Rail Vikas Nigam Limited (RVNL) is a Central Public Sector Enterprise (CPSE) of the Government of India’s Ministry of Railways. It was established in 2003 with the dual goals of raising extra-budgetary resources and expediting the realization of projects linked to the establishment and expansion of rail infrastructure capacity. RVNL is authorized to function as an Umbrella SPV to direct project development, resource mobilization, and other activities, or to create project-specific SPVs or any other financing structure deemed appropriate.
What does RVNL do?
The Ministry of Railways’ construction arm, RVNL, is responsible for developing transportation infrastructure and implementing projects. As per the concession agreement with the Ministry of Railways, it is responsible for executing the Ministry’s rail infrastructure projects, including doubling, gauge conversion, new lines, electrification of the railway, major bridges, workshops, production units, and freight revenue sharing with Railways.
Fundamental view
Fundamental analysis examines both macroeconomic and microeconomic factors, such as industry conditions and corporate management performance, to determine whether other investors are undervaluing or overvaluing a security.
Some Key Financial Ratios for RVNL
• Price to Earning: 10.07
• Price to Book: 1.74
• Price to Sales: 0.627
• Earning Per Share: 6.81
• Return On Equity: 17.23%
• Return On Asset: 6.85%
• Net Profit Margin: 6.22%
• Operating Profit Margin: 6.04%
• EBITDA Margin: 11.06%
RVNL has been classified as a Navratna CPSE under the Ministry of Railways . The company’s authorized share capital is INR 3,000.00 crores and the total paid-up capital is INR 2,085.02 crores.
Some of the major projects undertaken by RVNL
• Doubling and electrification of existing lines
• Construction of new lines
• Gauge conversion projects
• Metro railway projects
• Multimodal transport system projects
• Port connectivity projects
• Turnkey projects such as workshops, training institutes, and green buildings
• High-speed rail projects
• Cable-stayed bridges, river and road bridges, vertical lift bridge, mountain railways and tunnels
Technical view
The increasing trend in stock prices that started in March 2020 is still there, according to market data from the past several days. Between July 2021 and August 2022, RVNL’s stock experienced a corrective period. Now is there going to be a correction phase again? After more than a year of rapid growth, prices have now slowed down a bit. The volume is relatively low. According to wave theory, If we regard wave 3 as the price surge, we can predict a complex correction in wave 4.
At the end of this correction, prices may rise again. In this instance, wave 5‘s growth rate may be slower. This is because wave 3 is an extended wave compared to wave 1. According to the Fibonacci ladders, Wave 3 is 461%. In that case, there doesn’t seem to be much of a big race waiting for Wave 5. These factors should be considered before investing in RVNL.
