Rail Vikas Nigam Limited

Industrials — Engineering & Construction · NSE

₹199.45+₹2.71 (+1.38%)

DalalBaazaar Score

44 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by negative free cash flow.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:47 pm

Understanding the Business

Company site ↗

The 60-second version of Rail Vikas Nigam Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Rail Vikas Nigam Limited, together with its subsidiaries, engages in rail infrastructure works in India and internationally. The company undertakes rail project development and implementation, as well as provides financial resources mobilization services.

IndustryEngineering & Construction

SectorIndustrials

Employees250

Annual revenue₹20,412 Cr

How does it make money?

Turns over ₹20,412 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 250 employees supports ₹81.65 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹81.65 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., ADANI PORT & SEZ LTD, SIEMENS LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 11.0% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE14.1%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 12.8% and earnings to grow about 16.7% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+12.8%

Est. earnings growth+16.7%

Analysts1

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +1% while net margin moved -35% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+1%

Margin effect-35%

DalalBaazaar Score

44/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 0.2% — barely ahead of inflation
✗ Profit has declined at 13.3% a year

Quality vs. Valuation

Company Quality

41/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

34/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

46.3x

3Y Median

48.6x

40 monthly readings · mean 48.7x · range 19.2x–88.3x

Sector Median

30.1x

median of 3 sector peers

🟡Currently trading close to its 3y median of 48.6x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 54% above the peer median of 30.1x.

vs. its own history

Fair

48.6x median over 40 months · -5%

vs. sector peers

Expensive

30.1x median of 3 peers · +54%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

36.8x

PEG

2.74

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 25% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 18.5% to 8.9% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 16.5% to 11.0% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 2 high · 3 watch

🔴Receivables growing faster than salesFinancial
Receivables up 454% against revenue up 1% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 101% against revenue up 1% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹1,950 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 35% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 2.8 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 25% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 8.9% to 6.1%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 3.9x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 454% against revenue up 1%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 54% above the peer median. That premium needs a reason that persists, or it closes.
Growth barely outpaces inflation
Revenue compounding at 0.2% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 4%✓ 6.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.9x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹1,950 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✓ 3.8x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 4% a year✗ 0.2% CAGR
Latest reported year was 10.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

Investment Checklist

5 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 5 neutral · 2 weak

Market Cap

₹41,586 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

46.3x

Expensive

Expensive — verify against sector peers

P/B Ratio

4.23x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹4.31

Profitable

Profitable on a per-share basis

ROE

8.9%

Moderate

Moderate capital efficiency

ROCE

11.0%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.49x

Low

Conservative leverage

Revenue Growth (YoY)

10.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

16.9%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.86%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹1,950 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

40.7x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

4.0%

Weak

Thin margins leave little room for error

Net Margin

4.3%

Average

Average bottom-line conversion

Current Ratio

1.91

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.84

Market-like

Moves roughly in line with the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

200.6 / 210.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

41.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹20,282 Cr	₹21,879 Cr	₹19,923 Cr	₹20,412 Cr	+0.2%
EBITDA	₹1,813 Cr	₹2,132 Cr	₹1,781 Cr	₹1,244 Cr	-11.8%
EBITDA Margin	8.9%	9.7%	8.9%	6.1%	—
PAT (Net Profit)	₹1,342 Cr	₹1,551 Cr	₹1,278 Cr	₹875 Cr	-13.3%
EPS	₹6.81	₹7.44	₹6.13	₹4.2	-14.9%
ROE	18.5%	17.8%	13.3%	8.9%	—
ROCE	16.5%	17.3%	14.8%	11.0%	—
Total Debt	₹6,441 Cr	₹6,033 Cr	₹5,419 Cr	₹4,818 Cr	-9.2%
Free Cash Flow	-₹4,125 Cr	₹2,615 Cr	₹1,449 Cr	-₹1,950 Cr	—

🟡 Revenue has been broadly flat over 3 years (0.2% a year).

🔴 EBITDA has shrunk at 11.8% a year over 3 years.

🔴 EBITDA Margin has fallen from 8.9% to 6.1% over 3 years (-2.8 pts).

🔴 PAT (Net Profit) has shrunk at 13.3% a year over 3 years.

🔴 EPS has shrunk at 14.9% a year over 3 years.

🔴 ROE has fallen from 18.5% to 8.9% over 3 years (-9.6 pts).

🔴 ROCE has fallen from 16.5% to 11.0% over 3 years (-5.6 pts).

🟢 Total Debt has shrunk at 9.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹21,702 Cr

Total Liabilities

₹11,884 Cr

Cash & Equivalents

₹556 Cr

Operating Cash Flow

-₹1,889 Cr

Capex

-₹61 Cr

Shareholding (proxy)

Institutional Holding

8.2%

Insider Holding

72.8%

Corporate Actions

Dividend Rate

₹1.71

Ex-Dividend Date

18 Aug 2026

Analyst Consensus

Recommendations

0 Buy · 0 Hold · 1 Sell

Target Price (Mean)

₹165

-17.3% vs CMP

Target Range

₹165 – ₹165

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
ADANI PORT & SEZ LTD	29.9x	14.1%
SIEMENS LTD	88.8x	10.5%

Recent News

1 mixed5 general

RVNL Share Price News: Price Rise, Ratios and Sector View

Univest, 13 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Is Now An Opportune Moment To Examine Rail Vikas Nigam Limited (NSE:RVNL)?

Simply Wall Street, 15 Sept

InvestingPro warned of 50% drop in Rail Vikas Nigam shares By Investing.com

Investing.com India, 19 Jul

Stock Radar: RVNL showing signs of reversal after falling over 40% from highs; time to buy?

The Economic Times, 07 Aug

Railway stock: RVNL shares to be in focus on Monday after ₹903 crore order from SJVN

Livemint, 04 Sept

RVNL shares climb over 3% on securing order worth ₹161 crore from East Coast Railway; all you need to know

Upstox, 20 Aug

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health

MiddlingValuation · Risk

WeakBusiness Quality · Growth · Profitability

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 2 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Revenue growth stays above 4% a year · see Key things to watch ↑