Rail Vikas Nigam to be in focus on Tuesday as company emerges as lowest bidder for ₹145-crore Southern Railway project

Rail Vikas Nigam, a railway infrastructure company, is likely to be on investors' radar on Tuesday, September 23, after securing another railway order. In a regulatory filing post-market hours today, the company said it had emerged as the Lowest Bidder (L1) for a project from Southern Railway.

The project involves the design, supply, erection, testing, and commissioning of traction substations, including power quality compensating equipment with associated switching posts (SP/SSP) for a 2x25 kV AT Feeding System, along with SCADA and Automatic Fault Locator (AFL) systems for the Salem division, as per the company's regulatory filing.

The order is valued at ₹145.34 crore, including taxes, with completion scheduled within 540 days. The project is planned to support a 3,000 MT loading target. This marks the company’s second order this month, following a ₹169.48 crore order from West Central Railway on September 10.

Rail Vikas Nigam share price recovers 19% in September

Rail Vikas Nigam shares have regained strength in September, rallying 19% so far after a three-month consecutive decline. Railway stocks had earlier experienced a sustained bull run from May 2023 to July 2024, which pushed valuations to unsustainable levels.

This, combined with a slowdown in order inflows, prompted investors to retreat from the segment, resulting in sharp corrections from record highs. However, the recent pickup in order flows has renewed investor interest, bringing the stock back into the spotlight.

For the quarter ending in June, the railway PSU reported a 4.1% decline in revenue to ₹3,908 crore, while net profit fell 40% year-on-year to ₹134 crore from ₹224 crore. Sequentially, the numbers also appear weak, with revenue dropping 35% from the March quarter, profitability declining 71%, and margins contracting by over 500 basis points. EBITDA on a quarter-on-quarter basis fell nearly 90%.

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