One railway stock was riding high on Thursday, January 16, as much as giving nearly 12% returns to its investors in a single day. The reason is the huge order book that it bagged from government-backed telecom major BSNL. The new orders are worth Rs 13,235 crore precisely. Who is it? Not the railway giant IRFC, but its rival Rail Vikas Nigam (RVNL).
RVNL Share Price:
After market hours, the stock climbed by 10.51% to close at Rs 411 apiece on BSE with a market cap of Rs 85,694.33 crore. During trading hours, the stock jumped as much as 11.6% on the BSE. The stock's 52-week high and low is at Rs 647 apiece and Rs 213 apiece respectively.
The price-to-equity ratio of RVNL stock is 66.94x, while the return on equity is at 16.10%.
RVNL-BSNL Order Book:
On January 16, RVNL said, "A Letter of Acceptance has been received from Bharat Sanchar Nigam Limited (BSNL) for "Development (Creation, Upgradation and Operation & Maintenance) of Middle mile network of Bharat Net on Design Build Operate and Maintain (DBOM) Model." This order is worth Rs 9,613.42 crore.
The transaction involves the development Of the Middle mile network of Bharat Net on the Design Build Operate and Maintain (DBOM) Model. The period for executing the order is 3 years for construction & 10 years of Maintenance Contract @ 5.5% per annum of capex for 1st 5 years & 6.5% per annum of capex for the next 5 years.
Earlier, on January 15, RVNL announced another order worth Rs 3,622.14 crore from BSNL for the development Of the Middle mile network of Bharat Net on Design Build Operate and Maintain (DBOM) Model. This order is also expected to be constructed in 3 3-year timeframe. RVNL also has a 10-year contract of maintenance @ 5.5% per annum of capex for 1st 5 years & @ 6.5% per annum of capex for the next 5 years.
In two days span, RVNL has bagged up to Rs 13,235.56 crore worth order from BSNL.
Should You BUY RVNL?
Riyank Arora, Technical Analyst at Mehta Equities, RVNL believes RVNL stock to remain range-bound. He suggested that once RVNL breaks above 420, the stock could go up to Rs 450 and Rs 460.
However, as per Trendlyne data, the consensus recommendation from 2 analysts for Rail Vikas Nigam Ltd. is SELL. EPS is expected to reduce by 2.0% in FY25.
So far, RVNL has delivered zero bonus and stock splits but holds a healthy record of dividend payouts. Since September 2019, the company distributed up to 9 dividends, as per Trendlyne data. In the past 12 months, RVNL paid about Rs 2.11 dividend per share. Its current dividend yield is about 0.51%.
About Rail Vikas Nigam Limited:
RVNL has an illustrious legacy spanning over more than two decades. RVNL's journey began with the mission to bridge the infrastructure gap within Indian Railways by implementing projects focused on creating and enhancing rail infrastructure capacity swiftly, as well as securing extra-budgetary resources for Special Purpose Vehicle (SPV) projects.
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