State-owned Rail Vikas Nigam Ltd (RVNL) is grabbing attention on Thursday, January 16, after announcing that it has received a Letter of Acceptance from Bharat Sanchar Nigam Ltd (BSNL). This letter is about an important project that involves the development, upgradation, and maintenance of the BharatNet middle-mile network.
RVNL, along with its partners HFCL and ATS, will work together on this project, with RVNL leading the team. The total value of the project is Rs 3,622.14 crore, which will also cover maintenance costs for 10 years. The work will begin with a three-year construction phase, followed by two five-year phases for maintenance.
During the maintenance years, RVNL will receive payments based on the project costs: 5.5% for the first five years and 6.5% for the next five years. This project is part of RVNL’s usual business activities.
In its recent quarterly report for Q2 FY25, RVNL saw its profits drop by 27% compared to last year, earning Rs 286.9 crore down from Rs 394.3 crore. This decline was due to lower earnings and higher costs. RVNL’s revenue from operations also fell slightly, by 1.2% to Rs 4,855 crore.
As per Niftystat, the average target price for RVNL shares is Rs 357, suggesting a possible drop of 4% from their current price. Analysts recommend a ‘Sell’ for RVNL shares, as there are concerns about its performance.
On the previous day, RVNL shares closed at Rs 371.9, down by 1.3% while the Sensex index slightly increased. Over the last six months, RVNL shares have dropped by 41%, but they’ve increased by 367% over the past two years. Currently, RVNL has a market value of Rs 77,541 crore.
(Disclaimer: The opinions in this article are of the experts and do not reflect the views of Economic Times.)
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