RVNL jumps over 18 per cent

The shares of Rail Vikas Nikam Limited (RVNL) soared over 18 per cent in Monday’s trading session. The stock price has been moving northward since last three days.

The company was listed on the exchange on April 11, 2019, i.e. on last Thursday. Just a month ago, its initial public offer (IPO) was subscribed 1.8 times. The price range of the issue was fixed at Rs 17-19 per share.

RVNL executes railway projects which include new lines, gauge conversion, railway electrification, metro projects and bridges. Railways pay up a consolidated management fee to RVNL on the basis of annual expenditure incurred for the execution of projects. The breakup of the fee is as follows – 9.25 per cent for metro projects, 8.50 per cent for other plan heads and 10 per cent for national projects.

As of December 31, 2018, the company showcased a healthy order book of Rs. 77,504 crore. This is an impressive 10.2 times the revenue it generated in FY18. Presently, 102 projects are in progress. Of the total order book, 96.11 per cent comprises railways projects.

On the consolidated annual front, the company reported revenue of Rs 7597.36 crore in FY18 as against Rs. 5,919.62 crore in FY17, posting a YoY growth of 28.34 per cent. EBITDA rose to Rs 382.44 crore in FY18 as against Rs 274.26 crore in FY17, registering an increase of 39.44 per cent. PAT climbed to Rs. 569.52 crore in FY18 from Rs. 438.74 crore in FY17, posting a growth of 29.81 per cent. Consequently, EPS soared to Rs. 2.73 in FY18 from Rs. 1.55 in FY17, thereby rising 76.13 per cent.

On the back of good valuation, healthy financial performance, robust order book and government impetus to infrastructure, RVNL seems to be a good investment for the long-term.

On Monday, the shares of RVNL opened at Rs. 19.95, and hit a high and low of Rs. 23.65 and Rs. 19.90, respectively. At 2:33 pm, the stock was trading at Rs. 23.35, up 18.23 per cent.