This railway construction company delivered over 201% returns in a year; do you hold it?

 An investment of Rs 1 lakh in the shares of this company 1 year ago would have turned to Rs 3.01 lakh today. 

Rail Vikas Nigam Ltd, an S&P BSE SmallCap company, has delivered multibagger returns to its shareholders in the last one year. During this period, the company’s share price jumped from Rs 34.75 on 26th April 2022 to Rs 104.79 on 25th April 2023, an increase of 201% in the one-year holding period.  

Recent performance highlights

In the recent quarter Q3FY23, on a consolidated basis, the company’s net profit increased by 20.05% YoY to Rs 338.51 crore. The company’s net sales decreased by 0.74% YoY to Rs 5,012.09 from Rs 5,049.24 crore. 

The company is currently trading at a PE of 14.7X against the industry PE of 35.6X. In FY23, the company delivered an ROE and ROCE of 19.7% and 16.8%, respectively. The company is a constituent of Group A stocks and commands a market capitalization of Rs 21,517.41 crore. 

Company Profile 

Rail Vikas Nigam Ltd (RVNL) was incorporated as a 100% owned PSU of the Ministry of Railways (MoR) on January 01, 2003, with the twin objectives of raising extra-budgetary resources and implementing projects related to the creation and augmentation of the capacity of rail infrastructure on fast track basis. By March 2005, RVNL became fully functional and is empowered to act as an Umbrella SPV (Special Purpose Vehicles) to undertake project development, resource mobilization etc. 

Growth Drivers 

Rail Vikas Nigam is a company that specializes in executing railway projects, such as new lines, doubling, gauge conversion, electrification, metro projects, workshops, major bridges, construction of cable-stayed bridges, and institutional buildings. It works on a turnkey basis and undertakes the full cycle of project development from conceptualization to commissioning, including stages of design, estimates, calling and award of contracts, project and contract management, etc. 

Share price movements 

Today, the share of Rail Vikas Nigam Ltd opened at Rs 108 and has touched a high and low of Rs 114.62 and Rs 100.28, respectively. So far 1,12,38,982 shares have been traded on the bourses.  

At the time of writing, the shares of Rail Vikas Nigam Ltd were trading at Rs 102.95, a decrease of 1.76% from the previous day’s closing price of Rs 104.79 on BSE. The stock has a 52-week high and low of Rs 114.62 and Rs 29 respectively on BSE.