Shares of state-owned Rail Vikas Nigam Limited (RVNL) fell as much 7 percent after the company reported disappointing results for the quarter ended September 30, 2024.
RVNL’s net profit dropped 27 percent on-year, falling to Rs 287 crore in Q2FY25. Meanwhile, the company’s revenue registered a marginal decline, reaching Rs 4,855 crore. Analysts anticipated a decline in revenue and profit due to lower project executions and slower growth in the company's core segments.
On the operational front, RVNL’s earnings before interest, tax, depreciation, and amortisation (EBITDA) decreased by 9 percent YoY to Rs 271.5 crore, down from Rs 298.2 crore in Q2FY24.
This resulted in an EBITDA margin contraction of 40 basis points, reducing it from 6 percent in the September quarter of FY24 to 5.6 percent in Q2FY25.
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Rail Vikas Nigam is a Navratna PSU dedicated to the development and construction of railway infrastructure across India.
The company has extensive involvement in a variety of railway projects, including new line construction, track doubling, gauge conversion, electrification, workshops, metro projects, and the construction of bridges, including cable-stayed structures and institutional buildings.
Additionally, RVNL provides financial resource mobilisation services to support its projects. The company’s clientele includes Indian Railways, along with central and state government ministries, departments, and public sector undertakings.
As of 10:14 am, RVNL shares were trading 5 percent lower at Rs 453.20 on the National Stock Exchange (NSE). The stock has rallied approximately 150 percent this year, significantly outpacing Nifty's 10% gain.
Over the past 12 months, the stock has soared 180%, nearly tripling investors' capital, while Nifty rose 23% during the same period
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