Rs 984.64 billion, this reflects the total value of the company, including debt and excluding cash, which is used for comparative purposes.
Price Ratios: Trailing P/E: 73.92, based on the company's past earnings, showing that investors are paying Rs 73.92 for every rupee of past earnings.
Price/Sales (ttm): 4.90, indicating the company’s valuation relative to its total sales over the trailing twelve months. Price/Book (mrq): 11.
33, showing RVNL’s valuation relative to its book value (total assets minus total liabilities) as of the most recent quarter. Enterprise Value/Revenue: 4.84, comparing enterprise value with annual revenue.
Enterprise Value/EBITDA: 41.26, comparing enterprise value with earnings before interest, taxes, depreciation, and amortization, a measure of operational profitability. Profit Margin: 7.
14 % which represents RVNL’s net income to the total revenue. Revenue (ttm): Rs 203.91 billion, the group’s total revenue for the trailing twelve month period.
Net Income Available to Common (ttm): Rs 14.55 billion, representing the net income available to common shareholders over the past twelve months. Diluted EPS (ttm): Rs 7.
07, or the earnings per share which provided for potential dilution which might arise from convertible securities. Total Cash (mrq): Rs 31.13 billion by the most recent quarter ending.
Total Debt/Equity (mrq): 68.98%, showing the proportion of debt in the company’s capital structure. RVNL Stock Performance Against S&P BSE Sensex As of November 8th 2024, RVNL has outperformed the S&P BSE Sensex across multiple timeframes, showing its strong growth as an investment.
Year-to-Date (YTD) Return: Consequently, RVNL has returned 149.62% compared to the Sensex’s return of 9.93%.
1-Year Return: RVNL provided an impressive 190.05% return which was higher than the Sensex’s 22.28%.
3-Year Return: RVNL delivered a 1,267.15% return while the Sensex grew by 32.21%.
5-Year Return: Over the long term RVNL achieved an extraordinary 2,162.27% return, far exceeding the Sensex’s 95.34%.
The above returns establish RVNL as possessing an extremely superior growth path and substantially outperforming the benchmark index and other related infrastructure and railway industries in India. RVNL Technical Analysis RVNL stock maintains a bullish long-term trend, but has faced short-term bearish pressure since reaching the recent high of Rs 647 in July 2024. Recently, the stock price found support around the Rs 420 level, which served as a double support area due to the presence of a horizontal support line and an ascending trendline.
This confluence of support has provided a potential base for the stock, indicating that if the Rs 420 level holds, RVNL may establish a solid foundation for recovery. If the stock respects this support level and gains some positive momentum, the next target would be a retest of the previous high resistance level at Rs 647. This level represents a key resistance area, and a breakout above it could further show its bullish long-term trend signaling new highs.
RVNL Price Prediction Conclusion Due to the above reasons, investors can consider investing in RVNL for long-term gains as the following figure also shows the company has registered better performance compared with S&P BSE Sensex. Although short-term technical rebounds from time to time, the stock has relatively established the support line of Rs 420, which can be a good support base for long-term growth. Evaluating the business growth projections for RVNL, more of its financial profitability and market valuation the organization has recorded better scores but some of the growth projections are unrecorded.
As expected, RVNL continues to boast strong technical and fundamental-Stars and above-RVNL is one of the preferred stocks in the Indian railway and infrastructure space due to its attractive targets..
