RVNL Fundamental Analysis: Rail Vikas Nigam Limited (RVNL) has been a significant player in the development of rail infrastructure in India. From implementing rail projects to electrification and bridge construction, RVNL operates on a turnkey basis, handling everything from project conception to commissioning. Let’s examine RVNL’s fundamentals, ownership structure, inherent value, and prospects in more detail.

Understanding RVNL Fundamental Analysis: A Brief Overview

RVNL, a government-owned entity, was listed on the Bombay Stock Exchange (BSE) in 2019. Since then, it has shown impressive returns, driven by government infrastructure policies and plans. The company’s clients include various central and state government ministries, departments, and public sector undertakings.

Key Financial Metrics and Future of RVNL Share

Here are some crucial financial metrics for RVNL fundamental analysis:

• Market Cap ₹1,31,356 Cr
• ROE 18.00%
• P/E Ratio 83.44
• EPS 7.55
• P/B Ratio 15.02
• Dividend Yield 0.33%
• Industry P/E 38.57
• Book Value 41.95
• Debt to Equity 0.69
• Face Value 10

Share Holding Pattern:  As of July  2024

• Promoters 72.84% 
• Retail And Others 18.66% 
• Other Domestic Institutions 6.09% 
• Foreign Institutions 2.32% 
• Mutual Funds 0.09%

Technical Analysis and Trading Insights

• Recent Performance:
  • RVNL shares has increased 30x from their IPO price, hitting a new high of ₹647.00 on july 15th.
  • The stock has rallied 250% this year and 425% over the last 12 months.
• Analyst Recommendations:
  • Analysts suggest setting a target range of ₹700-750 and booking profits when this range is achieved. A stop loss at ₹575 is advised to manage downside risk.

RVNL Fundamental Analysis: Income Statement, Balance Sheet, and Cash Flow Analysis 

RVNL Fundamental Analysis: Income Statement

• Revenue Growth: Steady increase in annual revenue from ₹15,403.76 Cr in 2021 to ₹21,889.23 Cr projected in 2024.
• Net Income: Consistent growth in net income, with ₹1,574.30 Cr in 2024 compared to ₹991.57 Cr in 2021.

Quarterly Data: RVNL Fundamental Analysis: Income Statement

Fiscal Period	Mar 24	Dec 23	Sep 23	Jun 23
Revenue	6,714.01	4,689.33	4,914.32	5,571.57
Total Revenue	6,714.01	4,689.33	4,914.32	5,571.57
Cost of Revenue	6,162.49	4,339.96	4,542.81	5,136.60
Gross Profit	551.52	349.37	371.51	434.97
SG&A Expenses	45.47	50.81	46.05	46.58
Depreciation/Amortization	4.39	4.83	6.22	5.50
Other Operating Expenses	49.71	49.46	27.17	39.29
Total Operating Expenses	6,262.06	4,445.06	4,622.25	5,227.97
Operating Income	451.95	244.27	292.07	343.60
Interest Expense	-1,073.00	-1,093.60	-1,084.80	-1,384.10
Other Net	280.31	327.64	296.02	281.61
Net Income Before Taxes	624.96	462.55	479.61	486.80
Provision for Income Taxes	146.56	103.98	85.19	143.71
Net Income After Taxes	478.40	358.57	394.42	343.09
Diluted EPS	2.29	1.72	1.89	1.65

Annual Data: RVNL Fundamental Analysis: Income Statement

Fiscal Period	2024	2023	2022	2021
Revenue	21,889.23	20,281.57	19,381.71	15,403.76
Total Revenue	21,889.23	20,281.57	19,381.71	15,403.76
Cost of Revenue	20,181.86	18,720.07	17,905.85	14,231.87
Gross Profit	1,707.37	1,561.50	1,475.86	1,171.89
SG&A Expenses	188.91	190.98	265.66	218.39
Depreciation/Amortization	20.94	22.32	20.91	22.92
Other Operating Expenses	165.63	124.10	27.10	73.64
Total Operating Expenses	20,557.34	19,057.47	18,219.52	14,546.82
Operating Income	1,331.89	1,224.10	1,162.19	856.94
Interest Expense	-4,635.50	-5,012.60	-2,690.00	-1,669.60
Other Net	1,185.57	996.44	536.43	516.73
Net Income Before Taxes	2,053.91	1,719.28	1,429.62	1,206.71
Provision for Income Taxes	479.44	377.53	319.48	215.14
Net Income After Taxes	1,574.47	1,341.75	1,110.14	991.57
Diluted EPS	7.55	6.44	5.32	4.76

RVNL Fundamental Analysis: Balance Sheet

Quarterly Data: RVNL Fundamental Analysis: Balance Sheet

Fiscal Period	Mar 24	Dec 23	Sep 23	Jun 23
Cash Equivalents	3,112.64	–	4,503.40	–
Short Term Investments	1,960.92	–	1,686.59	–
Cash and Short Term Investments	5,073.56	–	6,189.99	–
Accounts Receivable (Trade Net)	1,077.38	–	1,136.87	–
Total Receivables Net	1,553.53	–	1,613.01	–
Total Inventory	64.72	–	104.26	–
Other Current Assets Total	3,053.98	–	3,521.13	–
Total Current Assets	9,745.79	–	11,428.39	–
Property/Plant/Equipment Total (Net)	451.53	–	327.14	–
Intangibles Net	8.86	–	11.80	–
Long Term Investments	4,415.76	–	4,236.61	–
Note Receivable (Long Term)	4,496.43	–	4,497.44	–
Other Long Term Assets Total	493.62	–	430.75	–
Total Assets	19,611.99	–	20,932.13	–
Accounts Payable	250.00	–	145.97	–
Current Portion of LT Debt/Capital Leases	488.90	–	492.73	–
Other Current Liabilities Total	3,840.42	–	6,286.37	–
Total Current Liabilities	4,579.32	–	6,925.07	–
Long Term Debt	5,515.77	–	5,485.02	–
Capital Lease Obligations	27.85	–	2.95	–
Total Long Term Debt	5,543.62	–	5,487.97	–
Total Debt	6,032.52	–	5,980.70	–
Minority Interest	0.17	–	0.35	–
Other Liabilities Total	743.20	–	610.57	–
Total Liabilities	10,866.31	–	13,023.96	–
Common Stock Total	2,085.02	–	2,085.02	–
Retained Earnings (Accumulated Deficit)	6,660.66	–	5,823.15	–
Total Equity	8,745.68	–	7,908.17	–
Total Liabilities & Shareholders’ Equity	19,611.99	–	20,932.13	–
Total Common Shares Outstanding	208.50	–	208.50	–
Tangible Book Value per Share (Common Eq)	41.90	–	37.87	–

Annual Data: RVNL Fundamental Analysis: Balance Sheet

Fiscal Period	2024	2023	2022	2021
Cash Equivalents	3,112.64	1,853.31	4,487.00	92.79
Short Term Investments	1,960.92	2,597.07	0.56	305.76
Cash and Short Term Investments	5,073.56	4,450.38	5,730.54	1,815.04
Accounts Receivable (Trade Net)	1,077.38	969.30	3,204.30	4,002.75
Total Receivables Net	1,553.53	1,362.74	4,841.44	7,908.23
Total Inventory	64.72	58.93	3,055.50	23.49
Other Current Assets Total	3,053.98	3,173.27	1,110.33	237.69
Total Current Assets	9,745.79	9,045.32	14,737.81	9,984.50
Property/Plant/Equipment Total (Net)	451.53	341.29	359.80	319.34
Intangibles Net	8.86	14.73	20.90	26.25
Long Term Investments	4,415.76	3,703.42	1,937.49	1,739.60
Note Receivable (Long Term)	4,496.43	4,969.23	2,791.67	2,005.99
Other Long Term Assets Total	493.62	269.80	217.84	145.45
Total Assets	19,611.99	18,343.79	20,065.51	14,221.13
Accounts Payable	250.00	620.56	223.36	271.73
Current Portion of LT Debt/Capital Leases	488.90	399.60	300.13	247.98
Other Current Liabilities Total	3,840.42	3,422.34	5,968.66	1,962.07
Total Current Liabilities	4,579.32	4,442.50	7,102.89	2,508.66
Long Term Debt	5,515.77	6,030.59	6,315.43	5,671.51
Capital Lease Obligations	27.85	11.15	27.91	11.20
Total Long Term Debt	5,543.62	6,041.74	6,343.34	5,682.71
Total Debt	6,032.52	6,441.34	6,643.47	5,930.69
Minority Interest	0.17	0.00	–	–
Other Liabilities Total	743.20	613.35	294.59	393.68
Total Liabilities	10,866.31	11,097.59	13,740.82	8,585.05
Common Stock Total	2,085.02	2,085.02	2,085.02	2,085.02
Retained Earnings (Accumulated Deficit)	6,660.66	5,161.18	4,239.67	3,551.06
Total Equity	8,745.68	7,246.20	6,324.69	5,636.08
Total Liabilities & Shareholders’ Equity	19,611.99	18,343.79	20,065.51	14,221.13
Total Common Shares Outstanding	208.50	208.50	208.50	208.50
Tangible Book Value per Share (Common Eq)	41.90	34.68	30.23	26.91

RVNL Fundamental Analysis: Cash Flow

Quarterly Data: RVNL Fundamental Analysis: Cash Flow

Fiscal Period	Mar 24	Dec 23	Sep 23	Jun 23
Net Income/Starting Line	2,053.91	–	966.41	–
Depreciation/Depletion	37.78	–	20.12	–
Non-Cash Items	-714.32	–	-326.19	–
Changes in Working Capital	1,577.06	–	2,995.26	–
Cash from Operating Activities	2,954.43	–	3,655.60	–
Capital Expenditures	-340.43	–	-164.59	–
Other Investing Cash Flow Items Total	-1,058.66	–	-1,377.07	–
Cash from Investing Activities	-1,399.09	–	-1,541.66	–
Financing Cash Flow Items	-441.52	–	-441.45	–
Total Cash Dividends Paid	-443.93	–	-368.90	–
Issuance/Retirement of Debt Net	-401.11	–	-363.69	–
Cash from Financing Activities	-1,286.56	–	-1,174.04	–
Foreign Exchange Effects	-1.40	–	–	–
Net Change in Cash	267.38	–	939.90	–
Cash Interest Paid	441.52	–	441.45	–
Cash Taxes Paid	460.29	–	206.69	–

Annual Data: RVNL Fundamental Analysis: Cash Flow

Fiscal Period	2024	2023	2022	2021
Net Income/Starting Line	2,053.91	1,798.15	1,429.62	1,206.71
Depreciation/Depletion	37.78	42.32	37.07	36.67
Non-Cash Items	-714.32	-33.74	265.51	-344.08
Changes in Working Capital	1,577.06	-5,882.99	3,061.23	-479.88
Cash from Operating Activities	2,954.43	-4,076.26	4,793.43	419.42
Capital Expenditures	-340.43	-61.18	-116.34	-142.93
Other Investing Cash Flow Items Total	-1,058.66	1,416.16	-1,315.15	455.41
Cash from Investing Activities	-1,399.09	1,354.98	-1,431.49	312.48
Financing Cash Flow Items	-441.52	–	-0.01	-4.88
Total Cash Dividends Paid	-443.93	-421.17	-421.17	-475.38
Issuance/Retirement of Debt Net	-401.11	-614.85	231.82	895.95
Cash from Financing Activities	-1,286.56	-1,036.02	-189.36	415.69
Foreign Exchange Effects	-1.40	–	–	–
Net Change in Cash	267.38	-3,757.30	3,172.58	1,147.59
Cash Interest Paid	441.52	–	–	–
Cash Taxes Paid	460.29	388.18	299.32	150.52

RVNL Intrinsic Value and Market Position

Rail Vikas Nigam Ltd (RVNL.NS) has been a prominent player in the Indian rail infrastructure sector. However, its intrinsic value analysis reveals some interesting insights that investors should consider. As of July 13, 2024, the intrinsic value of RVNL is estimated at ₹286.77, calculated using the Discounted Cash Flow (DCF) model with a growth exit of 5 years. This intrinsic value suggests a significant downside compared to the current market price of ₹626.75, indicating an upside of -54.2%.

Intrinsic Value Range: ₹213.51 – ₹435.64

Current Stock Price: ₹626.75

Selected Intrinsic Value: ₹286.77

Valuation Summary

Here is a detailed breakdown of RVNL’s intrinsic value using various models:

Valuation Model	Range (₹)	Selected (₹)	Upside (%)
DCF (Growth Exit 5Y)	213.51 – 435.64	286.77	-54.2%
DCF (Growth Exit 10Y)	296.73 – 593.58	395.54	-36.9%
DCF (EBITDA Exit 5Y)	300.93 – 428.69	356.33	-43.1%
DCF (EBITDA Exit 10Y)	379.52 – 591.66	469.01	-25.2%
Peter Lynch Fair Value	137.91	137.91	-78%
P/E Multiples	241.77 – 377.68	273.88	-56.3%
EV/EBITDA Multiples	112.72 – 159.96	140.63	-77.6%
Earnings Power Value	17.12 – 28.79	22.96	-96.3%
Dividend Discount Model – Stable	42.95 – 109.32	76.13	-87.9%
Dividend Discount Model – Multi Stages	159.99 – 320.93	214.02	-65.9%

Peers Comparison:RVNL Fundamental Analysis

RVNL’s intrinsic value and market position compared to its peers show varied results:

Company	Range (₹)	Selected (₹)	Upside (%)
IRB Infrastructure Developers Ltd	7.42 – 59.12	21.93	-67.9%
NBCC (India) Ltd	98.9 – 135.5	113.32	-40.3%
Ircon International Ltd	193.69 – 294.08	231.43	-31.3%
KEC International Ltd	581.98 – 1,051.71	759.61	-12.8%
NCC Ltd	188.92 – 293.91	229.37	-29.8%
PNC Infratech Ltd	274.99 – 668.41	411.63	-21.3%
Kalpataru Power Transmission Ltd	691.32 – 1,137.96	860.74	35.9%
Hindustan Construction Company Ltd	50.02 – 71.94	58.90	17.2%
Dilip Buildcon Ltd	147.07 – 545.37	293.01	-45.2%
Jaypee Infratech Ltd	-91.98	-91.98	-7765.3%

Key Valuation Metrics: RVNL Fundamental Analysis

• Market Cap: ₹1,306,786 million
• Beta: 1.23
• Outstanding Shares: 2,085 million
• Enterprise Value: ₹1,335,985 million
• Market Risk Premium: 8.8%
• Cost of Equity: 13.25%
• Cost of Debt: 6.3%
• WACC: 12.9%

The intrinsic value analysis suggests that RVNL is currently overvalued based on multiple valuation models. The DCF models indicate a significant downside from the current market price, which raises concerns about the stock’s future performance. Investors should consider these insights and compare them with market conditions, company growth prospects, and peer performance before making investment decisions.

This comprehensive analysis helps investors understand RVNL’s intrinsic value and how it stacks up against its peers in the industry. While the company has shown strong performance in the past, the current valuation metrics suggest caution moving forward.

Target Prices for RVNL Share Price Over the Next Ten Years :

Shares of Rail Vikas Nigam Ltd. (RVNL) surged by 2.5% on July 12, reaching a new record high of ₹645.00, surpassing the previous day’s record of ₹629.80. The stock has climbed nearly 250% this year and has delivered a remarkable 425% return over the past 12 months.

Technical Analyst Rajesh Satpute sees further growth potential for RVNL but notes the current rise is driven by pre-budget expectations. He advises investors to consider booking some profits if the stock reaches the ₹700-750 range to recover their initial investment and secure some profit. Satpute recommends a stop loss at ₹575 to protect against potential downturns.

As of the March 2024 quarter, the government held 72.84% of Rail Vikas Nigam’s shares. The shareholding pattern for the June quarter has not yet been updated. The two most recent analyst recommendations for the railway stock are a “Hold” rating, indicating that there is not much coverage for the stock.

At an IPO price of ₹19, the stock made its debut on the stock market in 2019. At the time of issue, shares have increased by over 30 times. Along the way, the stock’s market capitalization exceeded ₹1 lakh crore, making it only the second railway company to do so after IRFC. RVNL has a market capitalization of ₹1.32 lakh crore as of the current market level.

Predictions for the Next ten years

The target range for RVNL’s future stock price in the next three years is anticipated to be between ₹1,097.67 and ₹1,192.79.

If we were to estimate the price target for the next five years, it might be as low as ₹1,411.52 or as high as ₹1,585.02.

According to projections, the value might rise to ₹1,969.32 at the highest point and, at the very least, ₹1,725.25 over the next seven years.

It could increase to a minimum of ₹2,196.27 and a maximum of ₹2,546.30 in the next ten years.

RVNL Fundamental Analysis: Conclusion

Since its 2019 initial public offering (IPO), Rail Vikas Nigam Limited (RVNL) has shown remarkable growth, greatly aided by India’s strong policies for infrastructure development. The company has become a key player in the industry thanks to its all-inclusive approach to rail infrastructure projects, which it manages from conception to commissioning. Due in part to its strategic positioning, RVNL has demonstrated impressive financial performance by leveraging multiple government contracts.

RVNL shares have increased by 250% in 2024 alone, and the stock has returned an astounding 425% in the last 12 months. Due to its outstanding performance, its market capitalization has surpassed ₹1 lakh crore, making it a prominent player in the railway industry. Nevertheless, analysts have issued a warning despite these gains. Based on estimates of a substantial decline from the stock’s current market price, the intrinsic value analysis suggests that the stock may be overvalued at the moment.

To protect against future volatility and recoup their initial investment, investors should think about booking profits if the stock hits the ₹700–750 range, according to technical analyst Rajesh Satpute. In order to reduce downside risk, he also suggests a stop loss at ₹575.

As of July 2024, the government accounted for 72.84% of the total shareholding pattern. Retail investors, domestic institutions, and foreign institutions held the remaining shares. Strong state support is indicated by this structure, which is a sign of stability.

Looking ahead, RVNL’s projected future prices, which range from ₹1,097.67 to ₹2,546.30, indicate significant appreciation over the following ten years. Despite the large upside potential these targets offer, the current high valuation calls for caution. The risks indicated by the intrinsic value analysis and the state of the market should be weighed against the possibility of further growth by investors.

FAQs

1. Describe RVNL and its functions.

India’s state-owned Rail Vikas Nigam Limited (RVNL) is in charge of building the country’s rail network. It manages turnkey projects, including electrification and bridge construction, and covers all project phases from inception to commissioning.

2. What was the date of RVNL’s stock exchange listing?

In 2019, RVNL became a listed company on the Bombay Stock Exchange (BSE).

3. What is the recent performance of RVNL’s stock?

With a new high of ₹645.00, RVNL shares have increased by 250% in 2024 alone and have returned 425% over the last 12 months.

4. What is RVNL’s market capitalization at the moment?

RVNL is currently valued at ₹1.32 lakh crore on the market.

5. Who are RVNL’s principal shareholders?

The government owns 72.84% of RVNL as of July 2024. Retail investors, domestic institutions, and foreign institutions own the remaining shares.

6. What do analysts think about RVNL’s chances going forward?

Because of its high current valuation, analysts advise caution even though they believe RVNL has further growth potential. Profit targets are between ₹700 and 750, and ₹575 is the suggested stop loss.

7. What are the anticipated future prices for the shares of RVNL?

Over the next ten years, the price targets for RVNL shares vary from ₹1,097.67 to ₹2,546.30.

8. Is RVNL too expensive?

Based on an intrinsic value analysis, it appears that RVNL might be overpriced, as estimates suggest a substantial decline from the current market price.

9. Which financial indicators best describe RVNL’s performance?

Market capitalization of ₹1,31,356 Cr, ROE of 18.00%, P/E ratio of 83.44, EPS of 7.55, and dividend yield of 0.33% are some of the important financial indicators.

10. Before making an RVNL investment, what should investors think about?

The potential for future growth, the high current valuation, and analyst suggestions for stop loss and profit booking techniques should all be taken into account by investors.

Disclaimer: The information in this “Stock Profile” blog post is for informational purposes only. It is not financial advice. Always consult a qualified expert before making investment decisions.