RVNL Share Price: Experts Recommend ‘Buy on Dips’ Despite Weak Q1 2024 Results

RVNL share price: Shares of Rail Vikas Nigam Limited (RVNL) have been on a downward trend for the past two consecutive sessions following poor Q1FY24 results. In two consecutive sessions, the share price of RVNL has fallen from approx. ₹566 per piece ₹515 on the NSE, recording a correction of almost 9 per cent during the period. However, stock market experts feel that the fall in RVNL shares is an opportunity for long-term investors. The railway PSU underperformed in the first quarter of the current fiscal due to the political paralysis during the Lok Sabha elections. They said RVNL could bounce back from the next quarter as a new government has been formed after the Lok Sabha election results. They advised RVNL shareholders to accumulate the shares on any decline of 5-7 per cent from the current levels.

After losing about 5 percent on Thursday, RVNL stock opened today with a downside gap of ₹538 and reached an intraday low ₹USD 515.40 per share on the NSE, down 9 per cent from Wednesday’s close of approx. ₹566 per piece.

RVNL Q1 2024 Results Overview

Talking about the reasons behind the continuous selling in RVNL shares, Seema Srivastava, Research Analyst, SMC Global Securities, said, “RVNL shares have been on a downward trend in the last two sessions on the back of weak Q1 results. The PSU has reported a big decline in net profit and net income. Despite this, the state-owned railway company deserves the benefit of doubt on the political paralysis caused by the Lok Sabha elections in Q1 of the current fiscal. The company is expected to bounce back strongly once the Modi 3.0 government kicks in at the Centre.”

RVNL Share Target Price

Talking about the outlook for RVNL stock, Ganesh Dongre, Senior Manager – Technical Research at Anand Rathi, said, “The RVNL stock is in a bearish pattern after making a short-term high on the technical chart. The RVNL stock is in a bearish pattern ₹495 to ₹The 590 range and the stock could fall further if it breaks through the current support which is at ₹495. RVNL shareholders are therefore advised to maintain the stop loss level at ₹495, while new investors are advised to wait for some time and allow the stock to stabilize.

“Once the stock stabilises, one can pile into RVNL stock on every 5-7 per cent dip. Risk-averse individuals can buy RVNL stock at the current price by maintaining a ‘buy on dips’ strategy. However, this strategy is meant only for long-term investors,” said Seema Srivastava, SMC Global Securities.

RVNL Q1 2024 Results

RVNL reported a 35 per cent decline in consolidated net profit for the first quarter ended June 2024, with profit standing at ₹224 crore, as compared to ₹343 crore in the corresponding quarter last year.

Operating income in the April-June 2024 period fell by 27 percent, reaching ₹4074 crore, down from ₹5,572 crore in the corresponding period of the previous year.

First quarter EBITDA fell 48 percent year-on-year (y/y) to ₹189 crore, as compared to ₹349 crore in the same quarter last year. Additionally, margins declined by 180 basis points year-on-year to 4.5 per cent.

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