In This Article:
Release Date: February 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Rail Vikas Nigam Ltd (BOM:542649) is confident in achieving an 8,000 crore turnover in the last quarter, aligning with historical performance.
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The company has a robust order book of around 97,000 crores, with a balanced mix of railway and bidding works.
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International projects are being pursued, with ongoing projects in countries like Uzbekistan, Saudi Arabia, and the Maldives, indicating a strategic focus on global expansion.
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The company has secured a significant order of 13,200 crores for a telecom project, which is expected to grow further, opening new opportunities in the telecom sector.
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Rail Vikas Nigam Ltd (BOM:542649) has a strong financial position with no current need for borrowing, and competitive mobilization advance terms, reflecting financial stability.
Negative Points
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The transition from exclusive railway projects to market bidding has led to a potential slight dip in turnover.
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The execution of certain projects, like the Vande Bharat train sets, has been delayed due to design changes, pushing timelines back by 8 to 9 months.
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The competitive intensity in bidding for projects is high, with some sectors experiencing unhealthy levels of competition.
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The company's international order book is currently only 10% of the total, indicating a need for further growth in this area.
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There is uncertainty regarding future railway project assignments from the government, which could impact the company's traditional business model.
Q & A Highlights
Q: Can Rail Vikas Nigam Ltd achieve a turnover of 8,000 crore in the last quarter, and is the profit from the joint venture sustainable? A: Yes, achieving 8,000 crore in the last quarter is feasible as historically, maximum turnover is achieved in this period. The profit from the joint venture is not only sustainable but expected to improve significantly as the revenue stream from the joint venture will start after a year. (Chairman and Managing Director)
Q: What is the expected timeline for executing the 97,000 crore order book? A: The typical gestation period for these projects is 3 to 4 years. Orders will continue to be added, with 25,000 crore worth of orders already secured this year. (Chairman and Managing Director)
Q: What is the status of the Vande Bharat train project? A: The project faced a delay due to a change in train configuration from 16 to 24 coaches, but it has now reverted to the original plan. The first prototype is expected in the first half of next year. (Chairman and Managing Director)