1. At a Glance
Government-backed infra machine that builds railways, wins contracts faster than a Shatabdi, and now trades at a steamy 62x earnings. RVNL is the railway minister’s favorite child—but is the track ahead still clear?
2. Introduction with Hook
Imagine an Indian Railways babu on steroids. That’s RVNL.
- Market Cap: ₹79,877 Cr
- P/E: 62.3 (Yes, a PSU with startup-level valuation)
- Dividend Payout: 28% and growing
- FY25 Profit: ₹1,282 Cr (but down from FY24)
All aboard the volatility express?
3. Business Model (WTF Do They Even Do?)
RVNL is a project-executing arm of the Ministry of Railways (MoR). It does:
- Doubling, gauge conversion, new lines
- Bridges, workshops, electrification
- Now entering metro, highways, and export infra
Key income:
- EPC contracts (Engineering, Procurement, Construction)
- PMC Fees (Project Mgmt Consulting)
- Freight revenue share (under concession agreement)
4. Financials Overview
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 20,282 | 21,889 | 19,923 |
| Net Profit (₹ Cr) | 1,342 | 1,574 | 1,282 |
| EPS (₹) | 6.44 | 7.55 | 6.15 |
| OPM % | 6% | 6% | 6% |
| Dividend Payout % | 33% | 28% | 28% |
Revenue fell in FY25, along with profits. But hey—PSU dividend still chugs along.
5. Valuation
- P/E = 62.3 ← smells like optimism on electrified rails
- Price/Book = 8.35 ← Rich for a PSU
- Fair Value Range = ₹285 – ₹340 (based on 25–30x normalized earnings)
Valuation assumes order book stability and no derailment in execution.
6. What’s Cooking – News, Triggers, Drama
🔥 Major wins:
- ₹447 Cr Delhi Metro project (Jul 2025)
- South Central Railway OHE upgradation
- Southern Railway electric traction upgrade
📉 But:
- Revenue dipped in FY25
- Promoter holding dropped from 78% to 72.84%
- Stock down 39% in past year = reality check?
7. Balance Sheet
| Item | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity Capital | 2,085 Cr | 2,085 Cr | 2,085 Cr |
| Reserves | 5,161 Cr | 6,661 Cr | 7,486 Cr |
| Borrowings | 6,441 Cr | 6,033 Cr | 5,419 Cr |
| Total Assets | 18,344 Cr | 19,612 Cr | 20,482 Cr |
Solid reserves build-up, debt declining. Track looks steady from here.
8. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net CF (₹ Cr) |
|---|---|---|---|---|
| FY23 | -4,064 | 1,355 | -1,048 | -3,757 |
| FY24 | 2,954 | -1,400 | -1,287 | 267 |
| FY25 | 1,878 | 1,629 | -1,484 | 2,023 |
🤑 Healthy ops cash in FY25, investing back with discipline.
🎯 Financing outflows = dividend + debt reduction
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE | 17% | 18% | 15% |
| ROE | 18% | 18% | 14% |
| Debtor Days | 17 | 18 | 27 |
📉 ROE and ROCE dipped a bit
⚠️ Debtor days rising = payment delays from Railways?
10. P&L Breakdown – Show Me the Money
| Year | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM (%) |
|---|---|---|---|
| FY23 | 20,282 | 1,342 | 6% |
| FY24 | 21,889 | 1,574 | 6% |
| FY25 | 19,923 | 1,282 | 6% |
🔁 Same margin. But FY25 = degrowth. Bumpy ride?
11. Peer Comparison
| Company | P/E | ROCE (%) | Net Profit (₹ Cr) | Market Cap (₹ Cr) |
|---|---|---|---|---|
| L&T | 31.6 | 14.5 | 15,225 | 4,80,516 |
| NBCC | 50.9 | 33.4 | 610 | 31,045 |
| KEC Intl. | 41.0 | 16.0 | 571 | 23,419 |
| Kalpataru | 36.9 | 15.9 | 562 | 20,769 |
| RVNL | 62.3 | 14.7 | 1,282 | 79,877 |
🥇 RVNL is priced the highest. Justified? Only if order wins continue.
12. Miscellaneous – Shareholding, Promoters
| Shareholder Type | Mar 2025 |
|---|---|
| Promoters | 72.84% |
| FIIs | 5.07% |
| DIIs | 6.21% |
| Public | 15.87% |
📉 Promoter stake dropped from 78% → 72%
📈 Retail army growing → 23 lakh+ shareholders
13. EduInvesting Verdict™
RVNL is a well-oiled rail-laying machine, with GOI love, a chunky order book, and steady margins. But at 62x P/E, you’re paying bullet train prices for a goods train delivery speed.
Margins are capped. Execution delays exist. And the PSU tag is both a blessing (contracts) and curse (pricing caps).
But if you’re betting on India’s infra boom and Railways 2.0, RVNL might just be the compounding stock your DMat deserves. Just… don’t expect every quarter to be a superfast express.
Metadata
– Written by EduInvesting Research | July 15, 2025
– Tags: Railways, Infra PSU, EPC, Government Contracts, Capex Cycle, Order Book, PSU Stocks, RVNL
