RVNL sheds 3% after Vande Bharat train JV gets derailed

Rail Vikas Nigam Limited shares tanked almost 3 percent in early trade on June 20 after its joint venture deal with Russia’s CJSC Transmashholding (TMH) to manufacture and maintain 120 Vande Bharat trains broke down, Moneycontrol reported on June 19.

TMH did not agree to RVNL demand for a larger stake in the JV, and thus, has not deposited the bank guarantee of nearly Rs 200 crore required for the project to get started.

Also read: Exclusive: Railways may have to reissue tender for 120 Vande Bharat trains

At 10:35am, the stock was quoting at Rs.121 apiece, down 2.93 percent from the previous day’s close on the National Stock Exchange (NSE).

RVNL has recently been on a positive run bagging three orders in the last two months. It received a letter of award from the North Central Railways to provide automatic signalling and continuous track circuiting in Jhansi. It has won similar orders from the Madhya Pradesh Railways and Udaipur.

RVNL’s net profit in the fourth quarter nosedived 5 percent to Rs 360 crore from Rs 378 crore in the same quarter last year. The public sector undertaking’s (PSU) revenue operations tanked 11 percent to Rs 5,719 crore to Rs 6,437 crore in the corresponding quarter last year.

Follow our live blog for all the market action

RVNL was established in 2003 as a wholly owned Public Sector Undertaking (PSU) of the Ministry of Railways. Its primary goals were to generate additional financial resources and execute projects related to the development and expansion of railway infrastructure in a prompt manner. By March 2005, RVNL was operating at full capacity.

In the last three months, RVNL’s stock has surged 87 percent on the NSE.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.??