Rs 14,50,47,00,000 Orders Win! Railway Stock RVNL Gains 9% On Big Deals From Maharatna PSU; 1,841% Returns

Rail Vikas Nigam (Ltd), the finance services provider under the Railway Ministry, rallied significantly on June 6 after it bagged a massive order from Maharatna PSU company, NTPC. Overall, this week, RVNL alone has won major orders worth Rs 1,450 crore.

After rising by nearly 8.8% with an intraday high of Rs 383.65 apiece, RVNL's share price ended at Rs 368.80 apiece up by 4.4% on BSE with a market cap of Rs 76,895.54 crore.

Railway stocks are on a roller coaster ride this week, with one of the biggest single-day selloffs seen on June 4 during the counting for the 2024 election verdict. RVNL shares faced the heat of bears too and fell by over 13% on BSE during that day. This was after RVNL gained 6% on June 3 in hopes of a majority win by the PM Modi-led government.

After the poll results, the NDA government took the lead with 294 seats, winning a hattrick in their regime. This led to relief in the stock market on June 5, and RVNL's share price gained by nearly 7% before ending at Rs 351.55 apiece up by 0.50%.

But on June 6, RVNL shares accelerated after it bagged new orders worth Rs 495.14 crore from Maharatna PSU power generating company, NTPC.

As per the regulatory on Thursday, RVNL said, has received a Letter of Award from National Thermal Power Corporation (NTPC) for the "Project Execution Agency (PEA) contract for execution of Balance Civil & HM works of Barrage Complex including part HRT package of Rammam Hydro Electric Project Stage-III (3x40 MW). The transaction is worth Rs 495.14 crore.

The new order with NTPC boosted RVNL shares the most this week even when the railway company bagged back-to-back orders between June 3-5.

On June 5, RVNL emerged as the lowest bidder from Dakshin Haryana Bijli Vitran Nigam Limited for "Implementation of SCADA and DMS/OMS works in Gurugram Revamped Distribution Sector Scheme (RDSS) in DHBVN (Dakshin Haryana Bijli Vitran Nigam). This order is for the consideration of Rs 124.36 crore.

Also, on Wednesday, RVNL won a new order worth Rs 390.97 crore from Eastern Railway for the construction of the Sitarampur bye pass line under the Asansol Division of Eastern Railway.

Meanwhile, on June 3, the company announced that it an order worth Rs 440 crore from South Central Railway for Engineering, Procurement and Construction (EPC) tender for proposed "Doubling of Track between Ankai station (Excluding) at KM 16.00 (Ch: 16000) & Karanjgaon stations (Excluding) at Km 69.01 (Ch:69010) (i.e. 53.01 Km) including Electrification and Signaling works in connection with Aurangabad-Ankai Doubling Project in Nanded Division of South Central Railway.

Cumulatively, RVNL won up to Rs 1,450.47 crore from June 3-6.

RVNL is a multi-bagger of the railway basket. YTD, the stock has more than doubled by 103% on BSE. While in a year, the stock gained by 190%. In the long term, the stock is up by 1,241.09%. But its all-time gains are even higher by 1,767.34% on the exchange.

But did you know RVNL has created impressive wealth for those investors who bought its shares in its IPO? Since its IPO, the stock has zoomed by 1,841.05%. RVNL launched its Rs 481.57 crore IPO at price bands of Rs 17 to Rs 19 in March 2019. While the IPO subscribed 1.82 times, RVNL fixed the IPO issue price at Rs 19 for the public offer.

Should you buy RVNL shares?

As per the Trendline data, the consensus recommendation from 2 analysts for Rail Vikas Nigam Ltd. is HOLD. The 1-year average target price in RVNL is Rs 241, lower than the current price.

On the other hand, RVNL was selected among the top picks by Motilal Oswal as Modi stocks to shine ahead. Motilal selected these stocks with expectations of a 20% potential upside in them within a time frame of 3-6 months.

On RVNL, Motilal said, "RVNL Stock gave range breakout above on weekly scale and trading at lifetime high territory. Buying is visible across railway stocks which may take prices higher."

RVNL works as the construction arm of the Ministry of Railways for project implementation and transportation infrastructure development. The organization undertakes project execution from concept to commissioning and creates project-specific SPVs.