RVNL: Robust Orders Drive Future Growth And Stable Margins

Ashwin Thakker

— 2 min read

Key Facts on Outlook:

  • Revenue Outlook: The company expects to exceed last year's total revenue and projects an approximate 10% growth for Financial Year '25.
  • Sales Outlook: A strong order book of Rs. 1,01,000 crores provides significant revenue visibility. RVNL aims to bid for Rs. 30,000-Rs. 35,000 crores worth of new projects in the next financial year.
  • Margin Outlook: While Q1 experienced a slight margin dip, management anticipates improvement as project execution scales up and claims are settled. Joint Ventures (JVs) are also projected to contribute increasing dividends.

Rail Vikas Nigam Limited (RVNL) recently held its Q1 FY '26 earnings call, revealing a robust order book of Rs. 1,01,000 crores that strongly underpins its forward-looking guidance. Despite a muted first quarter, the company expresses confidence in surpassing last year's total revenue, signaling a period of sustained growth ahead.

Driving Future Revenue with a Strong Order Pipeline

RVNL's management outlined a substantial order book, emphasizing its depth and diversity. The total order book has reached an impressive Rs. 1,01,000 crores. This backlog is primarily driven by railway highway projects and significant electrical contracts. The company is actively pursuing new opportunities, with plans to bid for Rs. 30,000-Rs. 35,000 crores in additional projects next year, including international ventures. Management clearly stated,

'Revenue-wise, absolutely no issue. We will be exceeding the last year's revenue.'

This confidence suggests that the initial quarter's softness is viewed as temporary, with a strong rebound expected to ensure overall yearly growth.

Strategic Initiatives and Margin Recovery on Horizon

While Q1 margins experienced a slight dip, attributed partly to higher bid competition and initial project phases, RVNL anticipates a recovery. The company expects margins to improve as ongoing projects mature and claims are finalized.

'Most of the projects, we have just started executing the work... margins will improve once the work will start in full swing and change of scope.'

A key strategic focus is the Vande Bharat train project, with the first prototype rolling out by June. RVNL also highlighted new Memoranda of Understanding (MoUs), including ventures in the nuclear sector and international solar projects, diversifying its future revenue streams and underpinning long-term growth.

In summary, RVNL's earnings call conveyed a clear message of forward momentum. The company is poised for growth, supported by a substantial order book and strategic diversification into new high-potential areas. Despite initial quarter challenges, the outlook for revenue growth and margin improvement remains positive, positioning RVNL for continued performance in the infrastructure sector.

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