RVNL shares decline 2% despite securing Rs 111 crore project from Southern Railway

Rail Vikas Nigam Ltd (RVNL) shares fell 2.12% to Rs 461.45 on the BSE on Friday, despite the company receiving a Letter of Acceptance from Southern Railway for a Rs 110.86 crore project in the Chennai Division.

The contract involves the provision of Multi-Section Digital Axle Counter systems integrated with the existing Digital Computerised Train Control at stations to enhance dual detection for safety. Additionally, RVNL will replace the remaining Automatic Feedback Track Circuits in the Madurai–Gudur and Madurai–Tirunelveli–Bangalore automatic block signaling sections.


This contract will upgrade the signaling infrastructure in Southern Railway's Chennai Division, which is also expected to enhance operational efficiency and safety. The project is set to be completed within 18 months, in line with general contract conditions.

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Earlier this month, on December 3, the company also announced that it has received a Letter of Acceptance from East Central Railway for another order worth Rs 186.76 crore.

According to its exchange filing, the contract entails the design, supply, erection, testing and commissioning of traction substations with associated switching posts for the upgradation work of the electric traction system from 1X25 to 2X25 KV AT feeding system in the Gomoh-Patratu section of Dhanbad Division of East Central Railway.

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.

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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.

On Thursday, RVNL shares closed at Rs 471.4, down 0.6% on the BSE, while the benchmark Sensex declined 0.29%. The stock has gained 158% so far in 2024 and 566% over the past two years, with the company’s market capitalization now at Rs 98,298 crore.

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