In an interaction with Sanjeeb Kumar Director Finance, Rail Vikas Nigam Limited
"RVNL is Determined To Grow Substantially"
In Q4FY23, the company’s revenue from operations registered a decline of 11 per cent on a YoY basis to ₹ 5719.8 crore, while the net profit of the company dipped by 5 per cent from the corresponding quarter last year. What were the contributing factors to the company’s performance?
The financial year 2022-23 has been an important year for the growth trajectory of RVNL. While the Q4FY23 numbers don’t look promising, as you mentioned in your question, the fact is that we have achieved steady growth, both in terms of physical and financial, in this financial year. Our competence has made us win a number of projects, the results of which would show up in our financials in the coming quarters, and we are determined to grow substantially.
Could you provide insights into the company's order book and its execution plans? What is the target for the order book that the company aims to achieve?
At present, our order book is ₹ 65,000 crore out of this ₹ 35,000 crore is on a nomination basis and ₹ 30,000 crore is on winning the bids in open competition. It has only been a year and 10 months since we started participating in open bidding in the market, and have already bagged many contracts. Our key focus areas are: Tunnelling works, Metro projects, Mega Bridges, and also overseas projects where the funding is assured. Our recent wins comprise two (2) Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company Ltd (MPPKVVCL) projects in Jabalpur and three (3) underground Projects of Chennai Metro Rail. We may mention here that our first bid in the market was for metro projects and the Indore Metro Project was one of our first big wins.
As regards the Chennai Metro Projects, first we won the Chennai elevated metro corridor project order in January 2023, which is for about 10 km elevated via duct and 9 metro stations. We have already established a casting yard and other development work is going on in full swing. The recent three (3) orders for Chennai Metro which is for the development of underground stations. The machines which will be used in this project will be unique as they’ll be ‘Make in India’ machines aligned with the vision of the Hon’ble PM. We have been able to achieve an all-time high parameter and going forward both our top line and bottom line will grow. We are also equally committed towards our international orders, and we are moving from Local Rail Infra, towards Global All Infra.
Could you provide some information about your international projects and their current status of progress?
RVNL bagged the first offshore order of ₹ 1540 crore for the development of a port and construction of allied infrastructure overseas in Maldives. The agreement for this strategic project of the Government of India was signed in January 2023 and the work has taken off well.
The second overseas project worth mentioning is in the Republic of Kyrgyzstan Balykechy & Kara-Kecheline line. A Closed Stock Company “KyrgyzindustryRVNL” has been incorporated in December 2022. A DPR has been prepared for the Balykechy & Kara-Kecheline line with a total cost of USD 2.3 billion. Kyrgyzstan Govt has formed a working group to examine the DPR and then get the approval of the cabinet for transferring the work to the Closed Joint Stock Company “Kyrgyzindustry- RVNL”. We are also focusing on railway infrastructure overseas in African countries and in neighbouring countries like Bangladesh and Sri Lanka.
Can you shed some light on the earnings outlook for FY24?
In FY24, the earnings outlook is very promising, with a no of Railway Projects getting commissioned during the year. We will also be delivering the Indore Metro Project during FY24. Revenues from other projects including the overseas Project would start flowing. FY23 was the year of winning projects in the market. While we hope our winning spree would continue in FY24, the projects would start giving returns in FY24 and boost our earnings. We are very positive about our earnings outlook in FY24.
Could you provide an overview of the company's management consultancy business? What margins are you aiming for in this segment, and what is the outlook for the management consultancy business going forward?
Our management consultancy business is on an even keel, after initial detailing and adjustments. Our PMC contracts have stabilised and consultancy projects from NHIDCL are also progressing well. We have also won contracts for DPR for Railway siding and looking more in this area where we have special skills and knowledge base.