RVNL Shares Dip Amid Weak Q2 Results, but New Contract Secured

Rail Vikas Nigam Limited (RVNL), a state-owned railway company, saw its share price drop by up to over 5% to an intraday low of ₹443.30 per share on Friday, November 8, 2024. This decline followed the announcement of weaker-than-expected results for the second quarter of FY25, which were released after market hours on November 07, 2024.

Q2 FY25 Results Highlights

RVNL reported a 27.2% drop in profit year-on-year (YoY), reaching ₹287 crore in the September quarter of FY25, down from ₹394.3 crore in the same quarter last year. The company’s revenue fell slightly by over 1% to ₹4,855 crore in Q2FY25, compared to ₹4,914.3 crore in Q2FY24.

On the operational side, RVNL’s earnings before interest, tax, depreciation, and amortisation (EBITDA) dropped 9% YoY to ₹271.5 crore, compared to ₹298.2 crore last year. This led to a 40 basis points reduction in the EBITDA margin, down to 5.6% in Q2FY25 from 6% in Q2FY24.

New Contract Win

Despite the disappointing quarterly results, RVNL recently received a letter of acceptance for a project valued at over ₹180 crore from East Central Railway. This order was announced on Wednesday, November 6, 2024.

Company Background and Operations

Headquartered in New Delhi, RVNL was established in 2003 and specialised in constructing rail infrastructure projects across India. Its portfolio includes the development of new railway lines, doubling and gauge conversion projects, electrification, workshops, metro projects, and bridges, including cable-stayed structures. The company also handles financial resource mobilisation for its projects, serving clients like Indian Railways and various government ministries and departments. With a market capitalisation of ₹95,076.92 crore, RVNL is part of the BSE200 category.

On November 08, 2024, RVNL share price opened at ₹444.00 and touched the day low of ₹443.30 as of 10:48 AM on NSE.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.