The share price of RVNL fell as much as 7.3% to an intra-day low of Rs 401.85 after Budget allocation for Indian Railways remained unchanged in the Union Budget 2025-26.
The budget set for Indian Railways in the fiscal year 2025-26 is Rs 2.65 lakh crore, which is unchanged from the allocation of the previous year. The budget for customer facilities in the Railways, as well as investments in public sector enterprises and joint ventures, has been reduced.
This has influxed negative sentiments not just for RVNL but overall around the railway stocks. The share price of RITES fell 7.4% to trade at Rs 235.75, Titagarh Rail Systems dropped 6.3% to quote at Rs 895.50, RailTel Corp lost 6.4% to trade at Rs 354.35, BEML slipped 5% to Rs 3,482.75, and many other railway stocks plunged in trade.
In a research note the brokerage firm, Axis Securities, has given a ‘Buy’ rating on the stock with a target price of Rs 501. It said that the company’s order book stood at Rs 83,221 crore as of June 2024, across various segments like Railway EPC, Coach production & Electrification works. This gives revenue visibility for the next 3-4 years. “With its established track record of execution, the company is positioned for steady revenue growth, projecting an 8% CAGR over the period from FY23 to FY26,” said Axis Securities.
“Rail Vikas Nigam has an illustrious legacy spanning over more than two decades. After successfully completing more than 150 Railway projects, and successfully executing new Railway projects under the innovative PPP model by setting up a number of Special Purpose Vehicles (SPVs), RVNL today has migrated from its original mandate of ‘rail infra’ projects to the ever-expanding opportunities of ‘All Infra’ i.e. from #Local Rail Infra to Global All Infra,” said the brokerage firm.
RVNL’s performance in recent quarter
The company recorded a 27.24% year-on-year fall in Q2 FY25 net profit. Its profit came at Rs 286.88 crore for the quarter under review as against Rs 394.26 crore in the year-ago period. Its revenue from operations also dipped 1.21% to Rs 4,854.95 crore from Rs 4,914.32 crore in the corresponding period last year.
RVNL Vs Nifty 50
The share price of RVNL has risen more than a per cent in the past five trading days.
» Read More
