RVNL shares in focus after securing Rs 3,622 crore contract from BSNL for BharatNet Middle Mile Network Development

State-owned Rail Vikas Nigam Ltd (RVNL) shares will be in focus on Thursday, 16 January, following the company's announcement of receiving a Letter of Acceptance from Bharat Sanchar Nigam Ltd (BSNL) for the development, upgradation, and maintenance of the middle-mile network of BharatNet.

"A Letter of Acceptance has been received from Bharat Sanchar Nigam Limited (BSNL) for the Development (Creation, Upgradation, and Operation & Maintenance) of the Middle-mile network of BharatNet on the Design-Build-Operate-Maintain (DBOM) Model," the company said in an exchange filing.

The project will follow a Design-Build-Operate-Maintain (DBOM) model and will be executed in partnership with consortium members HFCL and ATS, with RVNL serving as the lead member.


The total contract value stands at Rs 3,622.14 crore, including operational expenses for a 10-year maintenance period. The project will involve a three-year construction phase, followed by a maintenance period split into two five-year intervals.

During the maintenance phase, payments will be made at 5.5% of capital expenditure for the first five years and 6.5% for the next five years. This project is part of RVNL's regular business activities.

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RVNL Q2 FY25 Earnings

In Q2 FY25, RVNL reported a 27% year-on-year (YoY) drop in net profit to Rs 286.9 crore, down from Rs 394.3 crore in the corresponding period last year, impacted by lower operating margins and reduced earnings.

The company's revenue from operations dipped 1.2% YoY to Rs 4,855 crore, compared to Rs 4,914.3 crore in Q2 FY24. EBITDA fell 9% to Rs 271.5 crore, with margins shrinking to 5.6% from 6% in the previous year, highlighting increased operational pressures.

RVNL Shares Target Price

As per Trendlyne data, the average target price of the stock is Rs 357, which indicates a downside of 4% from the current market price. The consensus recommendation from two analysts for the stock is a 'Sell'.

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RVNL Shares Performance

On Wednesday, RVNL shares closed at Rs 371.9, down 1.3% on the BSE, while the benchmark Sensex surged 0.29%. The stock has declined 41% over the past six months but gained 367% in the last two years. The company’s market capitalization stands at Rs 77,541 crore.

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