Abhishek Sinha
Rail Vikas Nigam Limited (RVNL) shares slipped 3% to ₹308 in early trade on Wednesday, following the release of its September quarter (Q2 FY25) results that missed market expectations. Despite a rise in revenue, the company reported a sharp 20% decline in net profit due to higher operational costs.
Profit Declines Despite Revenue Growth
According to the company’s exchange filing, RVNL’s consolidated net profit dropped to ₹230.52 crore in Q2 FY25 from ₹286.90 crore in the same quarter last year. Meanwhile, total income rose marginally to ₹5,333.36 crore, up from ₹5,136.07 crore year-on-year (YoY).
Operating expenses surged to ₹5,015 crore, compared to ₹3,972 crore in the previous quarter and ₹4,731 crore in Q2 FY24. EBITDA slipped to ₹217 crore from ₹256 crore a year ago, with margins contracting by 100 basis points YoY to 4%.
However, on a quarter-on-quarter (QoQ) basis, the company showed improvement — net profit rose by nearly 73%, and revenue grew 31% compared to Q1 FY25.
Multiple Project Wins Support Outlook
RVNL has been actively expanding its project portfolio. Last week, it bagged a ₹272 crore contract from Central Railway for the design, supply, and commissioning of a 220/132/55 kV traction substation system between Daund and Solapur. The project aims to support a 3,000 MT freight target under EPC mode.
This new order marks RVNL’s fourth major project in under two months. In October, the firm secured three additional contracts, including a ₹165.5 crore infrastructure project from North Eastern Railway.
Stock Performance: 40% Below 1-Year High
RVNL’s stock has been under consistent pressure since hitting its all-time high of ₹647 earlier this year. After a brief recovery in September, the shares resumed their downward trend in October and have fallen another 4% so far in November.
At present, the stock trades 40% below its 52-week high and is down over 25% year-to-date, putting it on track for its first annual decline since its listing in 2019.
Outlook
Analysts remain cautious on RVNL’s near-term performance, citing elevated costs and margin pressures despite steady order inflows. However, the company’s strong order book and consistent project execution continue to support its long-term growth prospects.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should consult certified financial advisors before making investment decisions.
