Rail Vikas Nigam Limited (RVNL) shares faced volatility in early trading after the company announced its Q2 FY25 results, which failed to meet investor expectations. Despite a slump of nearly 8% over the past two sessions, the stock rebounded slightly on Monday, trading up 1.05% at ₹441.15.
Q2 FY25 Financial Performance: A Closer Look
RVNL reported a flat revenue of ₹22,000 crore for FY25, with EBITDA margins expected to remain between 6% and 6.5%.
The company’s profit after tax (PAT) fell short of analyst estimates, coming in 18% below expectations, primarily due to execution delays caused by prolonged monsoon conditions in key regions.
RVNL Q2 FY25 Financial Summary
| Metric | Actual (₹ crore) | Estimate (₹ crore) | Deviation (%) |
|---|---|---|---|
| Revenue | 22,000 | 22,000 | 0% |
| EBITDA Margin | 6.2% | 6.5% | -0.3% |
| Profit After Tax (PAT) | 1,100 | 1,341 | -18% |
Key Developments: New Project Wins Boost Sentiment
Despite the underwhelming Q2 performance, RVNL has secured new contracts, which could drive growth in the second half of the fiscal year. The company was recently declared the lowest bidder for an engineering, procurement, and construction (EPC) project by South Central Railway.
The project involves doubling the railway track between Navipet and Indalvai stations in Telangana, with an estimated value of ₹294.94 crore.
Analyst Recommendation: Hold for Now
IDBI Capital maintained its ‘hold’ rating for RVNL, with a target price of ₹463, reflecting a potential upside of 6% from the current trading price.
The brokerage cited the company’s new project wins and expected improvement in execution in the latter half of FY25 as reasons for optimism. However, they also highlighted risks related to execution delays and fluctuating revenue margins.
Price Action and Investor Outlook
RVNL’s share price has shown resilience despite the mixed Q2 results, rebounding slightly after a steep decline. The stock’s current trading price of ₹441.15 suggests investor caution, but the recent project wins could help stabilize the stock in the coming months.
RVNL Price Action Summary (November 2024)
| Date | Opening Price (₹) | Closing Price (₹) | Change (%) |
|---|---|---|---|
| November 10 | 432.50 | 441.15 | +1.05% |
| November 9 | 450.00 | 432.50 | -3.89% |
| November 8 | 470.00 | 450.00 | -4.26% |
Conclusion
RVNL’s mixed Q2 results have left investors uncertain, but the company’s recent project wins and expected improvement in execution offer hope for a stronger performance in the second half of the fiscal year. Analysts recommend a cautious approach, suggesting investors hold the stock while monitoring upcoming project developments.
Disclaimer: This article is intended for informational purposes only. Please consult with a financial advisor before making any investment decisions.
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