RVNL bags a massive 256 crore order and becomes a hot stock at CMP Rs.130

RVNL share: A stock that has given 365% returns in 2 years and received an order of Rs 256 crore

Rail Vikas Nigam Limited (RVNL) is a company that operates in the engineering and construction sector of the stock market. It is mainly involved in various railway infrastructure projects, such as metro projects, rail bridges, line development, railway electrification, and cable connections. The company was established on 24 January 2003 by the former Prime Minister of India Atal Bihari Vajpayee to strengthen and expand the Indian Railways.

RVNL share has been one of the best performers in the stock market in the last two years, giving its investors a whopping 365% return. The company has also been receiving consistent orders from different state governments for its projects. Recently, the company received an order of Rs 256 crore from the Government of Maharashtra for five projects under Maharashtra Metro Rail Corporation Limited.

In this blog post, we will look at the financial performance, growth prospects and valuation of RVNL shares and why it can be a good investment option for long-term investors.

Financial performance of RVNL share

RVNL share has shown impressive financial performance in the last few years. The company has a market cap of Rs 26,792.51 crore and a free cash flow of Rs 6,785.45 crore. The company has a low debt of Rs 6,615.56 crore and a high promoter holding of 78.2%. The company also pays a decent dividend yield of 1.66%.

The company has also shown strong sales growth and profit growth in the last few years. The sales growth of the company was 25.83% and the profit growth was 15.59%. The company has a healthy return on equity (ROE) of 14.8% and a return on capital employed (ROCE) of 15.5%.

The company has also maintained a high operating margin of 18.7% and a net profit margin of 11%. The company has a low debt-to-equity ratio of 0.25 and a high interest coverage ratio of 9.6.

Growth prospects of RVNL share

RVNL share has a bright future ahead as the company is involved in several important railway projects across the country. The company has an order book of Rs 77,504 crore as of March 2021, which gives it a revenue visibility for the next four to five years.

The company has also been receiving new orders from different state governments for its metro projects, rail bridges and railway electrification projects. Recently, the company received two orders worth Rs 150 crore from the Madhya Pradesh government. And now, the company has received an order of Rs 256 crore from the Government of Maharashtra for five projects under Maharashtra Metro Rail Corporation Limited.

The company is also expected to benefit from the government’s focus on improving the railway infrastructure in the country. The government has allocated Rs 1.1 lakh crore for railway infrastructure development in the Union Budget 2021-22. The government has also announced several initiatives such as dedicated freight corridors, high-speed rail corridors, bullet trains and metro rail projects to boost the railway sector.

Valuation of RVNL share

RVNL share is currently trading at Rs 130 per share as of August 31, 2023. The share price has increased by more than four times in the last two years, from Rs 28 per share in August 2021. The share price has also outperformed the Nifty Infrastructure index, which has given 167% returns in the same period.

The current valuation of RVNL share is also attractive compared to its peers in the engineering and construction sector. The company has a price-to-earnings (PE) ratio of 10.8, which is lower than the industry average PE ratio of 21.9. The company also has a price-to-book (PB) ratio of 1.4, which is lower than the industry average PB ratio of 2.7.

The company also has a low enterprise value-to-EBITDA (EV/EBITDA) ratio of 5.8, which is lower than the industry average EV/EBITDA ratio of 12. The company also has a high earnings yield of 9.2%, which is higher than the industry average earnings yield of 4.6%.

Conclusion

RVNL share is a stock that has given stellar returns to its investors in the last two years and received an order of Rs 256 crore from the Government of Maharashtra recently. The company has shown strong financial performance, growth prospects and valuation. The company is also expected to benefit from the government’s focus on improving the railway infrastructure in the country.

RVNL share can be a good investment option for long-term investors who are looking for a stock that has consistent growth, low debt, high dividend yield and attractive valuation. However, investors should also be aware of the risks involved in investing in the stock market, such as market volatility, competition, regulatory changes and project delays. Investors should also do their own research and analysis before investing in any stock.