Rail Vikas Nigam Ltd (RVNL) experienced a significant surge in its share price, climbing over 15% during intraday trading on Tuesday. This remarkable increase propelled the RVNL share price to a new all-time high of ₹345.90 on the NSE. Over the past year, RVNL shares have delivered impressive multibagger returns, soaring by more than 190%, making it a lucrative investment for shareholders.
This upward momentum reflects the strong performance and growing investor confidence in RVNL. The company, engaged in implementing various rail infrastructure projects, has attracted substantial market interest. Its robust project execution capabilities and strategic initiatives have been key drivers behind its stock price appreciation.
Investors have shown a keen interest in RVNL due to its solid financial health and consistent growth trajectory. The company’s ability to secure and execute large-scale rail projects has positioned it favorably within the industry. As a result, RVNL’s stock has become a standout performer, delivering substantial returns and outperforming many peers in the market.
With its share price hitting new highs and exhibiting strong growth, RVNL continues to be a compelling investment option. The company’s impressive financial performance and strategic advancements are likely to sustain investor interest and support further stock appreciation in the future.
The gains in RVNL share price on Tuesday was attributed to a large order win. The RVNL on Monday announced receiving Letter of Acceptance received from South Eastern Railway headquarters-Electrical.
The Letter of Acceptance pertains to an order from the Kharagpur division of South Eastern Railway, aiming to achieve its 3000 MT loading target. To support this goal, the division is upgrading its electric traction system from 1 x 25 KV to 2 x 25 KV in the Kharagpur (Excl.)-Bhadrak (Excl.) segment. This upgrade involves the design, supply, erection, testing, and commissioning of the new electric traction system. This enhancement is crucial for improving the efficiency and capacity of the railway’s operations in the specified segment, ensuring they can meet the increased load demands. The order reflects the division’s commitment to modernizing its infrastructure to support higher performance and reliability in its services. This project is a significant step in advancing the railway’s capabilities, facilitating smoother and more efficient rail transport in the region.
The order is to be completed in 18 months, with a total cost slightly exceeding ₹148 crore, specifically ₹148,26,89,066.54 (₹One Hundred Forty-Eight crore Twenty-Six Lakh Eighty-Nine Thousand Sixty-Six rupees and Fifty-Four paisa), inclusive of applicable taxes, as per the RVNL release.
Recently, RVNL also announced its financial results for the March 2024 quarter and the fiscal year 2024.
RVNL share price rises 15% to all time high on a large order win from South Eastern Railways
RVNL recorded a remarkable surge in net profit, boasting a 33.2% year-on-year increase to ₹478.6 crore in Q4FY24, compared to ₹359.25 crore in the corresponding quarter of the previous year. This notable growth was primarily fueled by robust revenue expansion and enhanced operational efficiency. Revenues soared to ₹6,714.01 crore, marking an impressive 18.8% year-on-year uptick. Furthermore, earnings before interest, tax, depreciation, and amortization (EBITDA) reached ₹456 crore, reflecting a substantial 21.8% YoY growth trajectory, thus bolstering overall earnings performance.
In addition to the stellar financial results, RVNL’s Board proposed a Final Dividend of Rs. 2.11 per share (equivalent to 2.10% on the paid-up equity share capital) for the fiscal year 2023-24. This dividend payout further underlines the company’s commitment to shareholder value enhancement.
The buoyant financial performance and attractive dividend yield have significantly bolstered investor sentiment. Moreover, the escalating order flows indicate a promising outlook for future earnings. This positive momentum in order acquisitions not only consolidates RVNL’s market position but also augurs well for sustained growth and profitability in the forthcoming periods.
Overall, RVNL’s strong financial performance, coupled with its proactive dividend distribution policy and promising order book, underscores its resilience and strategic positioning within the industry. Investors are likely to remain optimistic about the company’s prospects, driven by its robust fundamentals and proactive management approach.
