Rail Vikas Nigam Shares Rally 14% Over Receiving Several Orders

RVNL shares rose 14% after it became lowest bidder for a project and received contracts for two others.

Rail Vikas Nigam (RVNL) shares rose 14% to Rs 88.35 in today’s trading session after it emerged as the lowest bidder for manufacturing and maintenance of Vande Bharat trains, with Metrowagonmash as a joint venture partner and a consortium of Siemens and RVNL received two separate orders from Gujarat Metro Rail Corporation.

According to reports on Sunday, Indian Railways would commence manufacturing 120 upgraded Vande Bharat Express trains by August 2023. This might be one of the reasons for the current surge in several railway stocks.

Furthermore, RVNL was the lowest bidder for the production and maintenance of Vande Bharat trains last month, with Russia’s Transmashholding firm Metrowagonmash as a joint venture partner. The tendering procedure for coach production is nearing completion, and the deal will be signed soon.

According to a BSE filing by Siemens, it has two distinct orders from Gujarat Metro Rail Corporation as part of a cooperation with RVNL – Surat Metro Phase 1 (over 40 kilometres, 38 stations, and two depots) and Ahmedabad Metro Phase 2 (over 28 kilometres, 23 stations, and one depot).

RVNL shares gained for the third straight session on Monday thanks to robust activity. The stock jumped 14.59% to a day high of Rs 88.84, which also happened to be its 52-week high. The stock subsequently finished 14% higher at Rs 88.35, compared to its previous closing of Rs 77.5. On the BSE today, 1.08 crore shares were traded. The counter’s turnover was Rs 90.64 crore, with a market capitalisation of Rs 18,299 crore.

On the technical front, RVNL traded higher than eight out of eight simple moving averages. The counter’s 14-day relative strength index came at 69. A level below 30 is defined as oversold, while a value above 70 is considered overbought. The company’s stock has a price-to-equity ratio of 12.49. It has a price-to-book value of 2.62.

RVNL is the executive arm of Indian Railways and executes projects assigned to it on behalf of the Ministry. Working in a turnkey manner, it undertakes the entire project development cycle from conceptualisation to commissioning, including the design phase, preparation of estimates, invocation and award of contracts, and contract management.

RVNL reported a 30.5% increase in total net profit to Rs 382.42 crore in Q3FY23, up from Rs 293.01 crore in Q3FY22. Its income from operations fell slightly to Rs 5,012.09 crore in Q3FY23, compared to Rs 5,049.24 crore in the same period the previous year. Total spending climbed slightly to Rs 4,889.05 crore in Q3FY23 over Q3FY22, while other costs increased 16.04% to Rs 25.25 crore.

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