RVNL bags new orders; railway stock jumps 10%

Shares of state-owned Rail Vikas Nigam Limited (RVNL) surged 10% to touch a high of ₹598 apiece on the BSE today, after the company secured new orders worth ₹389 crore. The railway stock opened higher at ₹564.80 against the previous closing price of ₹543.15 on the BSE.

The state-owned railway company has received a Letter of Acceptance (LoA) from Maharashtra Metro Rail Corporation (Nagpur Metro) for the construction of six elevated metro stations under Reach 2B of NMRP Phase 2, according to the company’s statement. The project's cost is ₹187.34 crore and includes the construction of six stations: Cantonment, Kamptee Police Station, Kamptee Municipal Council, Dragon Palace, Golf Club, and Kanhan River Metro Station.

This domestic project is expected to be completed in 30 months, the state-owned railway company states in a filing exchange.

In another development today, RVNL signed a Memorandum of Understanding (MoU) with TATWEER Middle East and Africa LLC. This MoU aims to leverage RVNL's expertise in the railway sector to develop joint capabilities in the design and execution of various rail projects in the MENA region and European countries. Additionally, it includes the supply, design, implementation, and commissioning of smart city, digital transformation, and professional engineering services, it adds.

In a separate update today, RVNL announced in a filing that the state-owned company was the lowest bidder (L1) for the design, supply, erection, testing, and commissioning of a 132 KV traction substation, sectioning posts (SPs), and sub-sectioning posts (SSPs) on the Kharagpur-Bhadrak section of the Kharagpur division of South eastern railway. This domestic project is valued at ₹202.87 crore, and is scheduled to be finished in 18 months.

By the end of the March quarter of FY24, the company completed 12 projects during FY23-24, resulting in a total of 152 completed projects. As of March 31, 2024, the order book was valued at ₹85,000 crore.

RVNL, operating under the Ministry of Railways, achieved record-breaking results in both revenue and profit during this period. Revenue for the entire fiscal year FY24 witnessed an increase of 7.15%, reaching ₹21,889 crore, while profit surged by 17.94% to ₹1,575 crore compared to the previous year.

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."