RVNL Share Price Surges to Over Two-Month High Amid Continued Rally

Rail Vikas Nigam Limited (RVNL) has caught the attention of investors once again, as its share price extended gains for the fourth consecutive session on Wednesday, December 24. The stock’s momentum comes even as the broader stock market today showed limited movement, underlining RVNL’s standout performance in the railway sector.

Market Performance

RVNL share price opened the day at ₹344, slightly above Tuesday’s closing level of ₹341.85. Early trading showed strong momentum, pushing the stock to an intraday high of ₹349.40, marking its highest level since early October. Over the past four sessions, the stock has climbed a cumulative 14.2%, signaling renewed investor interest after a prolonged period of pressure.

Despite broader market trends remaining largely sideways, RVNL’s sustained rally highlights the increasing focus on railway infrastructure stocks and their potential resilience in volatile market conditions.

Key Drivers Behind the Rally

Multiple factors are driving the renewed optimism around RVNL shares:

• Passenger Fare Rationalisation: The government recently revised passenger fares to balance rising operational costs while limiting the impact on commuters.
  • Ordinary-class fares for journeys beyond 215 kilometers will see a rise of one paise per kilometer.
  • Mail and Express non-AC categories and all AC classes will see a uniform increase of two paise per kilometer.
• Revenue Impact: The fare hike is expected to generate approximately ₹600 crore in additional revenue for the remainder of the current fiscal year.
• Support for Operational Sustainability: Passenger fares remain around 45% below cost, with freight earnings subsidising operations. The fare rationalisation aims to improve financial sustainability and operating ratios, which are projected at 98.43% for the current fiscal year.

These measures, along with strategic order wins, have strengthened the stock’s appeal and provided a lift to investor confidence.

Company Highlights and Recent Orders

RVNL continues to secure significant projects, further solidifying its growth story:

• Recent Order: Last week, RVNL received a Letter of Award from Northeastern Railway for constructing the substructure of Important Bridge No. 50.
• Project Details: The bridge spans 14 × 61.0 meters over the River Gandak, featuring a double D-type well foundation suitable for double-line traffic with RDSO 25-tonne axle load standards.

Such contracts not only boost RVNL’s project pipeline but also demonstrate the company’s continued role in expanding India’s railway infrastructure.

RVNL Share Price Trend

RVNL has seen significant swings in recent times:

• The stock hit an all-time high of ₹647 in July 2024, but subsequently declined nearly 46%.
• Despite the recent recovery, RVNL remains down around 18% year-to-date, marking its first annual decline since listing in 2019.
• Long-term performance remains strong, with gains of 450% over the past two years and about 1,400% over the last five years.

This trajectory reflects the stock’s resilience in the face of broader market fluctuations and its long-term growth potential in the railway infrastructure sector.

Summary

RVNL share price continues to attract attention with a four-day rally, reaching levels not seen since early October. The recent government fare rationalisation, coupled with significant project wins, has provided renewed momentum for the stock. While short-term market pressures remain, RVNL’s long-term performance underscores its role as a main player in India’s railway infrastructure landscape.

Source: Livemint