Rail Vikas Nigam Limited (RVNL) Earnings Call Transcript
August 13, 2026
Earnings Call Speaker Segments
Good evening, ladies and gentlemen. I'm Kartikeyan, moderator for the conference call. I would like to welcome you all to the investors call of Rail Vikas Nigam Limited for Q1 of FY 2026/2027. We have with us today the management team of RVNL, Shri. Saleem Ahmad, Chairman and Managing Director; Shrimati Anupam Ban, Director Personnel; Shri. Mritunjay Pratap Singh, Director, Operations; Shri. Abhishek Kumar, Director of Finance; Shri. Amit Tandon, Director, Projects; and Shri Chandan Kumar Verma, Chief Financial Officer. [Operator Instructions]. Please note that this conference is being recorded. We will start with a brief opening remarks from the CMD sir, which will be followed by a question-and-answer session. Thank you, and over to you, sir.
Good evening, everyone. I extend a warm welcome to all of you to the RVNL's quarter 1 financial year 2026/'27 earnings call. It is my pleasure to have you with us as we share our performance and key developments for the quarter. India infrastructure sector is witnessing strong growth, driven by sustained government investment, modernization, multi-model connectivity and the transition towards green mobility, creating significant opportunities for RVNL. The company remains committed to supporting the nation's infrastructure vision through high-quality, sustainable projects while diversifying its order book across transmission, road and highways, ports and harbors, metros, solar energy and overseas market. This diversified portfolio enhances RVNL resilience, expands growth opportunities and position of the company for sustained long-term value creation. The first quarter of financial year '27 has commenced on a positive and steady note for RVNL with the company remaining firmly focused on sustaining operational momentum and advancing its key projects. Our fundamentals remain robust, supported by early order group, a strong project pipeline and continued focus on operational efficiency. At the same time, we are actively pursuing new business opportunities across the infrastructure sector, with the government's continued focus on railway and infrastructure development, we see significant opportunities add in real estate, port and hydro, highways and sustainable infrastructure. We remain confident that the execution will gather further momentum in the coming quarters, and that RVNL is well positioned to sustain its growth trajectory and create long-term value for all stakeholders. The company is targeting work orders of around INR 20,000 crores during this year in addition to the existing order book, out of which approximately INR 5,000 crores has already been received during quarter 1. Further, the company expects its top line to grow by around 15%, while the bottom line is projected to increase by approximately 15% to 20%, reflecting continued business momentum and a positive growth outlook. I'm pleased to share that our order book continues to remain strong and diversified, providing healthy multiyear execution visibility for the company. During the quarter ended April to June 2026, the order inflow stood at INR 5,417 crores. As on June 30, 2026, the company's total order book stood at an impressive INR 93,492 crores. Order book is primarily driven by railways with INR 58,000 crores, followed by SNT at INR 12,000 crores, ports, roads and highways at INR 3,651 crores, Metros at INR 5,700 crores, power and transmission at INR 4,000 crores and hydro and irrigation projects at INR 1,626 crores. The growth and movement in the order book was supported by new railway and multi-sector infrastructure works awarded to RVNL. Steady execution, leading to revenue recognition and our disciplined margin focus, selective bidding strategy. The strong and well-balanced order book positions the company confidently for sustained growth in the coming years. Company also demonstrated consistent execution pace in quarter 1 of financial year 2027, achieving healthy year-on-year revenue expansion with stand-alone turnover at INR 4,300 crores, higher by 9.62% year-on-year, reflecting steady execution momentum and improved project activity during the quarter. On a consolidated basis, turnover stood at INR 4,321 crores, which is higher by 10.55% year-on-year quarter 1 financial year 2026 to Q1 FY '27, demonstrating sustained project delivery and solid core execution stands. Profitability also improved on a year-on-year basis. Standalone EBITDA stood at INR 171 crores as compared to INR 81 crores in quarter 1 financial year 2026, which is higher by almost 110% on a year-to-year basis while EBITDA margin also improved to 3.99% from 2.08% in quarter 1 financial year 2026. As a result, PAT stood at INR 155 crores, which is higher by 21.7% on a year-to-year basis. Our stand-alone earnings for sales share for the quarter stood at INR 0.75, higher by 22.95% year-on-year. Consolidated performance followed a similar trend. Consolidated EBITDA stood at INR 190 crores as compared to INR 64.91 crores in quarter 1, '26. Consolidated EBITDA margin stood at 4.41% as compared to 1.66% in quarter 1 financial year '26, while PAT stood at INR 159.2 crores, higher by 18.73% year-on-year. Overall, the quarterly results highlight robust execution and good revenue visibility for the company. Margins, while showing improvement over quarter 1 financial year '27, remain an important area of focus that we will keep tracking closely moving forward. The bidding works have also contributed 31.51% to the total revenue from operation, showing an increase of 16.63% from the previous years. Now I would like to highlight about some important projects carried out by RVNL. BharatNet project was awarded by Bharat Sanchar Limited is a INR 13,000 crore initiative to provide high-speed broadband connectivity in rural and remote areas through 82,000 kilometers of OFC infrastructure under the DBM model. Rail Vikas Nigam Limited has made significant progress in project execution with work now progressing at a good pace across various locations and we are expecting good revenue and profit margins in this year. Vande Bharat sleeper transit is also a flagship program of railways where INR 14,400 crore project with 35 BS maintenance arrangement is being executed by [indiscernible] Railway Solution Limited, [indiscernible] of RVNL. The project is progressing at a steady pace. First prototype [indiscernible] is targeted for launch in December 2026. SPV has also received the Bronze A design award 2026 recently for excellence in mobility and transportation design. Rishikesh [indiscernible] Rail Project is also a project of national importance in Uttarakand, being developed at a cost of INR 37,000 crores. The 125-kilometer project has achieved 78% overall progress with around 97% tunnel excavation completed. Target for completion by December 2029, the project will improve access to the Himalayan region, support the Chardham Pilgrims corridor, strengthen border connectivity, boost tourism and local economy and significantly reduce travel time in the region. Performance of our JVs and subsidiaries remain encouraging during first quarter with subsidiaries contributing INR 126 crores to the consolidated revenue and INR 12.70 crores to profit after tax, while the company's share of profit from joint ventures and associates stood at INR 6.16 crore. Additionally, dividend income received from JVs and subsidiaries stood at INR 12.07 crores during quarter 1, which contributed positively to the company's consolidated profitability. During the quarter, employee productivity also showed improvement with revenue from operations per employee increasing from INR 4.29 crores to INR 4.97 crores on a quarter-on-quarter basis. This growth reflects enhanced operational efficiency and better utilization of human resources. In conclusion, RVNL remains fully committed to disciplined execution and steady operational performance backed by a strong and diversified order book as weather condition improves over the coming months, our priority will be to pick up execution speed, maintain margin discipline and convert our healthy pipeline of L1 positions and LOAs into active projects. We also continue to explore fresh opportunities in broader infrastructure segments and international markets. With long-term national infrastructure growth on our side, RVNL is well placed to deliver sustainable value in the quarters ahead. On behalf of the management team, I thank you all for your continued trust, guidance and support. Thank you.
[Operator Instructions] First question comes from the line of Mr. Vishal Periwal from PL Capital.
Congratulations on a good set of results and also your initial commentary was quite detailed. I mean it provided a lot of perspective in terms of like what RVNL is doing. So -- and just to continue, sir, what you've shared with the bone. So what could be the L1 size of orders that we have with us right now?
Thank you, Vishal. Our target for business development or increasing the order book is almost INR 20,000 crores to INR 25,000 crores for a year for this year, out of which already INR 5,500 crores have been interested to us. And we are trying in all the sectors. Right now, we are focusing heavily on core sector hydros and highways. So these are the 3 sectors and plus green energy also. These are the 4 sectors we are focusing and expecting good orders in coming quarter.
Okay, sir. Okay. And sir, I think there has been a bit of market concern around -- because inflation has been there and -- so in our order book of this INR 90,000 odd crore plus, what could be a fixed price contract that we are executing, maybe share of it?
It is almost 40%. 42% to be precise, is the railway work, which has been awarded on a management fee basis. And we are also trying with other state government and PSUs to get the work on nomination basis for a PMC fee. And we have already got almost INR 6,500 crores works from a PSU called NMDC. Another our discussions are going on with other PSUs also. So we are hopeful that we are getting works on a fixed margin also. Parallelly, our bidding works where were margins are slightly lower are also going on. But our focus is that we get worse on good margin. and by increasing or optimization of our operational efficiency, we expect that our margins will also improve in the bidding works.
Okay. And any impact from inflation are we seeing for our orders that we have, particularly, say, for Bharat Net?
Generally -- Vishal, generally, all the contracts are covered by price variation, which generally covers the price inflation. So I think it does not have a very big impact, though, some impact is always there.
And sir -- and in the BharatNet, particularly, I think you did mention INR 13,000 crores worth of order that we have. In this, how has been the experience what we have executed. Any color that can be shared and around -- I mean, I think it's a fixed price contract, right, sir?
Vishal, initially, we really face future hinges.
Hello?
Can you hear now?
Yes, sir, you're audible now.
So in should I repeat?
Yes, sir. Sorry, sir, I missed on that.
Yes. For BharatNet, initially, there were some challenges. We faced some problem in execution also. But now the situation is quite better. It has improved. Work is going on in full swing in UP West and UP East also payment issues are being deliberated with BSNL and are being resolved. Some payments have been received by us and other payments are in pipeline. So we are hopeful that this year in the remaining quarters, we'll get good revenue from this work also.
We have the next question from the line of Ashutosh from Sintrom Broking.
So what percentage of our current order book is already mobilized and [indiscernible] active execution versus projects awaiting approvals, land availability of [indiscernible]?
Your voice is not very clear.
What percentage of our current order book is already mobilized and under active execution versus projects awaiting approvals, land availability or financial closure?
No, our total order book, which is remaining is INR 93,000 and works which are in progress is about almost INR 40,000 crores.
Okay. And can you also provide details on how much CapEx we have incurred till now. Our revenue recognization, and expected completion time line for BharatNet, Vande Bharat sleeper train and others.
BharatNet project is in 2 parts. First is the implementation of the infrastructure at site. The time line is 3 years. There are certain issues at the ground and which are being sorted out and this dot and fiber is being provided. So this will take another 6 to 8 months, it will be extended. The second part is for maintenance for the next 10 years. So whatever is being implemented there and handed over, that is automatically going to the maintenance period. As far as the cost is concerned, most of the items which are being used, hardware that was already -- the cost was finalized and the tender order issued before this crisis. And so we are getting the material at the previous cost at present also.
Ashutosh, you asked about the Vande Bharat. Vande Bharat is also having components. One is the delivery of the 120 sets of the Vande Bharat, which is likely to start from December of this year, the first prototype is likely to roll out in December. And then after in 5 years, the complete 120 sets are delivered. There after, the contract with the Indian railways involves maintenance of these supplied rolling stocks for 35 years in different parts of the country. So it is a very long-term contract, which we think is likely to give good revenue to RVNL with positive margins.
Okay, sir, sir. And you have given a guidance of 15%, 20% FY '27 revenue growth. So do you maintain this guidance for Q1? And what gives you confidence in achieving it?
Yes, definitely, as I said in my opening speech also, we are looking for a was 15% in our top line and 15% to 20% in the bottom line. In quarter 1, we have achieved 19% year-to-year growth with our bottom line. So we are very much hopeful that in coming quarters, we will be able to maintain this momentum.
We have the next question from the line of Priyank Shah from Intec.
Sir, in your opening remarks, you highlighted that you're also exploring the international markets. So could you elaborate on that plan with regard to the overall strategy? And what are the key markets or geographies you are currently targeting? And if you can also help us with the opportunity size when it comes to the overall international?
RVNL is focused in many parts of the world, and our primary focus is in Central Asia, Middle East and Eastern European countries -- where -- and Southeast Asia also. We are already in process of bidding in Africa also. And we are in process of bidding in all these areas, and there are -- we have submitted bids in part of Africa for power transmission line for railway projects, road projects. We have submitted bids in Nepal also for hydropower projects. We are in touch for submitting the bids -- we have already submitted the expression of interest part occurring metro projects in Israel, [indiscernible] Metro. And in Eastern European countries also a lot of opportunities are coming in were in form of roads and high railways, where a lot of reconstruction work for railway sector is going on. So we have identified some bids in Georgia and Serbia. So our focus is basically in the railways, metro, highways or power transmission in these areas.
[Operator Instructions] The next question comes from the line of Sunil [indiscernible] from Choice Limited.
The contribution of bidding projects has been increasing steadily and now forms a meaningful share of revenue. So could you share the revenue mix between nomination projects and competition bidding projects for Q1 FY '27. And how do you expect this next to involve over our next 2 to 3 years?
No, our order book is mixed. 40% of our order book is from the railway management works, which have been assigned to us. 20% of the rail work we have taken from bidding. And others are from the either CMC work from other PSU or bidding works in other sectors. If you see our quarter 1 results, almost 60% of the revenue top line is from the management work, which is almost 6% is from bedding works from management and remaining is from the bidding of PMC.
Okay. Sir, the next question on the current order book and the pace of execution we have right now. So considering this, how do you see RVNL's book-to-bill ratio on next 2 to 3 years or I can say for short term to long term tenure?
We are hoping that in next 3 years, our order book will be equally divided 50%, 50% between railway management works and bidding works. So that is how the order book will evolve in the next 3 years. As you have been briefed that we are focusing more on the overseas works, and as already explained that we are bidding for work in Georgia, we are bidding for works in Africa, we have bid for Israel Metro. So we are expecting a good order from these overseas works. So that will increase the non-railway portion. And railway was already with us, almost INR 40,000 crores of work to be executed by us in the next 3 years. So that way that -- those works will always go panel. And we are hoping that in our top line, it soon, it will be 50%, 50% for next 2 to 3 years.
Okay. Noted, sir. And sir, as the business shifts towards the competitive bidding, so just want to know like what's the management thinking about the overall profitability, ROE, ROCE going forward. Or you can highlight something on -- or you can throw some lights on margins, which we are expecting going forward?
For the last 2 quarters, we are focusing on the works which gave us better margins, and those margins are more than 5% to 6% for the bedding works. And for management, it is from 8% to 10%. For PMC work, which we have got from PSU is almost 7%. And we are trying with other state government and PSUs to get the same PMC margins, fixed margins. For bidding, I will again repeat that our margins will vary from 5% to 6% for the works in India. But for the overseas, we are expecting margins of 15% to 20%, which we are trying in Georgia, in Africa and other countries.
Sir, the last question on to understand the industry. So which are the major internal and external risk for the company as of now or companies facing which affected our procurement time line or project cost or overall project execution or business. Can you throw some light over there?
Definitely, as you know, the present geopolitical situation is a challenge that we faced during quarter 1 also. And if the similar situation persists, this is a big challenge for us. And definitely, we are facing some challenge of labor availability from the market. Labor is not available for work. So we have to work extra -- we have to make extra efforts to get the labor for execution of our works. Payment from the client is also a challenge, but we are trying to get the payments from them. Regular follow-up is being done. So these are the few challenges which we are facing. But we are hopeful, even with these challenges, we will be able to achieve the targets, which we have fixed for ourselves.
We have the next question from the line of Abhishek Leekha from [indiscernible].
Congratulations for stable to good set of numbers. My question is like, since you're trying to diversify to Middle East and Israel and all those basically areas are geopolitically highly active now. How you plan to address the risk part into that?
Abhishek, as you rightly pointed out, the area of Middle East is while are a bit volatile at present. But we understand that the situation is likely to stabilize in coming time. And these areas, they typically yield very good margins for the projects and -- as a country, India has a good projects in all these areas. And we start to get good support from the government side also while excluding the project in those areas. So will not face much of the issues. But certainly, we have been going forward some of the challenges there because when we are taking still on unlisted manpower that area, the payments, they have to be given properly. They have to be ensure properly. So we'll be clear on all these things while excluding projects in these areas.
Okay. it is done copper assessment is done before coating to these rigs is identified and accordingly mitigation measures or premium has been considered.
Okay. Okay. So that's good to know. And pardon me if that has been addressed earlier -- had been answered earlier. ROE, what kind of vision that we have over the next 3 years?
We are expecting EBITDA of 5% to 7%...
ROE like -- ROE vision for RVNL as a whole in next 3 years.
Almost 12% to 13%.
The next question to the line of [indiscernible], an individual Investor.
So my first question is regarding the larger projects that are underway, Vande Bharat and BharatNet, et cetera. So what would be the funding requirement and what would be our pipeline? How much would be internal approvals would we be looking at debt as well.
Presently, we are not looking for any debt from other sources. We are able to maintain from our internal resources only. But we have our working arrangement with some bank for working capital, if required. So in the next 2, 3 quarters, we are not looking for any assistance on part of debt.
And what would be the rate on the bank lines that we have already secured?
Around 5.5% to 5.9%. So we have not taken any debt until now, but we have like kind of arrangement with them. If required, most probably, it will be required in BharatNet, we may take it, and that will be at 5.5% to 5.9%. But presently, we are able to manage from our internal cash.
Okay. That's great, sir. And my last question is regarding the dividend policy, sir. So should we expect dividend growth to track the PAT? Or could the ratio move going ahead?
We generally follow [indiscernible] guidelines, which is 30% of the PAT or 4% of the net worth, whichever is higher. So we'll give that dividend.
[Operator Instructions] We have the next question from the line of Mayur [indiscernible], an individual investor.
Sir, my question on the following recognition of losses on certain contracts in FY '26. So can you confirm whether all the major provisioning has now been completed? Or do we have any additional contracts remain under review?
We have already provisioned for the [indiscernible] project, and we are not anticipating any further provision of the loans.
Okay. Okay. And the second question I have on receivables from the Ministry of Railways, which has been increased marginally during FY '26. So what is the current outstanding amount for the same?
This is actually railway receivable or outstanding is a dynamic process. And presently, we are -- our outstanding with railways is almost INR 2,500 crores, and we keep on receiving the payment on a monthly basis. We raise our bill to them and within 30 days, the payment is received. So that is a normal and dynamic process, and we are making more effort to ensure that our cash flow is maintained and payment is received well on time with railways. So our correspondence and interaction with railways is regular.
That was the last question for the day. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using Door Sabha's conference call service. You may disconnect your lines now. Thank you, and have a pleasant day.
Thank you.
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