RVNL shares snap-3 day gain; drop 7% as Q2 misses estimates
Shares of Rail Vikas Nigam Ltd (RVNL) plunged 7% in early trade on Friday after the state-owned railway-related company reported lower than expected earnings in the September quarter.
Paring three sessions gains, RVNL shares declined as much as 7% to ₹444, while the market capitalisation slipped below ₹94,800 crore. The railway stock opened lower at ₹448.20 against the previous closing price of ₹477.55 on the BSE. In the past three sessions, the PSU stock had risen nearly 8%.
At the current level, the shares of RVNL trade 31% lower than its all-time high of ₹647 touched on July 15, 2024. The stock, however, has risen 185% against its 52-week low of ₹155.45 touched on November 10, 2023.
The stock has turned multibagger in the last one year, with the counter gaining 180% during this period. In the last six months, the stock added 68%, while it surged 150% in the calendar year 2024. The largecap stock has seen a correction of over 6% in a month.
In August this year, RVNL shares were included in the Morgan Stanley Capital International (MSCI) Global Standard Index for emerging markets. It was added to the largecap section of the MSCI emerging markets index.
For the second quarter ended September 30, 2024, RVNL posted a 27.24% year-on-year (YoY) drop in its net profit at ₹286.88 crore as against ₹394.26 crore in the corresponding period last year. Revenue from operations dropped 1.21% to ₹4,854.95 crore from ₹4,914.32 crore in the same period last fiscal.
On a sequential basis, the profit rose by 28.12% and revenue increased by 19.18% in the year ago period.
For the first half of the current fiscal, the rail PSU posted a profit of ₹510.82 crore versus ₹737.51 crore in H1 FY24. The total income also dropped to ₹9472.82 crore in H1 FY25 from ₹11,063.52 crore in the same period last fiscal.
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As of March 31, 2024, the order book of RVNL, which comes under the Ministry of Railways, stood at ₹85,000 crore. In FY 23-24, it completed 12 projects and the cumulative completed projects stood at 152 at the end of the March quarter of FY24.
For the full financial year FY24, RVNL clocked a revenue growth of 7.15% at ₹21,889 crore, while profit grew 17.94% to ₹1,575 crore as compared to the previous fiscal. The management in the earnings call said, “We want to grow the top line at a rate of around 5% to 7%. And to grow like this, all the time we want to maintain an order book of around ₹75,000 crore to ₹1 lakh crore. ₹1 lakh crore is an aspirational target.”
The board of the company also declared a final dividend of ₹2.11 per share (i.e. 21.10%) for the financial year 2023-24, subject to shareholders’ approval.
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