Railway PSU stock Rail Vikas Nigam (NSE: RVNL) finds support at ₹228 after falling nearly 35% in the last one month. The stock is now back on track and its structure is now bullish in the short term.
In the last one year, RVNL has outperformed NSE Nifty 50 and BSE Sensex, generating 525% of returns for its investors.
Formation on Pin Bar, a bullish candle pattern can be observed on the weekly chart of RVNL.
After making a low of ₹256.40 , the stock is steadily rising and has shot up by 25% marking a new short term high.
Rail Vikas Nigam has performed quite well technically as well as fundamentally in the last 3 years. The railway company was able to maintain a good return on equity of 20.45% in the last 3 years.
The company has also shown a steady profit growth at 17% in the last three years along with strong financial efficiency in managing its assets.
Experts forecast that RVNL will keep growing its earnings by 7% each year. If we compare data of the last five years, the company managed to grow its earnings by 18.1%.
As the PSU sector continues to grow, Rail Vikas Nigam has also started to make higher highs every day in the previous five days.
RVNL's business details
RVNL is basically a PSU company that comes under the Railway Ministry. It was started in 2003 with the main aim of developing rail infrastructure across the different states in India.
Core work of RVNL inc;udes taking up projects from the Indian Railways to construct new railway lines, double up the existing tracks, do electrification works related to railways and execute other similar infrastructure projects as well.
The model followed by Railway Vikas Nigam is pretty straightforward – they get these project contracts from Indian Railways on a turnkey basis.
Basically, the Railways awards the entire project end-to-end to RVNL. The company then either uses its own workforce or hires contractors to actually get the project executed on the ground.
Important Support Levels for RVNL
| Support Levels for RVNL | Price (in ₹) |
|---|---|
| Support 1 | ₹245 |
| Support 2 | ₹224 |
| Support 3 | ₹201 |
| Support 4 | ₹185 |
RVNL's short term Swing Trading Targets
| Swing Target Levels for RVNL | Price (in ₹) |
|---|---|
| Target 1 | ₹236 |
| Target 2 | ₹293 |
| Target 3 | ₹314 |
| Target 4 | ₹335 |
| Target 5 | ₹366 |
Profit growth for RVNL
| Time Period | Profit Growth |
|---|---|
| 1 Year | 16.61% |
| 3 Years | 17.09% |
| 5 Years | 21.97% |
RVNL's return vs Nifty's returns compared
| Time Period | RVNL Return | Nifty50 Return |
|---|---|---|
| 7 Day | 4.6% | 3.5% |
| 30 Day | -18.7% | -1.9% |
| 90 Day | 56.1% | 20.4% |
| 1 Year | 328.9% | 76.7% |
| 3 Year | 882.9% | 88.1% |
RVNL Shareholders pattern
| Ownership | Percentage |
|---|---|
| Institutions | 7.9% |
| Public | 19.3% |
| Government | 72.8% |
Financial analysis of RVNL
| Category | Amount (in ₹) |
|---|---|
| Revenue | ₹208.95b |
| Cost of Revenue | ₹192.86b |
| Gross Profit | ₹16.1b |
| Other Expenses | ₹1.5b |
| Earnings | ₹14.5b |
| Earnings per Share (EPS) | ₹6.98 |
| Gross Margin | 7.70% |
| Net Profit Margin | 6.96% |
| Debt/Equity Ratio | 75.6% |
Final Words
RVNL has seen a massive bull run in past years which is now continuing further. Government’s strong focus on PSU and retailer traders’ rising interest towards these stocks have boosted the complete PSU sector.
Even FIIs are invested heavily in infrastructure and railway stocks like Railway Vikas Nigam. If the stock continues to perform well as forecasted, we might soon see RVNL doubling its share price.