Rai Vikas Nigam (RVNL) shares surged as much as 7% to an intra-day high of Rs 39 after the company bagged an order worth Rs 3,600 crore from BSNL. 

“A Letter of Acceptance (LoA) has been received from Bharat Sanchar Nigam (BSNL) for the development (creation, upgradation, and operation & maintenance) of the middle mile network of Bharat Net on design build operate and maintain (DBOM) model,” read an exchange filing.  

RVNL must complete the contract within three years and then 10 years for maintenance, which is 5.5% per annum of capital expenditure for the first five years. After that, maintenance will be charged 6.5% per annum of capital expenditure for the next five years. 

Around a week back, the company signed a memorandum of understanding (MoU) with GBH International Contracting LLC (GBHIC), a Dubai-based company. “To work together to explore the business opportunities in the civil infrastructure sector in GCC Countries,” said the company in a separate release. 

RVNL in Q2

The company reported a drop of 27.24% year-on-year in its net profit standing at Rs 286.88 crore in Q2 FY25, compared with Rs 394.26 crore in the year-ago period. Its revenue from operations declined 1.21% to Rs 4,854.95 crore in Q2 FY25 against Rs 4,914.32 crore in the same quarter a year ago.

RVNL Vs Nifty 50

The railway stock has risen 1% in the previous five trading sessions, including today’s gains. It has fallen more than 15% in the last one month and 36% in the past six months. The stock has wiped out 7% of investors’ wealth from year to date. However, it has given a return of over 78% in the past one year. 

To compare, the benchmark index, Nifty 50 has fallen 0.8% in the last five days. The index has fallen 5.5% in the last one month and 5% in the past six months. It has declined by 1.8% from year to date. However, it has risen more than 5.8% in the previous one year. 

As the union budget 2025-26 approaches the experts expect that the government may boost the railway sector budget, with an anticipated 15-18% increase in allocation for this segment. In the 2024-25 budget, Rs 2,62,200 crores were allocated to the railway sector. 

RVNL was incorporated as a public sector undertaking to undertake and execute projects related to infrastructure, as well as develop, finance, and implement them.