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IDBI Capital Report
Rail Vikas Nigam Ltd.'s Q3 FY24 performance was weak as revenue has declined by 6% YoY and profit after tax declined by 6% YoY.
Rail Vikas Nigam at the end of 9M FY24 has reported order book at Rs 650 billion , three times trailing twelve months revenue. Order inflow has been consistent, in Q3 FY24 it stood at Rs 17 billion versus Rs 66 billion in H1 FY24.
Order win is becoming diversified with 9M FY24 inflow has come from sectors like railway (contributing 20% to 9M FY24 inflow), metro (26%), irrigation (14%), power (30%) and remaining from road sector at 10%.
Rail Vikas Nigam which started as railway engineering, procurement and construction company is moving to other sectors for growth and thus margin trajectory is key to watch going ahead.
Post the result we have introduce FY26E and revised SOTP base target price to Rs 248, this implies 30 times FY26E EPS (earlier target price Rs 149, ~20 times FY25E EPS) and retain 'Hold' rating.
We have modeled EPS increase at 7%/9% YoY in FY25E and FY26E.
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