Rail Vikas Nigam Ltd (RVNL) experienced a significant surge in its share price, skyrocketing by more than 15% during intraday trades on Tuesday. This substantial leap propelled the share price to an unprecedented high of ₹345.90 on the National Stock Exchange (NSE), marking a remarkable 190% increase over the past year. This surge is not just a market fluctuation, but a clear testament to RVNL’s robust performance and potential for future growth, rewarding investors with substantial returns and fostering a positive market sentiment.
The surge in RVNL’s share price is not solely a result of market dynamics, but also a strategic win for the company. On Monday, RVNL announced that it had secured a Letter of Acceptance from the South Eastern Railway’s Kharagpur division.
This order, which involves upgrading the electric traction system from 1 x 25 KV to 2 x 25 KV on the Kharagpur (Excl.)-Bhadrak (Excl.) segment, is a clear testament to RVNL’s strong order book and its ability to meet the division’s ambitious 3000 MT loading target. The project, which encompasses design, supply, erection, testing, and commissioning of the new system, is projected to be completed in 18 months at just over ₹148 crore, further bolstering stakeholder confidence in the company’s future prospects.
In addition to this significant order win, RVNL recently announced its financial results for the March 2024 quarter and fiscal year 2023-24. The company reported a substantial 33.2% year-on-year increase in net profit, reaching ₹478.6 crore in Q4FY24, up from ₹359.25 crore in the same quarter last year. This impressive growth was driven by solid revenue, which rose 18.8% year-on-year to ₹6,714.01 crore, and improved operating performance, with earnings before interest, tax, depreciation, and amortization (EBITDA) growing 21.8% to ₹456 crore. These positive financial results underscore RVNL’s financial stability and potential for future dividends, further attracting potential investors.
RVNL’s board has also recommended a final dividend of ₹2.11 per share for 2023-24, contributing to positive investor sentiment. The company’s robust financial results, attractive dividend yield, and increasing order flow not only boost its forward earnings outlook but also instill a strong sense of confidence in its future performance.