1. At a Glance – PSU Muscle with Private-Sector Anxiety
Rail Vikas Nigam Ltd (RVNL) today looks like that overachieving government topper who has cleared every exam, built half the country’s railway network, yet still gets asked: “But beta, private sector mein kya scene hai?”
Market cap sits at ₹64,938 crore, stock price at ₹311, down ~21% over one year, while three-year returns are still a respectable ~64%. The company posted ₹1,147 crore PAT (TTM) with ROE ~14% and ROCE ~14.7%, but trades at a head-scratching P/E of 56.6x and EV/EBITDA of 35x — PSU ho ke bhi premium lounge mein baitha hai.
Latest Q3 FY26 results show ₹4,684 crore revenue, ₹324 crore PAT, and EPS of ₹1.55 for the quarter. Dividend lovers got a ₹1 interim dividend (₹208.5 crore payout). Order book? A thumping ₹90,000+ crore, split almost evenly between legacy rail projects and competitive bidding wins.
So the obvious question:
Is RVNL a long-term compounding railway engine… or a fully booked train with ticket prices already overpriced?
Let’s dig in, station by station.
2. Introduction – RVNL: Indian Railways’ Execution Arm on Steroids
RVNL was incorporated in 2003, when the Government of India realised that Indian Railways needed a dedicated project execution arm that actually executes instead of filing tenders, extensions, and excuses.
RVNL’s job is simple in theory, brutal in execution:
- Take railway projects assigned by the Ministry of Railways
- Execute them end-to-end
- Hand them back, on time (mostly), and move on
No marketing drama. No product launches. No fancy brand ambassadors. Just concrete, steel, tunnels, bridges, electrification, signalling, and now even solar plants in Saudi Arabia.
Over the years, RVNL has evolved from a pure-play rail EPC contractor into:
- A rail infra integrator
- A metro project executor
- A telecom fibre layer
- A solar EPC partner
- A JV/SPV specialist for ports and mines
Yet, despite all this, revenue growth over the last 3 years is just ~1% CAGR, and profits are
actually down 12% TTM. That’s where the market’s confusion begins.
Is RVNL a growth story? Or a cash-flow-heavy but low-margin PSU utility?
Hold that thought.
3. Business Model – WTF Do They Even Do?
Imagine Indian Railways says:
“Yaar, humein 400 km track doubling, electrification, 3 bridges, 2 tunnels, and signalling upgrade chahiye.”
RVNL replies:
“Ho jayega.”
That’s it. That’s the business model.
Core Segments
RVNL executes projects across:
- Track Doubling & New Lines
- Railway Electrification
- Major Bridges
- Tunnels (including Himalayan geology nightmares)
- Workshops & Production Units
- Metro Rail
- Signalling & Telecom
- Solar EPC (domestic + international)
Revenue Mix (FY25)
- ~99.9% Contract Revenue
- Consultancy is basically chai-paani money
So RVNL is:
- Not asset-heavy like IRB
- Not margin-rich like L&T
- Not capital-light either
Margins are thin (OPM ~4.6%), but volumes are massive.
Question for you:
Would you rather earn 4% margin on ₹20,000 crore… or 15% margin on ₹2,000 crore?
RVNL has clearly chosen option one.
4. Financials Overview – Numbers Don’t Lie, But They Do Raise Eyebrows
EPS annualisation rules apply accordingly.
Quarterly Performance Comparison (₹ crore)
| Metric | Latest Qtr (Q3 FY26) | YoY Qtr (Q3 FY25) | Prev Qtr (Q2 FY26) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 4,684 | 4,567 | 5,123 | 2.6% | -8.6% |
| EBITDA | 221 | 239 | 217 | -7.5% | 1.8% |
| PAT | 324 | 312 | 231 | 3.7% | 40.3% |
| EPS (₹) | 1.55 | 1.49 | 1.10 | 4.0% | 40.9% |
Commentary:
- Revenue is stable, not exciting
- Margins are thin and volatile
- QoQ PAT jump largely due to other income, not core execution
