RVNL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.5

📊 Core Financials Analysis

Profitability

ROE: 14.4% and ROCE: 15.0% — solid return metrics for a government-backed infrastructure firm.

EPS: ₹5.27 — modest, with a sharp quarterly profit drop (−41.3%) from ₹373 Cr to ₹128 Cr, indicating earnings volatility.

Dividend Yield: 0.47% — low, but consistent with a growth-oriented capital allocation.

Balance Sheet & Cash Flow

Debt-to-equity: 0.63 — moderate leverage, manageable given its project-based revenue model.

Cash flows are generally stable, supported by long-term government contracts and milestone-based payments.

📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 68.8 Highly overvalued vs industry PE of 20.6

P/B Ratio ~8.74 Elevated, not fully justified by ROE

PEG Ratio 22.9 Extremely high — valuation exceeds growth expectations

Intrinsic Value ₹310–₹330 (est.) Current price ~10–15% above fair value

🧠 Business Model & Competitive Edge

Company Profile: Rail Vikas Nigam Ltd (RVNL) is a public sector enterprise under the Ministry of Railways, focused on executing rail infrastructure projects across India.

Strengths

Strategic role in India’s railway modernization and expansion.

Strong order book and execution capabilities.

Government backing ensures policy alignment and funding visibility.

Challenges

Earnings volatility due to project-based revenue recognition.

High valuation multiples not backed by consistent profit growth.

FII holding declined slightly, suggesting cautious institutional sentiment.

📈 Technical & Sentiment Overview

RSI: 67.6 — nearing overbought zone, short-term caution advised.

MACD: 3.46 — bullish momentum, but may be peaking.

DMA 50 & 200: Price hovering between both — trend indecisive.

Volume: Below weekly average — cooling investor interest.

💡 Entry Zone & Long-Term Guidance

Suggested Entry Range: ₹310–₹330 — closer to intrinsic value and technical support.

Holding Strategy

Suitable for long-term investors bullish on India’s infrastructure and railway growth.

Price targets for FY2025 range from ₹400 to ₹520, and for FY2030 from ₹960 to ₹1,550

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Monitor quarterly execution, order inflows, and policy tailwinds under PM Gati Shakti and National Rail Plan.

RVNL is a strategic infrastructure play with strong government backing and long-term potential, but current valuations suggest caution. If you're building a portfolio with exposure to public sector infrastructure, this one deserves a watchlist spot. You can explore deeper insights on Trendlyne’s RVNL dashboard

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or review long-term forecasts on Moneymint Idea’s RVNL analysis

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moneymintidea.com

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trendlyne.com

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