RVNL's Growth Outlook For H2FY25: On Track To Hit ₹22K Cr Revenue Target? | Mritunjay Pratap Singh

Summary

Amuna Pratap Singh, Director at RVNL, discusses the company's order growth and revenue outlook in a conversation about ongoing projects. He shares insights on a strong order pipeline, particularly in railways, metro, electrification, and signaling sectors. Despite a sluggish start in Q1 and Q2 due to macroeconomic factors, Singh expects significant growth in Q3 and Q4, including from international markets like the Middle East and Peru. He also highlights improvements in metro project execution, delays due to elections and weather, and optimistically projects improved margins for the coming quarters.

Takeaways

• 😀 The company has received orders worth approximately ₹16,000 crores in the current year and has achieved a 61% success rate in financially qualified bids.
• 😀 Major sectors driving order growth include railways, metros, reamp distribution systems, signaling works, and Bharat Net (digital infrastructure network in rural India).
• 😀 The company is expecting significant revenue visibility from the Bharat Net works in Uttar Pradesh, East and West Circle regions.
• 😀 Revenue targets for the current financial year are expected to be surpassed, with Q3 growth accelerating and Q4 projected to show substantial growth.
• 😀 The company is targeting orders from both domestic and international markets, including solar projects in the Middle East and railway projects in Peru.
• 😀 Railway electrification projects are a major focus, with India transitioning to 25 kV electrification to support freight traffic growth and improved carrying capacity.
• 😀 Significant order opportunities are expected in the railway signaling sector, especially with the introduction of automatic signaling systems to enhance safety.
• 😀 The company's margin trajectory is expected to improve, with continued strong performance from traditional railway projects and newly won contracts.
• 😀 Delays in execution during Q1 and Q2 were primarily due to elections affecting labor movement and extraordinary rains in Q2, but these issues have improved in Q3.
• 😀 The company is confident in a significant revenue growth from metro projects across seven cities, with improved performance expected in Q4 compared to the previous year.

Q & A

What is the current order inflow for RVNL in the current year?

RVNL has received orders worth approximately ₹16,000 crores in the current year.

What is RVNL's success rate in financially qualified bids?

RVNL has achieved a success rate of 61% in its financially qualified bids.

What sectors has RVNL won orders in during the current year?

RVNL has won orders in various sectors including Railways, Metros, Electrification, Signaling Works, and Bharat Net Works, particularly in UP and West Circle.

What is RVNL's revenue target for FY 2025, and are they likely to meet it?

RVNL's revenue target for FY 2025 is ₹22,000 crores, and they are confident of beating this target, with Q3 showing growth and Q4 expected to contribute significantly.

Where is RVNL focusing its order growth domestically and internationally?

Domestically, RVNL is focused on railway multi-tracking, bridge construction, electrification, and signaling projects. Internationally, they are targeting projects in the Middle East (solar and railway), as well as in Peru.

How is the railway electrification sector performing, and what is RVNL's role in it?

The railway electrification sector is undergoing major growth as Indian Railways aims to convert its network to 25 KV electrification. RVNL is well-positioned to win a significant portion of these contracts, especially in electrification and signaling.

What challenges have RVNL faced in metro project execution, and what is the outlook for Q3 and Q4?

RVNL faced some delays in metro projects in Q1 and Q2 due to factors like elections and extreme weather. However, Q3 has seen improvement, and the company expects significant growth in Q4.

What is RVNL's outlook for margins in the coming quarters?

RVNL is optimistic about not only retaining last year’s margin performance but also improving its margins due to better project execution and strategic bidding.

What major projects is RVNL involved in within the railway electrification sector?

RVNL is involved in the electrification of Indian Railways’ network, including the shift to 25 KV electrification to support higher freight capacities and reduce system failures.

What international markets is RVNL exploring for new projects?

RVNL is exploring new projects in the Middle East, particularly in solar energy, and railway projects in Peru, expanding its footprint beyond the domestic market.