Shares of Rail Vikas Nigam Ltd (RVNL) plunged in early trade on Friday after the high-flying railway stock’s net profit for the second quarter fell short of street expectations, triggering the sell-off.
What Happened: RVNL reported a 27.12% decline in consolidated net profit to ₹286.89 crore in the September quarter. The railway major’s revenue fell 1.2% to ₹4,854.95 crore. The numbers missed the street’s estimates for the company.
Analysts expected the company’s net profit to come between ₹347.9 crore and ₹355.8 crore and revenue between ₹4,816 crore and ₹5,160 crore. Analysts anticipated a decline in revenue and profit for the company due to lower project executions and slower growth in the company's core segments.
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EBITDA dropped 9% year on year to ₹271.5 crore, while margins tumbled 40 basis points to 5.6% for the quarter. This contraction in margins is likely due to higher operational costs and project delays, which have impacted profitability.
Price Action: RVNL shares were down 6.14% to ₹448.5. RVNL’s shares have had a strong run in recent days due to the order wins, climbing 148% in the year so far.
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