Rail Vikas Nigam Ltd. (RVNL) emerged as the lowest bidder for the manufacturing and maintenance of Vande Bharat trains. Following the announcement, the company’s share price zoomed 15.38% to reach an intraday high of ₹ 67.50 apiece. Its shares closed at ₹ 65.70, up 12.31% on the National Stock Exchange (NSE).
This project includes the upgrade of government manufacturing units and train set depots. A joint venture of Metrowagonmash-Mytischi-RVNL has been declared L-1. RVNL has a 25% stake in the venture. The consortium has been issued a letter of award. The total quantity is 200 trainsets and the cost per set is ₹ 120 crores.
RVNL is engaged in the business of implementing various types of rail infrastructure projects assigned by the Ministry of Railways. It has given multibagger returns of 100% in the past six months. Therefore, if an investor would have invested ₹ 1 lakh in the company’s shares six months ago, the value of their holdings would have been ₹ 2 lakhs today!
RVNL has a market capitalization of ₹12,917 crores and is a small-cap company. It has an ideal return on equity of 19.66% and an ideal debt-to-equity ratio of 0.91. Moreover, it has a good dividend yield of 3.13%. The company’s shares were trading at a price-to-earnings ratio of 8.48, which is lower than the industry average of 9.18, indicating that the company’s shares might be undervalued as compared to its peers.
Meanwhile, another multibagger railway stock, Titagarh Wagons gained 9.98% during Thursday’s intraday trades to reach a high of ₹ 234.75. A consortium of Titagarh Wagons and state-run Bharat
Heavy Electricals Ltd. emerged as the second-lowest bidder for the manufacturing and maintenance of Vande Bharat trains.
Titagarh Wagons has given multibagger returns of 155.33% in the past year, as its share price increased from ₹ 86.85 to ₹ 221.75 apiece. Therefore, if an investor would have invested ₹ 1 lakh in the company’s shares a year ago, the value of their holdings would have been ₹ 2.55 lakhs today!