Rail Vikas Nigam Limited (RVNL) Share Price Target and Performance Analysis [2024 Update]

Indian Railways isn’t just a single entity but a network of multiple organizations working together to ensure smooth operations across the system. For instance, IRCTC handles ticketing and catering services, IRFC manages the financing needs for rolling stock, RailTel oversees information and communication technology, and IRCON handles railway construction projects both in India and abroad.

In this article, we’ll delve into another vital subsidiary of Indian Railways—Rail Vikas Nigam Limited (RVNL). We’ll explore its crucial role in developing railway infrastructure in India and analyze its share price performance to help you make informed investment decisions.

Rail Vikas Nigam Limited: An Overview

Rail Vikas Nigam Limited (RVNL) was established as a Public Sector Undertaking (PSU) in 2003 under the Ministry of Railways. It was formed to address the infrastructure deficit in Indian Railways, following the announcement of the National Rail Vikas Yojna by the late Prime Minister Atal Bihari Vajpayee in his 2002 Independence Day speech.

RVNL was created with two main objectives: raising extra-budgetary resources and implementing projects aimed at enhancing the capacity of rail infrastructure on a fast-track basis.

The company is responsible for laying new lines, doubling existing ones, rail bridge electrification, and other critical infrastructure projects. To fund these projects, RVNL raises extra-budgetary resources through a mix of equity and debt from banks, financial institutions, and multilateral agencies like the Asian Development Bank.

RVNL’s Business Model

As an extended arm of the Ministry of Railways, RVNL functions as an umbrella Special Project Vehicle (SPV) tasked with project development and resource mobilization. The company operates both through SPVs and subsidiaries, generating revenue by charging management fees on the total expenses incurred for its projects. The margins are as follows:

• 10% for national projects
• 9.25% for metro projects
• 8.5% for other plan heads

RVNL executes various railway infrastructure works, including new lines, gauge conversions, electrification, workshops, hill railway projects, institutional buildings, mega bridges, and metro railways. It consistently contributes around 30% of the total infrastructure development for Indian Railways each year.

To date, RVNL has commissioned over 15,500 km of railway infrastructure with a project expenditure of ₹1.25 lakh crore. The company has received an excellent MoU performance rating among Railway PSUs and was awarded “Navratna” status in May 2023.

RVNL Financial Performance

Revenue:
In FY23, RVNL’s revenue grew by 5.42%, reaching ₹21,285.51 crore from ₹20,190.97 crore in FY22. For the six months ending September 30, FY24, the company recorded a total income of ₹11,063.52 crore, marking a 10.53% increase from ₹10,009.16 crore in H1FY23.

Profit After Tax:
RVNL’s net profit increased by 16.57% year-over-year, reaching ₹1,268 crore in FY23 from ₹1,087 crore in FY22. For the first half of FY24, the company recorded a net profit of ₹737.51 crore, up 8.6% from ₹678.89 crore in H1FY23.

Key Financial Ratios

• Current Ratio: RVNL reported a slight decline in its current ratio to 2.02 times as of March 31, 2023, from 2.07 times in FY22.
• Debt-to-Equity Ratio: The company’s debt-to-equity ratio improved to 0.99 times in FY23 from 1.17 times in FY22.
• Net Profit Margin: The net profit margin for FY23 stood at 6.25%, up from 5.61% in FY22.
• Return on Capital Employed (ROCE): RVNL’s ROCE at the end of FY23 was 17.27%, compared to 16.11% in FY22.
• Return on Equity (ROE): The company’s ROE was 20.94% at the end of FY23, slightly down from 21.47% at the end of FY22.

RVNL Share Price Performance

RVNL’s IPO was launched in March 2019 at a price band of ₹17-19 per equity share. Although the IPO had a flat debut, the stock has delivered significant returns to its investors, with a CAGR of 91% over the last three years (December 2020 to December 2023).

RVNL has consistently rewarded its shareholders with dividends, paying ₹1.58 in 2021, ₹1.83 in 2022, and ₹2.13 in 2023.

The RVNL share price reached an all-time high of ₹199.25 on September 19, 2023, and the company’s market capitalization stands at ₹34,403 crore as of December 3, 2023.

Key Highlights and Future Prospects

• Infrastructure Contribution: RVNL contributes approximately 30% of Indian Railways’ annual infrastructure needs.
• Consistent Performance: For the past 12 years, RVNL has received the highest MoU rating of “Excellent” among all central public sector companies, a rating given by the Ministry of Finance.
• Robust Order Book: The company’s current order book exceeds ₹56,000 crore, with projects from both the Ministry of Railways and other bidding projects.
• Strategic Partnerships: RVNL has signed a shareholder agreement with Russia’s Transmashholding (TMH) to supply 120 Vande Bharat train sets and maintain these sets for 35 years.
• International Expansion: RVNL may soon sign projects worth over ₹300 crore with the Government of Kyrgyzstan, expanding its international operations.

Increased Capex by Indian Railways: A Boon for RVNL

The Government of India, alongside the Ministry of Railways, has been heavily investing in railway infrastructure. In FY24, the highest-ever capital outlay of ₹2.6 lakh crore has been earmarked, with major spending allocated for new lines, doubling, rolling stock, track renewals, and improving customer amenities.

Given its preferred status as the Ministry of Railways’ execution agency, RVNL is expected to be awarded significant infrastructure development contracts in the coming years. The increase in Capex, from ₹46,000 crore in FY14 to over ₹2.6 lakh crore in FY24, signals a continued focus on developing the railway sector as part of a broader effort to reduce logistics costs and improve transportation reliability.

FAQs

Is RVNL a good stock to buy?

RVNL (Rail Vikas Nigam Limited) has shown consistent performance in the past, with a strong order book and regular dividend payouts. However, as with any stock, it’s essential to conduct your own research, consider market conditions, and consult with a financial advisor before making any investment decisions.

What is the salary per month in RVNL?

The salary in RVNL varies depending on the position, experience, and department. Entry-level positions may start from around ₹30,000 to ₹50,000 per month, while senior roles can earn significantly higher, potentially over ₹1 lakh per month.

What is the future of RVNL?

The future of RVNL looks promising due to its critical role in developing railway infrastructure in India. The company’s strong order book, strategic partnerships, and continued government focus on infrastructure development suggest potential for growth.

RVNL share price target

The RVNL share price target depends on various factors including market conditions, company performance, and broader economic indicators. Investors often set a price target based on technical analysis, future earnings potential, and news developments.

RVNL upcoming projects

RVNL has a robust pipeline of upcoming projects focused on railway infrastructure development, including new lines, electrification, and modernization projects. For detailed information on specific projects, it’s best to refer to the company’s official announcements or financial reports.

All you need to know about RVNL salary

RVNL offers competitive salaries based on government pay scales, with additional benefits like bonuses, allowances, and retirement plans. Salaries vary depending on the position and experience level.

RVNL share price target

Analysts set RVNL share price targets based on projected earnings, market trends, and company performance. For the most current targets, it’s advisable to check the latest analyst reports or financial news.

RVNL upcoming projects

RVNL is involved in several high-profile projects including new rail line constructions, station upgrades, and electrification of routes across India. The specifics of these projects are often outlined in their quarterly reports.

Rail Vikas Nigam Limited: Private or Government?

Rail Vikas Nigam Limited (RVNL) is a government-owned company, operating under the Ministry of Railways in India. It is a Public Sector Undertaking (PSU) established to develop and strengthen the railway infrastructure in the country.

RVNL contractors list

RVNL works with various contractors for its infrastructure projects. The list of approved contractors is usually available on the company’s official website or through specific tender notices.

RVNL news today

To stay updated with the latest news about RVNL, including share price movements, project updates, and other developments, it’s best to follow financial news platforms, the company’s official website, or stock market apps.

RVNL salary

Salaries at RVNL vary based on the role and experience of the employee. The company offers competitive packages as per government pay scales, including allowances and benefits.

RVNL share news today

For the latest updates on RVNL’s share price and related news, checking financial news websites, stock market apps, or RVNL’s official press releases will provide current information.

Disclaimer: The securities mentioned are for illustrative purposes only and should not be considered recommendations. This article is for educational purposes only and does not constitute investment advice. Please consult your financial advisor before making any investment decisions.