RVNL shares snap two-day losing streak, gain over 12% after Cabinet approval to ₹24,657-crore railway projects

The surge in the RVNL stock was seen amid an overall positive trend in railway stocks like IRCON, IRFC and RailTel. The leading railway stocks rallied between 3% and 10% in morning trade.

The upward movement of RVNL stock price comes after the Cabinet Committee on Economic Affairs on Friday approved new railway projects worth ₹24,657 crore. The CCEA approved 8 new projects covering seven states.

The new projects will provide direct connectivity and improve mobility, providing enhanced efficiency and service reliability for Indian Railways, the Ministry of Railways said in a press release on Friday. The projects will cover 14 districts across the states of Odisha, Maharashtra, Andhra Pradesh, Jharkhand, Bihar, Telangana and West Bengal. The new projects will increase the existing network of the Indian Railways by 900 kilometres. The projects are expected to be completed by Financial Year 2030-31.

The announcement by the government on late Friday triggered a rally in railway stocks, including RVNL, on Monday. Shares of RVNL opened marginally higher at ₹524 on the NSE and further rallied as much as 12.26% to hit an intraday high of 581.7 apiece. The stock pared some of its early gains to trade at ₹577.35, up 11:43%, at 2:36 pm.

RVNL posted a consolidated net profit of ₹224 crore for the June 2024 quarter, down by 35% YoY, exchange filings on Thursday showed. The company’s revenue from operations dropped 24% in the first quarter of the current financial year.