RVNL shares down 10% in a month; time to accumulate this multibagger rail PSU stock?

Shares of Rail Vikas Nigam Ltd (RVNL) on Wednesday settled 0.37 per cent higher at Rs 563.75. At this price, the stock has slipped 9.65 per cent in the past one month. Despite the mentioned drop, the multibagger rail PSU scrip has 209.50 per cent on a year-to-date (YTD) and 352.81 per cent in a year.

Railway stocks, including RVNL, have been in a consolidation phase in the recent past, said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.

"RVNL is one of the strong stocks in the rail infra theme. One can hold on to the stock for a medium- to long-term perspective. Investors can add this stock on dips, given the counter's inclusion in MSCI's index. Also, the state-owned firm's earnings visibility looks strong," Bathini added.

Investors can consider buying RVNL shares at current levels for a target price of Rs 626, said StoxBox. "Despite weak first-quarter (Q1 FY25) results, with a 27 per cent year-on-year (YoY) revenue decline and a 35 per cent drop in profit after tax (PAT), RVNL remains optimistic due to its strong order book of Rs 83,200 crore and strategic expansion, including a new subsidiary in Uzbekistan and an MoU with an Israeli partner. The company expects a revenue rebound in the remaining quarters, aiming for Rs 17,700 crore, an 8 per cent YoY increase," it stated.

On technical setup, support on the counter could be seen at Rs 550, followed by Rs 515 level. And, a series of resistance may be found in the Rs 575-620 zone. Only a decisive close above the Rs 600-620 range can bring fresh traction, an analyst said.

"RVNL is in a time-wise corrective phase. The stock has a strong support of around Rs 515 sub-zone. On the higher end, a series of resistance can be seen in the Rs 600-620 range and a decisive breakthrough can only trigger fresh traction in the counter," said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.

"Support will be at Rs 550 and resistance at Rs 575. A decisive close above Rs 575 level may trigger a further upside towards Rs 600. The expected trading range will be between Rs 535 and Rs 600 for the short term," said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers.

As per BSE, the company's stock has a price-to-equity (P/E) ratio of 86.93 against a price-to-book (P/B) value of 14.89. Earnings per share (EPS) stood at 6.46 with a return on equity (RoE) of 17.12.

Around 5.89 lakh shares changed hands on BSE today. The figure was lower than the two-week average volume of 24.30 lakh shares. Turnover on the counter came at Rs 33.17 crore, commanding a market capitalisation (m-cap) of Rs 1,17,543.01 crore.

RVNL is an executing arm of Indian Railways and works for and on behalf of the ministry to execute projects assigned to it. It works on a turnkey basis and undertakes the full cycle of project development from conceptualisation to commissioning including stages of design, preparation of estimates, calling and award of contracts, projects and contract management.

As of June 2024, the government held a 72.84 per cent stake in the rail PSU.