Shares of Rail Vikas Nigam Limited (RVNL) surged 3% on Tuesday, fueled by a fresh order win worth Rs 311 crore from the Central Railway.
This latest contract for building tunnels and bridges in Madhya Pradesh adds to a string of positive developments for the multibagger stock, which has already delivered over 370% returns in the past year.
The question on everyone’s minds now is:
Can RVNL revisit its one-year high of Rs 189.50 reached in September 2023?
Reasons for optimism:
- Order book boost: The recent order win comes on top of a Rs 1,098 crore contract secured in October from the Himachal Pradesh State Electricity Board. This robust order pipeline bolsters RVNL’s growth prospects and reaffirms its strong execution capabilities.
- Government tailwinds: The Indian government’s ambitious Rs 5.25 lakh crore investment program for the railways during 2024-2031 positions RVNL as a key beneficiary. The company’s expertise in developing railway infrastructure aligns perfectly with this national focus.
- Solid financials: RVNL’s Q2 results showcased a 3.4% rise in profit and a 15% sequential jump in net income. This healthy financial performance indicates the company’s resilience and its ability to generate sustainable returns.
- Chart analysis: RVNL’s stock price has formed a bullish breakout above the Rs 144 level, suggesting further upside potential.
- Momentum indicators: Both Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) point towards a sustained uptrend.
- Market Volatility: Broader market fluctuations could impact RVNL’s short-term trajectory.
- Interest rate hikes: Rising interest rates might lead to profit-booking within the broader infrastructure sector.
- Execution risks: Timely and efficient completion of ongoing projects will be crucial for maintaining investor confidence.
- Vaibhav Kaushik of GCL Broking sees a target of Rs 222 in the coming quarters, supported by the strong technical setup.
- Ravi Singh, market expert, opines that RVNL could reach Rs 180 in the near term, driven by positive momentum indicators.
While revisiting the one-year high might not be immediate, RVNL’s fundamentals and bullish technicals paint a promising picture.
The company’s order book momentum, coupled with the government’s infrastructure push, provides a strong foundation for continued growth.
However, investors should remain cautious of potential market volatility and execution risks.
This analysis is for informational purposes only and should not be considered as investment advice. Please consult a financial advisor before making any investment decisions.