RVNL shares fall 4% on Q4 earnings; where's the stock headed now?

Shares of Rail Vikas Nigam Ltd (RVNL) snapped two-day gaining streak today after the railway firm announced its Q4 and annual earnings. RVNL opened 3.66% lower at Rs 117.10 against the previous close of Rs 121.55 on BSE. Later, the stock fell 4.57% to Rs 116 on BSE. Total 7.74 lakh shares of the firm changed hands amounting to a turnover of Rs 9.06 crore. Market cap of RVNL fell to Rs 24,394 crore on BSE. The stock hit a 52-week low of Rs 29 on June 21, 2022 and a record high of Rs 144.50 on May 8, 2023.

In terms of technicals, the relative strength index (RSI) of RVNL stands at 61.6, signaling it's trading neither in the overbought nor in the oversold zone. RVNL stock has a one-year beta of 0.8, indicating very low volatility during the period. Rail Vikas Nigam stock is trading higher than the 5 day, 50 day, 100 day and 200 day moving averages but lower than 20 day moving averages.

The PSU stock remains a multibagger, rising 261% in a year and gaining 71% in 2023. On the other hand, the 30-stock Sensex has gained 12.36% in a year and risen 3.29% in 2023. The parent index BSE 500 has climbed 11.25% in a year and risen 2% on a year-to-date basis.

Gaurav Bissa, VP, InCred Equities said, "The most recent breakout in RVNL was seen at Rs 84 levels post which it witnessed a strong upside to Rs 140 levels. The stock formed bearish dark cloud cover pattern on the weekly charts some time back which is a reversal pattern in nature. This pattern was followed by a few weak candles suggesting the stock can witness incremental profit booking in the coming weeks. The next set of support is seen at Rs 100, which can be a good level to buy the stock for a fresh upside till Rs 140-150 zone."

Rail Vikas Nigam reported a 5% fall in consolidated net profit to Rs 359.3 crore compared to Rs 378 crore in the corresponding period last year. Revenue from operations in Q4 fell 11% to Rs 5,719.8 crore compared to Rs 6,437.5 crore in the year-ago period. EBITDA fell 8.33% to Rs 374.37 crore in Q4 against Rs 408.38 crore in the March quarter of 2022.

On an annual basis, net profit zoomed 28% to Rs 1420 crore for the fiscal ended March 2023 against Rs 1110 crore profit for the fiscal ended March 2022. Revenue climbed 4.64% to Rs 20,281 crore in the March 2023 fiscal against Rs 19,381 crore for the fiscal ended March 2022. EBITDA zoomed 5.39% to Rs 1246.77 crore in the last fiscal against Rs 1182.96 crore in the March 2022 fiscal.

Abhijeet from Tips2trades said,"Below average Q4FY23 results have expectedly ensured that RVNL stock price could remain bearish with strong resistance at Rs 122.4 on the Daily charts. A daily close below support of Rs 111 could lead to target of Rs 88 in the near term."

The board recommended a final dividend of Rs 0.36 per share, that is 3.60 per cent on the paid-up equity share capital for the financial year 2022-23, upon the approval of shareholders. The dividend will be paid within 30 days from the date of its declaration at the company's meeting.

RVNL is an executing arm of Indian Railways and works for and on behalf of the ministry for projects assigned to it for execution. 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, project and contract management.

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