RVNL Q1 Results: Profit Falls 34%, Stock Drops 5%

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RVNL Q1 Results: Profit Falls 34%, Stock Drops 5%

Revenue for the quarter stood at ₹4,074 crore, which is a decline of 27% from the ₹5,571.6 crore it reported during the year-ago quarter.

August 8th, 2024 News

Rail Vikas Nigam Ltd. (RVNL) recently announced its first-quarter results, leading to a significant market reaction. The stock witnessed a sharp decline of over 5% on Thursday, following the release of its financial performance for the June quarter.

Key Financial Highlights:

Net Profit: RVNL reported a net profit of ₹224 crore, marking a 34% decline from the previous year.
Revenue: The company's revenue stood at ₹4,074 crore, a drop of 27% from ₹5,571.6 crore in the same quarter last year.
EBITDA: Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) saw a substantial decrease, falling 48% to ₹182 crore.
EBITDA Margin: The EBITDA margin narrowed by 180 basis points to 4.5%, down from 6.3% last year.

Stock Performance:

Current Trading: Post-results, RVNL shares are trading 5% lower at ₹538.85.
Recent Trends: The stock has declined 10% in August, its first monthly drop after five consecutive months of gains.
Past Performance: RVNL shares surged 44% in July, 9% in June, 33% in May, and 13% in April. The stock has nearly tripled in value this year, reaching a record high of ₹647 on July 15 before correcting to ₹542.

Valuation and Shareholding:

Valuation: Following the recent correction, RVNL shares are trading at a one-year forward price-to-earnings multiple of 61.56 times, significantly higher than the five-year average of 22.1 times.
Mutual Funds: Domestic mutual funds have slightly increased their stake in RVNL to 0.19%, up from 0.09% at the end of March.
Small Shareholders: The number of small shareholders, those with an authorized share capital of less than ₹2 lakh, has risen to 20.5 lakh from 18.2 lakh at the end of March.

Historical Performance:

IPO and Returns: RVNL was listed in late 2019 at an IPO price of ₹19 per share. The stock has delivered positive annual returns every year since listing. In 2024, RVNL has already seen a remarkable increase of nearly 220%, surpassing its 166% surge in 2023.

Despite the recent downturn, RVNL has demonstrated robust growth and resilience in the stock market, maintaining a significant upward trajectory over the past year.

Conclusion:

RVNL's Q1 results indicate a challenging quarter with declines in profit and revenue, yet the company's stock performance over the past year showcases its potential for long-term growth. Investors and market watchers will closely monitor RVNL's strategies and financial health in the coming quarters.