Multibagger railway PSU stock: Rail Vikas Nigam Ltd (RVNL) shares snapped their nine-day losing streak on Tuesday, December 31, to gain over six per cent after the Indian Railways' public sector undertaking (PSU) won an infrastructure order from the East Coast Railway zone worth ₹404 crore. The railway PSU said the project will be completed in 30 months. Neither its promoters nor any group companies have a stake in the awarding entity.
RVNL informed in a regulatory filing to the stock exchanges that it emerged as the lowest bidder for the Koraput-Singapur road doubling project in the East Coast Railway zone. The project involves the execution of 27 major bridges—22 major ones and five roads over bridges. It comprises earthwork to construct approaches and other works between Tikiri and Bhalumaska stations for the project of the Waltair Divison in the East Coast Railway.
Over the past year, the railways PSU stock has delivered multi-bagger 132 per cent returns. On Tuesday, shares of RVNL opened at ₹414.50 and gained nearly 6.12 per cent to hit an intraday high of ₹439.90 against a 52-week high of ₹647.00 before settling 3.31 per cent higher at ₹422.65 apiece on the BSE. As of December 31, RVNL commands a market capitalisation of ₹88,123.37 crore.
According to Trendlyne data, the railway PSU delivered 1,152.44 per cent in the last three years. RVNL undertakes and executes project development, financing, and implementation related to railway infrastructure, mobilises financial and human resources for project implementation, and ensures timely execution of projects with the least cost escalation, among other things.
Due to recent price volatility, RVNL shares are currently under the BSE and NSE's long-term Additional Surveillance Measure (ASM). The government maintains a 72.8 per cent stake in RVNL as of September 2024, supporting its ongoing mandate to execute infrastructure projects for Indian Railways.
RVNL’s net profit fell 27 per cent year-on-year (YoY) to ₹286.9 crore in the September quarter, down from ₹394.3 crore in the year-ago period over lower operating margins and reduced earnings. RVNL's revenue from operations declined by 1.2 per cent YoY to ₹4,855 crore, compared to ₹4,914.3 crore in Q2 FY24. EBITDA dropped nine per cent to ₹271.5 crore, with margins narrowing to 5.6 per cent from six per cent, indicating rising operational pressures.
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