RVNL Shares Zoom Over 7% After Securing ₹837.67 Crore Contract From Eastern Railway

On Friday, November 22, 2024, Rail Vikas Nigam Ltd (RVNL) announced that it has received a Letter of Acceptance (LoA) from Eastern Railway for a significant infrastructure project worth ₹837.67 crore. The project involves essential construction activities including earthwork, bridge construction, and railway track laying.

Project Details and Scope

The project will span from IR Ch. 205.000 km to 260.2 km, covering the stretch between Kalipahari (inclusive) and Pradhankhuta (exclusive). It is a part of the multi-tracking railway BG line construction. The scope of work includes a range of construction activities such as earthwork, filling, blanketing, minor and major bridge construction, retaining walls, level crossings, and drainage works.

Joint Venture Partnership

RVNL is leading the project through its joint venture with SCPL, where RVNL holds a 74% stake and SCPL holds 26%. This joint venture will play a key role in the execution of the project, with RVNL’s share reflecting its dominant role.

Project Timeline and Completion

The project is scheduled for completion within 36 months, with RVNL focusing on delivering the infrastructure on time. The contract, awarded by a domestic entity, is not linked to any related-party transactions, ensuring transparency in the deal.

RVNL’s Financial Performance

In a separate financial update, RVNL reported a 27% year-on-year (YoY) decline in net profit, which fell to ₹286.9 crore from ₹394.3 crore in the previous year. The decline in profits is attributed to lower operating margins and reduced earnings. RVNL’s revenue from operations decreased by 1.2% YoY, standing at ₹4,855 crore compared to ₹4,914.3 crore in Q2 FY24. The company’s EBITDA also saw a 9% drop, reaching ₹271.5 crore, with EBITDA margins narrowing to 5.6% from 6% in the previous year.

On November 25, 2024, RVNL share price opened at ₹451.00 and touched the day high of ₹462.75 at 09:30 AM.

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