We all know India is marching towards relentless growth, marked by the robust infrastructure transformation. Companies engaged in developing railway lines play a pivotal role in the nation’s growth. They lay the foundation for accelerated economic development, smooth logistics and enhanced connectivity. They facilitate trade, and tourism and generate employment, contributing towards the nation’s destiny.
RVNL is one such company which contributed to the nation’s growth. This company was able to successfully capitalize on the government’s ambitious push and execute projects efficiently. This infrastructure company delivered huge returns to its shareholders in the past, as a result of its business model and strategic execution.
Now one question arises, is it too late to have this stock in our portfolio? While looking at the company’s past we can see the stock has given a meteoric price rise followed by its momentum. Many may expect a consolidation to occur, but no one knows what will happen in the future. Looking at the company’s long-term prospects followed by its sector’s growth it remains prominent. Is there any investing opportunity available at this moment? Come let’s get to know if it is available or not.
RVNL – Rail Vikas Nigam Limited
Rail Vikas Nigam Limited (RVNL) is a public sector undertaking controlled by the Ministry of Railways, Government of India. This company was formed or established to execute the National Rail Vikas Yojana project. This project was announced by Prime Minister Atal Bihari Vajpayee to develop the railway infrastructure of India. RVNL was established on the 26th of December 2002 and is headquartered in New Delhi.
RVNL as a company involves themselves in manufacturing and developing a wide range of railway infrastructure projects. They also diversified their business into various segments like metro, multimodal transport and other connectivity projects to meet the growing needs of the country and generate more revenue.
Currently, the company has its own international offices in countries like Maldives, South Africa, UAE and Oman. They also showed their Expression of Interest and Bidding in other countries like Bangladesh, Sri Lanka, Uzbekistan and Saudi Arabia. RVNL has given a 425.53% return in the stock market compared to its previous year from Rs 119.65 to Rs 628.80.
Business Segments Of RVNL
Railway Infrastructure
This segment acts as the core business for RVNL. With this segment, the company involves itself in constructing and enhancing railway networks. With RVNL’s expertise in this domain, the company was able to lay over 16,000 kilometers of railway infrastructure, including track laying and doubling of tracks.
Metro Projects
Currently, the company has started executing their work in seven cities with metro rail projects. They are involved in aspects like metro construction, track work, civil engineering and underground packages.
Electrical Works
RVNL engages in various projects related to electrical works. The company works on electrical systems for metros and other infrastructure projects. With this experience, RVNL is positioned to do well in the future and ensure their needs in new railway lines.
Rolling Stock Manufacturing
The company entered into this segment with an order of 120 Vande Bharat train sets. RVNL manufactures these high-speed trains and maintains them at three depots. By this, we can understand their commitment to advanced railway technology and manufacturing.
Multi-Modal Logistics Parks (MMLP)
RVNL is currently developing MMLPs in Bangalore, Chennai, Pune and Indore. By this, they try to improve logistics efficiency by integrating various transportation modes.
Turnkey, Signaling And Telecommunication Projects
With this segment, the company involves itself in undertaking various end-to-end infrastructure projects along with focusing on modern railway signaling systems. They include themselves in projects like Automatic Block Signaling (ABS).
Financials Of RVNL
In the Financial year 2024, RVNL saw a substantial increase in revenue by 7.92% to reach 21,889.23 crores as compared to 20,281 crores in FY 23. Analyzing three years, encompassing FY 2022 to FY 2024, the company displayed a good compound annual Growth Rate (CAGR) of 11.76% in revenue.
RVNL in FY 23 also increased its net profit margin by 10.83% to 1,574.48 crores as opposed to 1,420.55 crores in FY 23. This increase in revenue and net profit happened because of the expansion made by the company through winning bids for new projects like the Indore Metro Projects and the Maldives project.
In FY 23, RVNL maintained favorable financial metrics with a Return on Equity (ROE) of 20.4% and a Return on Capital Employed (ROCE) of 18.7%.
Order Book Of RVNL
On June 3rd
RVNL received LoA from South Central Railway for Engineering, Procurement and Construction (EPC) tender for the development of Doubling of Track between Ankai station and Karanjgaon stations including Electrification and Signaling works for value of ₹440 crores.
On June 5th
RVNL received order from Dakshin Haryana Bijli Vitran Nigam Limited for Implementation of SCADA and DMS/OMS works in Gurugram Revamped Distribution Sector for a value of ₹124 crores.
On June 5th
RVNL received LoA from Eastern Railway from Eastern Railway for Construction of Sitarampur bye pass line under the Asansol Division of Eastern Railway for value of ₹390.97 crores.
On June 6th
RVNL Received LoA from National Thermal Power Corporation (NTPC) for contract forexecution of Balance Civil & HM works of Barrage Complex including part HRT package of Rammam Hydro Electric Project Stage-III (3×40 MW) for value of ₹495.14 crores.
On June 7th
RVNL JV received an order from Southern Railway for the development of Automatic Signalling on Ernakulam JN(ERS) – Vallattol Nagar (VTK) Section on B-Route of Thiruvananthapuram Division in Southern Railway for a value of ₹156.47 crores.
On June 10th
Siemens-RVNL Consortium received order from Bangalore Metro Rail Corporation Ltd. for Engineering, Supply, Erection, Testing and Commissioning of 33 KV Distribution, 750V DC Third Rail Traction Electrification including Traction
Substations, Auxiliary Substations and SCADA System for Phase-2A & Phase 2 B for a value of ₹394.23 crores.
On June 10th
RVNL received an order modification work for Up-gradation of existing 1 x 25 kV Electric Traction System to 2 x 25 kV AT Feeding System in Amla-Nagpur Section in Nagpur division of Central Railway for a value of ₹138.45 crores.
On June 14th
RVNL received an order from East Coast Railway for Provision of Automatic Block Signaling system with dual MSDAC and alteration in existing El/Pl/RRI stations in the section of Jakhapura-Nergundi, Khurda Road-Bhusundpur & Bhusundpur-Golanthra over Khurda Road Division of East Coast Railway for value of ₹160.08 crores.
On June 21st
RVNL received an order from south eastern railway for Design, Supply, Erection,
Testing & Commissioning of 132 KV Traction Substation, Sectioning post (SPs), and Sub sectioning post (SSPs) in 2x25KV System on Rajkhaswan- Nayagarh-Bolani section of Chakradharpur division of South EasternRailway for value of ₹191.53 crores.
On June 27th
RVNL received an order from North Central Railway for the Provision of EI based Automatic Signaling and other Associated works along with suitable indoor alterations in Electronic interlocking stations in the Dhaulpur Gwalior Section of the Jhansi division of North Central Railway for a value of ₹72.73 crores.
On July 2nd
RVNL received an order from Central Railway for OHE modification work for the upgradation of the existing 1 x 25 kV Electric Traction System to 2 x 25 kV AT Feeding System in the Wardha-Ballarshah Section in the Nagpur division of Central Railway for a value of ₹132.59 crores.
On July 9th
RVNL received an order from South Eastern Railway for the design, supply, erection,
testing & commissioning of 132 KV Traction Substation, Sectioning post (SPs), and Sub sectioning post (SSPs) in 2x25KV System on Kharagpur – Bhadrak section of Kharagpur division of South Eastern Railway for a value of ₹202.87 crores.
On July 9th
RVNL received an order from Maharashtra Metro Rail Corporation Limited for the construction of six (6) Elevated Metro Stations at Cantonment, Kamptee Police Station, Kamptee Municipal Council, Dragon Palace, Golf Club and Kanhan River.for a value of ₹187.34 crores.
On July 11th
RVNL received an order LoA from Central Railway for the OHE modification work for the upgradation of the existing 1 x 25 kV Electric Traction System to 2 x 25 kV AT Feeding System in the Amla-Nagpur Section in Nagpur division of the Central Railway for a value of ₹138.45 crores.
On July 12th
RVNL received an order LoA from Central Railway for the OHE modification work for the upgradation of the existing 1 x 25 kV Electric Traction System to 2 x 25 kV AT Feeding System in the Wardha-Ballarshah Section in Nagpur division of the Central Railway for the supply of ₹132.59 crores.
On July 15th
RVNL received an order LoA from East Coast Railway for the provision of Automatic Block Signaling system with dual MSDAC and alteration in existing El/Pl/RRI stations in the section of Jakhapura-Nergundi, Khurda Road-Bhusundpur & Bhusundpur-Golanthra over Khurda Road Division of East Coast Railway for value of ₹ 160.08 crores.
Future Plans Of RVNL
RVNL aims to grow its top-line revenue by 5-7% annually and wants to achieve a 15% profit margin annually. Currently, the company has an order book worth Rs 75,000-100,000 crores which looks robust. They focus on bidding for projects rather than depending on the nominated ones.
RVNL wants to expand into new international markets and wants to explore new segments like high-speed rail, signaling systems and metro projects. Even they wanted to explore solar projects through a JV with a South African Company. In FY 25 the company wants to participate in over 150 bids worth Rs 75,000 crores and wants to achieve an order inflow of Rs 20,000 – 25,000 crores annually.
RVNL focuses on improving its operational performance by delivering projects on a timely basis along with better risk management. RVNL has also made strategic investment plans in SPVs (special purpose vehicles) and JVs for new opportunities and wants to focus on emerging areas like the India- Middle East Economic Corridor.
Next post :- Sanstar Limited IPO Review – GMP, Financials And More