RVNL Shares Continue To Zoom On Bagging Multi-Crore Orders From BSNL

Share price of Rail Vikas Nigam Ltd. continued their upward momentum on Friday, rising over 6% in the second consecutive day of gains fuelled by major order wins from Bharat Sanchar Nigam Ltd.

The stock had already surged by over 11% on Thursday, following announcements of significant orders from BSNL.

On Jan. 16, RVNL had secured a letter of acceptance from BSNL for a project valued at Rs 9,613.4 crore. The project is centered around the development, upgradation, and maintenance of BSNL's middle-mile network under the Bharat Net initiative.

The project will be executed under the design, build, operate and maintain model, with a three-year construction period, followed by a decade-long maintenance contract. The maintenance fee for the project will be 5.5% of the capital expenditure annually for the first five years, increasing to 6.5% per annum for the subsequent five years.

On Jan. 15, RVNL had disclosed another significant order win, worth Rs 3,622 crore, also from BSNL. This order is similarly focused on the development and maintenance of the middle-mile network for Bharat Net. As with the earlier contract, the project will follow the DBOM model, and RVNL is set to complete construction in three years, with the maintenance period extending over the next decade.

The recent order wins have proven to be a major catalyst for RVNL's stock, with investors reacting positively to the sizable contracts.

The scrip rose as much as 6.13% during the day to Rs 436.35 apiece on the NSE. It pared gains to trade 5.76% higher at Rs 434.85 apiece, as of 10:05 a.m.

The share price has risen 80.89% in the last 12 months. The total traded volume so far in the day stood at 6.4 times its 30-day average. The relative strength index was at 54.

Out of three analysts tracking the company, one maintains a 'buy' rating, one recommends a 'hold' and another suggests 'sell,' according to Bloomberg data. The average 12-month consensus price target implies an downside of 41.2%