Railway stocks jumped up to 15 per cent on the BSE

RVNL is up 15%, leading the rally in railway stocks.

Summary

Railway stocks surged up to 15% on the BSE on Friday, headed by Rail Vikas Nigam Limited (RVNL).RVNL is up 15.47 percent, to Rs 281.40. IRCON is up 8.85 percent to Rs. 222.10.IRFC is up 8.84% at Rs 159.20. RITES is up 7.3% to Rs 558.35. According to an HDFC Securities study.

Railway stocks surged up to 15% on the BSE on Friday, headed by Rail Vikas Nigam Limited (RVNL).

RVNL is up 15.47 percent, to Rs 281.40. IRCON is up 8.85 percent to Rs. 222.10.

IRFC is up 8.84% at Rs 159.20. RITES is up 7.3% to Rs 558.35. Railtel is up 7.1 percent to Rs 389. IRCTC is up 5.2% at Rs 975.

According to an HDFC Securities research, RVNL is a project execution agency that works for and on behalf of the Ministry of Railways and is expected to play a significant part in the development of railway infrastructure in India.

It has excellent order book exposure. RVNL has diversified into non-railways.

It has excellent order book exposure. RVNL has diversified into non-railway projects, winning orders totaling Rs 32,000 crore through competitive bidding in the last two years.

It has also expanded into other regions, conducting a project in the Maldives and signing an MoU with the Kyrgyz government.

The number of orders secured through competitive bidding is increasing, reducing its reliance on Ministry of Railways nominations.

RVNL employs an asset-light business model, which reduces its fixed asset component, relieving stress on the balance sheet and results in fewer inventory days.

It has also started consulting services, which may result in margin expansion, according to HDFC Securities.

Its orderbook of Rs 67,000 crore at the end of Q2FY24 provides a three-year vision.

According to the report, the company's balance sheet is strong, as are its operating cash flows.