Rail Vikas Nigam: IDBI Capital Downgrades The Stock To 'Sell' After Q3 Results — Here's Why

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IDBI Capital Report

Rai Vikas Nigam Ltd.'s Q3 FY25 PAT was below our estimates by 10%, this was due to weak execution and slower government capex spending. RVNL has guided for flat revenue at Rs 220 billion for FY25 and expects Ebitda margins in the range of 5.5-6%.

The order book stands at Rs 970 billion, which is four times trailing twelve months revenue, with the share of competitive bid projects increasing to 45%+.

RVNL has bid for multiple international orders and anticipates securing new projects from the international market. We will monitor execution improvements and margin expansion.

Following the results, we have revised our rating from Hold to Sell and arriving at target price of Rs 325, factoring in the weak 9MFY25 performance. At this target price, RVNL's implied multiple stands at 52 times FY27E EPS.

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