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Rail Vikas Nigam Ltd. shares tumbled on Tuesday, May 26, after a sharp decline in profitability in the quarter ended March 31, 2026. The stock opened at Rs. 263.95 on the NSE, then fell more than 4% to hit an intraday low of Rs. 261.05.
The fall came after RVNL's Q4 earnings for FY26 were announced on Monday, May 25. The company's margins and net profit declined and investors' concerns about the company's revenue growth dragged the stock lower.
The consolidated revenue from operations for the March quarter was Rs. 6,695.91 crore, as compared to Rs. 6,427.11 crore in the same period last year, marking an increase of 4.18%. Revenue grew sequentially by 42.94%, supported by increased project execution and billing activity in Q3 FY26.
Total income stood at Rs. 6,780.89 crore in Q4 FY26, compared with Rs. 6,614.49 crore in Q4 FY25, marking a 2.52% year-on-year increase. The improvement in revenue did not translate into stronger earnings.
The company's consolidated net profit fell by around 59-60% year-on-year to nearly Rs. 187 crore, from Rs. 455.4 crore in the previous year. Sequentially, profit was lower by around 40%.
RVNL’s EBITDA stood at around Rs. 268.5 crore in Q4 FY26, down 38.4% from Rs. 436.1 crore in Q4 FY25. EBITDA margin fell to 4% from 6.8% in the same period last year. The drop in margins suggests a squeeze from higher costs, such as the cost of materials, employee benefits costs and other financial costs.
The board also suggested a final dividend of Rs. 0.71 per equity share for FY26, which needs approval by the shareholders at the next Annual General Meeting.
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Seema Srivastava, Sr Research Analyst at SMC Global Securities, said, "From a long-term perspective, RVNL is a structurally positive stock as it is still reaping the benefits of India's railway and infrastructure capex cycle.”
“Its diversified infrastructure opportunities and strong order book offer robust growth visibility as the company continues to benefit from strong government spending on railway modernisation, electrification, metro projects and connectivity expansion. But the stock could stay volatile in the short-term as concerns remain about margin pressure, execution delay and inconsistent earnings performance,” Srivastava added.
Those who have a longer-term investment outlook can hold or slowly add on to the stock (3-5 years), she added.
Harish Jujarey, AVP equity research at Prithvi Finmart, said that RVNL has remained in a bearish-to-sideways consolidation phase for more than a year. He says RVNL is trading below its key 50-day and 200-day moving averages. Resistance can be seen at Rs. 280 and Rs. 300. He anticipates that the stock will stay on the downside with a support level of Rs. 250 and recommends refraining from fresh long positions until a reversal is seen.
