RVNL Bags Rs 3,622-Crore Order For Middle-Mile Network Development From BSNL

Rail Vikas Nigam Ltd. received a letter of acceptance from Bharat Sanchar Nigam Ltd. for the development of the middle-mile network of Bharat Net on design, build, operate and maintain model, according to an exchange filing on Wednesday.

The development involves creation, upgradation and operation and maintenance. The deal is for the broad consideration of Rs 3,622 crore.

The time period by which the contract is to be executed is three years for construction and 10 years of maintenance contract at 5.5% per annum of capex for the first five years. And 6.5% per annum of capex for the next five years.

RVNL reported a 27% decline in consolidated net profit for the second quarter of the current financial year, falling short of analysts' expectations.

The company's net profit stood at Rs 286.9 crore for the quarter ended September, compared to Rs 394.4 crore in the same period last year. This figure was below the Rs 356-crore profit projected by analysts surveyed by Bloomberg.

Revenue from operations also dipped slightly, decreasing by 1.2% to approximately Rs 4,855 crore during the July–September period, compared to Rs 4,914.3 crore in the corresponding quarter of the previous year.

Shares of RVNL rose as much as 2,72% during the day to Rs 387 apiece on the National Stock Exchange. It closed 1.29% lower at Rs 371.90 per share, compared to a 0.16% advance in the benchmark Nifty. The share price has risen 68.55% in the last 12 months.

One out of the three analysts tracking the company has a 'buy' rating on the stock, one suggests 'hold' and another recommends 'sell', according to Bloomberg data. The average of 12-month analysts' price targets implies a potential downside of 32.5%