RVNL Concall February 2025: Key Highlights and Updates
Financial Performance
Rail Vikas Nigam Ltd (RVNL) held its Q3 FY25 earnings call on February 19, 2025. The company has set a revenue target of ₹21,000 crore for FY25. So far, ₹13,000 crore has been achieved in the first nine months, leaving ₹8,000 crore to be met in Q4.
Profits from joint ventures (JVs) were ₹56 crore this quarter, with the management confident about further improvements.
Joint Ventures
- Kinet JV is currently facing a negative profit of ₹76 crore due to the ongoing manufacturing setup. However, revenue generation is expected within a year.
- Once operations commence, profits from JVs are projected to reach ₹130 crore, with manufacturing costs estimated at ₹120 crore per train set.
Order Book and Revenue
- The current order book stands at ₹97,000 crore:
- ₹49,000 crore from bidding works
- ₹47,600 crore from railway projects
- Previously, the order book was around ₹140,000 crore. The company is now focusing on market-driven bidding rather than government-assigned projects.
- The projected annual turnover for the next few years is ₹28,000 to ₹30,000 crore, with most projects taking 3 to 4 years to execute.
Project Updates
- Vande Bharat project has been delayed due to changes in train configurations. The first prototype is now expected in the first half of 2026.
- BharatNet project worth ₹13,200 crore has recently received approval, opening significant telecom sector opportunities.
International Expansion
RVNL is actively exploring international projects, including:
- Uzbekistan & Saudi Arabia: Solar projects
- Congo: Transmission lines
- Turkey: Railway and metro projects
- Peru: Government-to-government contracts
The management sees global expansion as a key growth driver.
Cash Flow and Working Capital
- The company maintains a stable working capital position.
- Adequate reserves and mobilization advances have reduced the need for borrowing.
- Secured competitive financing with an interest rate of 0.08% on mobilization advances.
Competitive Landscape
- Bidding competition has increased, leading to aggressive pricing in EPC contracts.
- However, BOT projects and specific metro contracts offer better profit margins with lower competition.
Future Outlook
- The management is optimistic about achieving its revenue targets, especially in Q4.
- Despite market competition, margins are expected to remain stable due to strong execution strategies.
Challenges
- Execution delays caused by external factors such as monsoons, festivals, and elections.
- The company is also monitoring potential policy changes regarding older railway projects that could impact future strategies.
FAQs
What was RVNL’s revenue target for FY25?
The target is ₹21,000 crore, with ₹13,000 crore already achieved.
Why is Kinet JV facing losses?
It is still in the manufacturing setup phase, but profits are expected to improve once operations start.
When will the first Vande Bharat prototype be ready?
It is expected in the first half of 2026.
What international projects is RVNL pursuing?
Projects in Uzbekistan, Saudi Arabia, Congo, Turkey, and Peru, focusing on solar, transmission lines, railways, and metro developments.
How is RVNL handling cash flow?
The company has a stable working capital and low borrowing needs due to mobilization advances.
RVNL remains on track to meet its growth targets despite industry challenges. With a strong order book, international expansion, and strategic project execution, the company is well-positioned for the future.
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I’m Rahul Chaudhary, and I write about everything related to the Share Market. From Stock Trends and Share Prices to the Latest News and IPO Updates, my articles aim to provide you with valuable insights to help you navigate the world of investing. Stay tuned for expert tips and updates to keep you informed!
