Rail Vikas Nigam (RVNL) hosted a conference call on May 30, 2023. In the conference call the company was represented by  Pradeep Gaur, Chairman & Managing Director;  Rajesh Prasad, Director (Operations) and Sanjeeb Kumar, Director (Finance) and CFO.

Key takeaways of the call

Physical Performance in FY23 as well as revenue/PAT was for the period is all time high. RVNL has commissioned railway line length of 1044 km in FY23.    Rail line commissioned in last 2 years crossed 1000 km. 

Physical performance in Q4FY23 was much higher than Q4FY22.  So full benefit of it not captured in Q4FY23 financials and remaining part will get captured in Q1FY24 financials. 

OB outstanding at end of March 2021 was Rs 56000 crore plus (it was about Rs 55-56000 crore as end of March 2022) and of which orders won through competitive bidding is about Rs 20000 crore.  Of the current order book about Rs 36977 crore orders were from Railways.    New line orders were for about Rs 18000 crore, metro rail orders were Rs 11000 crore. 

The company is successfully transitioning to competitive bidding market from Indian Railway assigned contracts model. The focus is currently more on getting more and more orders. However given strong technical ability the execution of strong order book in time to come will boost revenue growth and profitability.  So the rate of growth of about 4.64% reported in FY23 will gain momentum going forward soon.   

The business development model  contracts which RVNL bagged through competitive bidding, it is doing lot of value engineering by which the margin is to improve in the time to come unlike projects assigned and SPV projects where margin remain same.  

RVNL- TMH (Transmashholding of Russia) JV that won the mandate to build 200 vande bharat trains. There is no dispute between Russian partner and RVNL.   Many of suppliers and bankers especially those from Western Europe and US will be confident if RVNL have majority or major stake in JV.  But Russians are not comfortable with that but that will be sorted out soon.    No compromise on timeline i.e. may/june 2025 by which the first 2 prototype trains to be tested and this will be adhered to. 

Kirgizstan Order update - things will move sooner than later.

SPVS turned in improved performance in FY23.    The traffic went up in Kutch Railway Company, Krishnapatnam Railway Company (KRCL) and   Bharuch Dahej Railway Company (BDRCL).  Angul Sukinda Railway (ASRL) already commissioned and operational with improved traffic.   In FY23, PAT of Kutch Rail Company has increased by about 70% from Rs 137 crore profits to Rs 232 crore, The PAT of KRCL was a profit of Rs 25.8 crore against loss in FY22. 

Eyeing so many infra projects apart from railways. In time to come it will be announced.

Of the 182 projects assigned by IR so far about 140 projects got commissioned.