Rs 85,000 crore order book: Multibagger railway infra company bags 2 orders worth Rs 186.37 crore and 2 lowest bidder orders worth Rs 260 crore from Ministry of Railways
The stock gave multibagger returns of 220 per cent in just 1 year and a whopping 1,200 per cent in 3 years.
Rail Vikas Nigam Ltd, a Navratna company was established in 2003 by the Government of India for various rail infrastructure projects. The company has delivered good profit growth of 20.30 per cent CAGR over the last 5 years and has been maintaining a healthy dividend payout of 33 per cent. As of March 31, 2023, RVNL has a strong order book of over Rs 85,000 crores, focusing on railway, metro, and overseas projects.
Orders Bagged:
Order No 1: RVNL was awarded a contract by the South Eastern Railway (SER) to upgrade the electric traction system along a specific section of railway tracks. This project involves designing, supplying, installing, testing, and commissioning a new system that will provide double the electrical power (2 x 25 KV instead of 1 x 25 KV) for the Kharagpur (excluding) to Bhadrak (excluding) section within the Kharagpur division. The overall goal is to improve efficiency and handle a higher freight load capacity of 3000 MT. The project, with a domestic tender reference number SER-OHE-KGP-BHC-2x25KV, is expected to be completed within 18 months and has an estimated cost of approximately Rs 148.27 crore.
Order No 2: RVNL was awarded another contract by the South East Central Railway (SECR) for a project on the Champa-Saragaon-Baraduar-Sakti section. This project involves upgrading the railway signalling system to an automatic system with electronic interlocking that relies on optical fibre communication (OFC). RVNL will modify the existing electronic interlocking system, supply and install new interlocking systems, MSDAC (Multi Station Diagnostic and Control System) and IPS (Integrated Power Supply) equipment, and perform all indoor and outdoor civil works. This includes the construction and electrification of huts in the Champa-Sakti section. The contract value including GST is approximately Rs 38.10 crore and needs to be completed within 15 months.
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Lowest Bidder (L1) Orders:
L1 Order No 1: RVNL has been selected as the lowest bidder (L1) by Maharashtra Metro Rail Corporation Limited (Nagpur Metro) for the construction of six elevated metro stations in Nagpur. These stations will be built along Reach 2B of Nagpur Metro Rail Project (NMRP) Phase 2, specifically between Ch. 7576.78 mm to Ch 13457.76 m. The project includes Cantonment, Kamptee Police Station, Kamptee Municipal Council, Dragon Palace, Golf Club and Kanhan River Metro Stations. The specific terms of the contract are not publicly available (usually referred to as General Contract Conditions), but it will likely follow standard Indian contracting practices. This is a domestic contract awarded to an Indian entity (RVNL). The construction period is set for 30 months, with a total project cost of approximately Rs 187.34 crore (inclusive of GST).
L1 Order No 2: RVNL has been awarded another contract by the North Central Railway as the lowest bidder (L1) for a project to upgrade the signalling system along the Dhaulpur-Gwalior section of the Jhansi division. This project involves implementing automatic signalling based on Electronic Interlocking (EI) technology, along with continuous track circuiting to improve safety and efficiency. RVNL will also make necessary modifications inside electronic interlocking stations, Route Relay Interlocking (RRI) stations, and Panel Interlocking (PI) stations along the route. The specific terms of the contract (General Contract Conditions) are not publicly available. This is a domestic contract awarded to an Indian company (RVNL). The project needs to be completed within 455 days with a total value of approximately Rs 72.74 crore (inclusive of GST).
According to Quarterly Results, the net sales increased by 17.4 per cent to Rs 6,714.01 crore and net sales increased by 27.5 per cent to Rs 435.34 crore in Q4FY24 compared to Q4FY23. In its annual results, the net sales increased by 8 per cent to Rs 21,889.23 crore and net sales increased by 16.5 per cent to Rs 1,469.53 crore in FY24 compared to FY23. The Board recommended a final dividend of Rs 2.11 per share (i.e. 21.10 per cent) on the paid-up equity share capital for the financial year 2023-24.
In March 2024, the President of India’s portfolio sold 11,17,57,277 shares and decreased their stake to 72.84 per cent compared to 78.20 per cent in March 2023. The company has a market cap of over Rs 79,000 crore and the shares of the company have an ROE of 20.4 per cent and an ROCE of 18.7 per cent. The stock gave multibagger returns of 220 per cent in just 1 year and a whopping 1,200 per cent in 3 years. Investors should keep an eye on this railway infra stock.
Disclaimer: The article is for informational purposes only and not investment advice.
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