Shares of Rail Vikas Nigam Ltd (RVNL) slumped 2% on 25 July despite the company announcing securing a Letter of Acceptance (LoA) for a project worth Rs 191.53 crore from South Eastern Railway.

In its regulatory filing, the company said that the LoA is for “Design, Supply, Erection, Testing & Commissioning of 132 KV Traction Substation, Sectioning post (SPs), and Sub sectioning post (SSPs) in 2x25KV System on Rajkhaswan- Nayagarh-Bolani section of Chakradharpur division of South Eastern Railway to meet 3000MT loading target on EPC mode.”

It is noteworthy that due to the lack of attention given to the industry, RVNL was one of the multi-bagger railway companies that had a significant drop after the Union Budget 2024.

The stock prices of RVNL, Ircon International, IRFC, RailTel, and other companies fell precipitously following Finance Minister Nirmala Sitharaman’s budget speech, which barely mentioned the railway industry, despite investors’ expectations of robust support for railroads.

Due to securing sizable infrastructure orders from the government, its profit after tax increased from Rs 790 crore in FY19 to over Rs 1,640 crore in FY24. This indicates a significant increase in its profitability. The business has also kept drawing in more infrastructure agreements from India and other nations.

RVNL possesses an order book valued at approximately Rs 65,000 crore. Additionally, the company aims to receive Rs 25,000 crore in orders annually. 

At 1:34 pm, the shares of Rail Vikas Nigam were trading 2.02% lower at Rs 581.75 on NSE.

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