Shares of state-run Rail Vikas Nigam Ltd (RVNL) fell over 6% to intra-day lows of Rs 443.30 on the NSE after the company announced its financial results for the September quarter, revealing a significant decline in profit and a modest dip in revenue.
Profit & Revenue Decline
RVNL reported a 27% year-on-year (YoY) drop in net profit to Rs 286.9 crore, down from Rs 394.3 crore in the same period last year, impacted by lower operating margins and reduced earnings.
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The company’s revenue from operations declined 1.2% YoY to Rs 4,855 crore, compared to Rs 4,914.3 crore in Q2 FY24. EBITDA fell 9% to Rs 271.5 crore, with margins shrinking to 5.6% from 6% in the previous year, reflecting increased operational pressures.
Quarter-on-Quarter Improvement with Tax Expenses
On a quarter-on-quarter (QoQ) basis, RVNL’s profit rose by 28.1%, while revenue increased by 19.2% in Q2 FY25, showing some sequential improvement. Tax expenses for the quarter declined slightly by 0.5% YoY to Rs 4,731.5 crore but rose 17.2% QoQ.
Technical Outlook on Stock
Commenting on the Technical Outlook Anshul Jain, Head Research Analyst at Lakshmishree investment and securities said that After a strong surge post-Budget 2024, RVNL recently tested a significant support level at Rs 423 and initially rebounded. However, the recovery formed a bearish flag pattern, indicating potential weakness. Today, the stock broke below this pattern at Rs 460, signaling further downside risks. With the immediate support again at Rs 423, a failure to hold this level could push RVNL down to the next target at Rs 311.
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Jain also said we maintain a cautious outlook on railway and defense sector stocks since Budget 2024. The sector faces increased volatility, and current technical indicators suggest a bearish trend ahead. Investors should be cautious, as further downside is possible, especially if broader market conditions remain under pressure.
Stock Performance in Last One Year
RVNL shares have shown mixed performance over various time periods. In the past month, the stock has posted a decline of over 7%. However, the last six months have seen a notable increase of 68.35%,
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