Home / Money / Multibagger Alert: RVNL surged 124% since October; up 190% from 52-week low

Rail Vikas Nigam Ltd (RVNL) has been on a roll, delivering multibagger returns to its investors in just 3 months. The stock has surged as much as 124 percent since October 2022, from 33 to 75 currently.

In the last 1 year, the stock has added over 105 percent while it has gained 144 percent in the last 6 months.

In January, the stock is up nearly 11 percent following a 7 percent decline in December and an 85 percent jump in November.

The stock has retreated 9.5 percent from its 52-week high of 84.15 touched on November 29, 2022. However, it has zoomed 190 percent against its 52-week low of 29 hit on February 24, 2022.

Rail Vikas Nigam Ltd is a special purpose vehicle (SPV) engaged in undertaking development projects. RVNL is focused on mobilizing financial resources and implementing projects pertaining to the reinforcement of the Golden Quadrilateral.

RVNL executes all types of railway projects, including new lines, doubling, gauge conversion, railway electrification, metro projects, workshops, major bridges, construction of cable-stayed bridges, and institutional buildings. It works on a turnkey basis and undertakes the full cycle of project development from conceptualization to commissioning including stages of design, preparation of estimates, calling contracts, and project and contract management.

Recently, the company announced that it has bagged a contract worth 166.26 crore from Gujarat Metro Rail Corporation (GMRC). The joint venture between RVNL-ISC Projects has received a letter of award (LoA) for the design, supply, installation, testing, and commissioning of ballastless track for the Surat Metro Rail Project, Phase-1, it said in an exchange filing.

“Rail Vikas Nigam Limited (RVNL) - ISC Projects Private Limited JV" received LOA on January 4 for the design, supply, installation, testing and commissioning of ballastless track from Sarthana to Dream city in elevated and underground sections including connecting lines to depot along with ballasted/ballastless/ embedded standard gauge track for corridor-1, Surat Metro Rail Project, Phase-1," RVNL said. The project has to be executed within 22 months, the Mini-Ratna company added.

For the second quarter ended September 30, 2022, RVNL’s consolidated net profit jumped 36.5 percent to 381.22 crore, while net sales grew 21.9 percent to 4,908.90 crore as compared to the same period last year.

Even after the multibagger returns, brokerage house IIFL Securities sees more steam in the stock. It has a target price of 130, implying a potential upside of 71 percent from the current market price of 75.

Meanwhile, HDFC Securities said investors can buy the stock in the 71-74 band and add further in the 64-66 band for a base case target of 81 (10x Sep’24E EPS) and a bull case target of 86.5 (10.75x Sep’24E EPS) over the next 2-3 quarters.

"The management expects revenue to grow at a CAGR of over 20 percent in the coming few years on the back of strong order book and new order inflows. However, we have built in a conservative 16 percent/15 percent CAGR Revenue/PAT growth over FY22-FY25E over a strong base of FY22. We have not considered any upside from the recent Govt. of Kyrgyzstan order. Looking at the strong prospects we believe the stock is available at a reasonable valuation. Its cash and investments per share are 22.3 which is 31 percent of its CMP," said HDFC Securities.

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