Target: ₹42
CMP: ₹30.05
Rail Vikas Nigam (RVNL ) has hosted call with investors and analysts for business update. Weak order inflow has been a key concern for RVNL. For this, company highlighted, it has bided for orders of ₹21,000 crore. And out of opened tenders of ₹6,000 crore, it has won orders of ₹2,000 crore till date. RVNL has guided for order inflow of ₹15,000 crore in FY23.
Revenue execution in FY22 was strong, with an increase of 26 per cent y-o-y and RVNL over mid-term (4-5 years) expects to maintain this as its revenue growth.
We have retained our EPS estimate for FY23/24 but lower valuation multiple to 6x FY24E EPS (earlier 7x). Stock trades at 4x FY24 EPS and offers dividend yield of 7-8 per cent. Its order book at ₹57,000 crore provides revenue visibility for the next 3-3.5 years and catalyst for stock is new order win in competitive bidding.
Revenue increased by 15 per cent y-o-y to ₹6,400 crore and EBITDA margin was maintained at 6.3 per cent. EBITDA has increased by 15 per cent y-o-y to ₹410 crore. PAT stood at ₹378 crore, down one per cent y-o-y, +29 per cent q-o-q. Board recommended dividend of ₹0.25/share and thus FY22 DPS was ₹1.83/share (dividend yield of about 6 per cent).