Rail Vikas Nigam (RVNL) shares tumbled more than 3% on Wednesday, extending losses for the second consecutive session after the release of Q4 results. According to reports from The Economic Times, the stock has now fallen around 8% in two days to hit an intraday low of ₹251.30 apiece on NSE, nearing its 52-week low of ₹248 apiece which it had hit in March this year.
The decline follows RVNL's disappointing Q4 results, where the company reported a 43% year-on-year decline in standalone net profit to ₹212 crore for the January-March quarter of FY26. As reported by The Economic Times, revenue rose modestly by 5% YoY to ₹6,648 crore during the quarter under review. The domestic brokerage noted that RVNL reported weak Q4 performance, with modest revenue growth offset by a sharp decline in profitability.
According to the brokerage analysis reported by The Economic Times, margin pressure was driven by non-recurring factors including an onerous contract provision and JV reconciliation adjustments. Management expects underlying profitability to improve in FY27E versus the reported FY26 margin of 3.8% and has guided for revenue growth of 15-20% in FY27. However, continued margin weakness and lower other income have led analysts to cut FY27 and FY28 EPS estimates by 15% and 5% respectively.
Despite the weak quarterly performance, RVNL maintains a robust order book of ₹993 billion (~4.9x FY26 standalone revenue), with a ~50:50 split between nomination and competitive bidding projects. As reported by The Economic Times, segment-wise, Railways dominates at ₹570 billion, followed by signaling at ₹149 billion, ports/roads/highways at ₹102 billion, metro at ₹99 billion, Power T&D at ₹50 billion, and Hydro/Irrigation at ₹20 billion. FY26 standalone order inflows rose 129% YoY to ₹58.75 billion, with an additional ₹12 billion through JV wins.
In the longer term, the railway stock has gained more than 118% in three years and 754% in five years, according to The Economic Times. The company currently has a market capitalisation of more than ₹52,740 crore. PL Capital maintained its 'Sell' rating and reduced its target price, citing weak profitability despite modest revenue growth.
