Rail Vikas Nigam Secures ₹145 Crore Southern Railway Project Shares Rally 19% in September

Post by : Meena Rani

Rail Vikas Nigam Limited (RVNL), a prominent railway infrastructure company in India, has once again captured investor attention following a major order win. In a regulatory filing post-market hours on September 22, the company announced that it had emerged as the Lowest Bidder (L1) for a project from Southern Railway, valued at ₹145.34 crore, including taxes.

This project represents RVNL’s continued momentum in securing significant railway infrastructure contracts, highlighting its growing presence in India’s rail electrification and modernization initiatives.

Project Scope and Technical Details

The Southern Railway project entails the design, supply, erection, testing, and commissioning of traction substations. Key components of the project include:

• Power quality compensating equipment

• Associated switching posts (SP/SSP) for a 2x25 kV AT Feeding System

• SCADA (Supervisory Control and Data Acquisition) system integration

• Automatic Fault Locator (AFL) systems for the Salem division

The project is slated for completion within 540 days and is designed to support a 3,000 MT loading target. By enhancing traction substation capacity and power quality, the project aims to improve operational efficiency and reliability across the Southern Railway network.

Second Major Order in September

This order marks RVNL’s second major contract in September, following a ₹169.48 crore order from West Central Railway on September 10. Analysts note that the back-to-back order wins reflect a renewed pickup in railway infrastructure projects, which had slowed earlier in the year.

The consistent inflow of orders demonstrates RVNL’s ability to maintain competitiveness in bidding processes, particularly in high-value projects involving advanced electrical systems and automation.

Stock Performance and Investor Sentiment

RVNL shares have rebounded 19% in September after three months of consecutive decline. Earlier, the railway sector experienced a prolonged bull run from May 2023 to July 2024, pushing stock valuations to unsustainable levels. Combined with slower order inflows, this led to sharp corrections and investor caution.

However, the recent orders, including the Southern Railway and West Central Railway projects, have revived investor confidence, bringing RVNL back into focus. Market watchers highlight that sustained order wins and project execution efficiency are likely to support further positive sentiment in the stock.

Financial Performance Snapshot

For the quarter ending June 2025, RVNL reported the following:

• Revenue: ₹3,908 crore, down 4.1% YoY

• Net Profit: ₹134 crore, down 40% YoY from ₹224 crore

• Quarter-on-Quarter Revenue: dropped 35%

• Profitability: declined 71% QoQ

• Margins: contracted by over 500 basis points

• EBITDA: fell nearly 90% sequentially

Despite this decline, analysts believe that renewed order inflows and improved execution in ongoing projects could stabilize RVNL’s financial performance in the upcoming quarters.

Strategic Importance and Market Outlook

The Southern Railway project is part of India’s broader initiative to electrify and modernize the railway network. By integrating advanced systems such as SCADA and AFL, the project not only enhances operational efficiency but also reduces downtime and maintenance costs.

RVNL’s consistent order wins position it as a key player in India’s railway modernization plans, especially in high-value electrification and automation projects. Market experts suggest that the company could see steady revenue growth if it continues to secure such contracts in the near future.

Investors are also closely monitoring how RVNL executes these projects, as timely completion and quality delivery could reinforce long-term investor confidence and positively impact stock valuations.

Rail Vikas Nigam, RVNL, Southern Railway Order, Railway Infrastructure