RVNL shares rise 10% in early deals, here's why

Shares of Rail Vikas Nigam Ltd (RVNL) gained 10% in early deals on Monday after the state owned firm said its joint venture with SCPL has received a letter of acceptance from Eastern Railway for a project worth Rs 837.67 crore. In early deals, RVNL shares climbed 10.07% to Rs 462.75 on BSE. Market cap of RVNL stood at Rs 93,513 crore on BSE. RVNL shares have a one-year beta of 1.5, indicating high volatility during the period. 

In terms of technicals, the relative strength index (RSI) of RVNL stands at 38.8, signaling it's trading neither in the overbought nor in the oversold zone. Rail Vikas Nigam shares are trading lower than the 50 day, 100 day, 150 day but higher than the 5 day, 10 day, 20 day, 30 day and 200 day moving averages.    

The project involves earthwork in cutting and filling, blanketing, construction of minor and major bridges, RUB, ROB, retaining wall, level crossing, side drain, catch water drain, P.way work, and other ancillary works related to the construction of a multi-tracking railway BG line.

"M/s RVNL- SCPL (JV) has received Letter of Acceptance from Eastern Railway for “Earthwork in cutting and filling, blanketing, construction of minor bridges, major bridges, RUB, ROB, retaining wall, level crossing, side drain, catch water drain, P.way work and other ancillary works from IR Ch. 205.000 km to 260.2 Km between Kalipahari (inc.) to Pradhankhuta (exc.) in connection with construction of multi tracking Railway BG line," said RVNL in a communication to bourses. 

The order is to be executed in 36 months. 

RVNL clocked a 27.24 per cent year-on-year (YoY) fall in its September 2024 quarter net profit. In Q2, profit came at Rs 286.88 crore as against Rs 394.26 crore in the year-ago period. Revenue from operations slipped 1.21 per cent to Rs 4,854.95 crore from Rs 4,914.32 crore in the corresponding period last year.

On a sequential basis, RVNL's profit climbed 28.12 per cent and revenue rose 19.18 per cent in the July-September 2024 quarter. In Q2 FY25, tax expenses slipped 0.49 per cent (YoY) to Rs 4,731.52 crore but surged by 17.21 per cent QoQ.

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.