Captains Speak     

Published: October 31, 2024
Updated: October 31, 2024

Rail Vikas Nigam

22k cr revenues expected in FY25

Rail Vikas Nigam Ltd (RVNL) - the executing arm of Indian Railways -- has emerged as the lowest bidder (LI) for a contract awarded by Maharashtra Metro Rail Corporation Ltd. The project, valued at approximately Rs 270 crore, involves the construction of ten elevated metro stations under Nagpur Metro Rail Project Phase II.

Revealing this, Rajesh Prasad, Director-Operations, added that the awarded contract comprises the development of seven elevated metro stations in Reach 3A located at Hingna Mount View, Rajiv Nagar, Wanadongri, APMC, Raipur Hingna bus station and Hingna. He was addressing a conference call organized to discuss the performance of the company during Q1FY25. He was joined by Sanjeeb Kumar, Director-Finance and CFO.

Reviewing the company's performance during Q1FY25, Mr Prasad said "consolidated net sales (including other operating income) of Rail Vikas Nigam for the quarter ended June 2024 has declined 26.88% to Rs 4,073.8 crore. Operating profit margin has declined from 6.27% to 4.46%, leading to a 48% decline in operating profit to Rs 181.53 crore. Employee costs increased from 0.84% to 1.15%. Other expenses rose from 92.90% to 94.39%. Other direct service costs rose from 92.19% to 93.14%. Other income fell 6.63% to Rs 262.95 crore. PBIDT fell 29.53% to Rs 444.48 crore. Provision for interest fell 5.96% to Rs 137.34 crore. PBDT fell 36.63% to Rs 307.14 crore. Provision for depreciation rose 25.27% to Rs 6.89 crore. Profit before tax was down 37.34% to Rs 300.25 crore.

The share of profit/loss was 82.20% lower at Rs 1.36 crore."

According to him, provision for tax was an expense of Rs 77.69 crore, compared to Rs 143.71 crore. The effective tax rate was 25.76% compared to 29.52%. Minority interest was nil in both the periods. Net profit attributable to owners of the company decreased 34.70% to Rs 223.92 crore.

ELECTION DELAYS

The order book of the company currently stands at Rs 83,221 crore. Most of the orders are for new railway lines, with railway line doubling of for around Rs 7,500 crore and gauge conversion for Rs 500 crore. Due to elections, the tendering and order finalization has slowed down. There were 52-57 tenders and the opening of bids of them and order finalization got delayed due to the elections.

An investment to the tune of Rs 25 lakh crore is in the pipeline/planned in railway infrastructure in the country and the company will be one of the beneficiaries.

According to Sanjeeb Kumar, CFO, the management is confident of achieving revenues of about Rs 22,000 crore or more for FY25. As per projects from the market, the margin will vary. For the Indore metro project that was picked from the market, the margin will be better than the nominated projects. The company is working on the challenges in relation to projects bagged in a competitive bidding process. Tenders for Bangladesh projects may not come soon/ will be delayed due to geopolitical reasons.