Rail Vikas Nigam (RVNL) shares have produced outstanding returns in a four-day run-up. However, as the market plummeted dramatically after making significant initial gains and turned negative on Wednesday, some investors booked some profits on their RVNL shares. Amid the significant trading activity in the opening session, RVNL reached fresh 52-week highs. However, after a short period, the stock saw intense selling pressure.
After Union Minister Raosaheb Danve says that there are efforts to begin the Vande Bharat train production by August, RVNL, a company that engages in railway projects such as setting up new lines, doubling, gauge conversion, railway electrification, metro projects, major bridges, workshops, construction of bridges and institution buildings.
Most RVNL’s work is turnkey. The company handles the project development lifecycle from conceptualization to completion, including the design phases, estimate preparation, contract calling and award, project and contract administration, etc.
The asset-light business strategy that RVNL employs helps to keep its fixed asset portion low, its balance sheet stress-free, and its inventory days low. The Ministry of Railways (MoR) employs RVNL to carry out projects. With a high order book visibility, RVNL is projected to be instrumental in the growth of India’s railway network.
On the strength of a healthy order book and fresh order inflows, the management anticipates revenue to increase at a CAGR of more than 20% over the next few years.
The 200 lightweight Vande Bharat trains are going to manufacture and maintained by a joint venture between RVNL and the Russian company Transmashholding (TMH), which won the lowest bidder award last month. According to the consortium’s offer, a train set costs 120 crores to produce, roughly Rs 58,000 crore.
Share Price History
Before the profit booking reduced their gains, shares of RVNL had increased by roughly 55% during the previous five trading days. Moreover, the stock price has increased by 75% over the past month and 180% over the past six months. Within the past year, the stock has increased by roughly 200 percent.
Rail Vikas Nigam is a project execution organization established in 2003 by the Indian Ministry of Railways. By conducting rail projects and obtaining extra-budgetary resources for Indian Railway project execution, RVNL is mobilizing financial resources, developing rail projects, improving the golden quadrilateral, and port connectivity.
What Are Investors To Do?
The stock of RVNL is rising quickly, as seen by its all-time high price. Vidnyan Sawant, AVP – Technical Research at GEPL Capital, added that higher timeframe charts show a breakout with growing volumes, indicating that there has been a large long build-up behind the present levels.
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