Rs 85,000 crore order book: Multibagger railway infra company bags 3 orders worth Rs 869.08 crore and a lowest bidder order worth Rs 124.37 crore from Ministry of Railways

Rs 85,000 crore order book: Multibagger railway infra company bags 3 orders worth Rs 869.08 crore and a lowest bidder order worth Rs 124.37 crore from Ministry of Railways

The stock gave multibagger returns of 210 per cent in just 1 year and a whopping 1,100 per cent in 3 years.

Rail Vikas Nigam Ltd, a Navratna company was established in 2003 by the Government of India for various rail infrastructure projects. The company has delivered good profit growth of 20.30 per cent CAGR over the last 5 years and has been maintaining a healthy dividend payout of 33 per cent. As of March 31, 2023, RVNL has a strong order book of over Rs 85,000 crores, focusing on railway, metro, and overseas projects.

Orders Bagged:

Order No 1: Rail Vikas Nigam Limited (RVNL) was awarded a contract by South Central Railway to design, procure materials for, and construct a 53.01-kilometre double-track railway line between Ankai and Karanjgaon stations (excluding these stations) in the Nanded Division. This project, which is part of the larger Aurangabad-Ankai Doubling Project, also includes electrification and signalling works. The contract value including GST is approximately Rs 440.01 crore and needs to be completed within 30 months.

Order No 2: RVNL was awarded another contract by the South East Central Railway (SECR) for a project on the Champa-Saragaon-Baraduar-Sakti section. This project involves upgrading the railway signalling system to an automatic system with electronic interlocking that relies on optical fibre communication (OFC). RVNL will modify the existing electronic interlocking system, supply and install new interlocking systems, MSDAC (Multi Station Diagnostic and Control System) and IPS (Integrated Power Supply) equipment and perform all indoor and outdoor civil works. This includes the construction and electrification of huts in the Champa-Sakti section. The contract value including GST is approximately Rs 38.10 crore and needs to be completed within 15 months.

Order No 3: RVNL secured a 3rd contract from Eastern Railway to construct the Sitarampur bypass line under the Asansol Division in Eastern India. This domestic contract involves construction work only and is expected to be completed within 24 months. The total project cost is Rs 390.97 crore (including GST). It is important to note that neither RVNL's promoters, promoter group, nor group companies have any stake in Eastern Railway, and this transaction will not be considered a related party transaction.

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Lowest Bidder (L1) Orders:

RVNL has emerged as the Lowest Bidder (L1) for the project awarded by Dakshin Haryana Bijli Vitran Nigam Limited (DHBVN) for the implementation of SCADA and DMS/OMS works in Gurugram under the Revamped Distribution Sector Scheme (RDSS). The contract, identified by Tender Id: 2023 HBC 299125 1, is a domestic order with significant terms and conditions outlined in the General Contract Conditions. The scope of work involves the implementation of SCADA and DMS/OMS systems to enhance the distribution network in Gurugram. The contract, valued at Rs 124,36,80,301.57 including applicable taxes, is to be executed over 30 months once bagged.

According to Quarterly Results, the net sales increased by 17.4 per cent to Rs 6,714.01 crore and net sales increased by 27.5 per cent to Rs 435.34 crore in Q4FY24 compared to Q4FY23. In its annual results, the net sales increased by 8 per cent to Rs 21,889.23 crore and net sales increased by 16.5 per cent to Rs 1,469.53 crore in FY24 compared to FY23. The Board recommended a final dividend of Rs 2.11 per share (i.e. 21.10 per cent) on the paid-up equity share capital for the financial year 2023-24.

In March 2024, the President of India’s portfolio sold 11,17,57,277 shares and decreased their stake to 72.84 per cent compared to 78.20 per cent in March 2023. The company has a market cap of over Rs 77,000 crore and the shares of the company have an ROE of 20.4 per cent and an ROCE of 18.7 per cent. The stock gave multibagger returns of 210 per cent in just 1 year and a whopping 1,100 per cent in 3 years. Investors should keep an eye on this railway infra stock.

Disclaimer: The article is for informational purposes only and not investment advice.

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