RVNL Share Price Falls After Weak Q1 FY26 Results – Revenue, Margins, and Profit Decline
Rail Vikas Nigam Limited (RVNL), the state-run railway PSU, saw its shares tumble over 5% on August 12, 2025, after reporting a sharp deterioration in its quarterly earnings. The stock closed at ₹323.15, down ₹19.40 or 5.65% from its previous close, marking one of the steepest single-day falls in recent months. The decline also pushed RVNL further away from its 52-week high of ₹619.50, with the stock now nearly halved from peak levels.
Q1 FY26 Earnings: Revenue and Margins Under Pressure
According to the company's Q1 FY26 results, RVNL's revenue fell 4.1% year-on-year to ₹3,908 crore, compared to ₹4,073.80 crore in the same quarter last year. More concerning was the EBITDA decline of 71% to just ₹52 crore, leading to an EBITDA margin crash from 4.5% to only 1.4%. This represents a fall of over 300 basis points, signaling operational challenges and cost pressures.
The net profit dropped 40% to ₹134 crore from ₹224 crore in the previous year’s quarter. Sequentially, the numbers were even weaker, with revenue down 35%, profitability plunging 71%, and margins contracting by over 500 basis points compared to Q4 FY25. EBITDA on a quarter-on-quarter basis saw an alarming 90% drop.
Key Q1 FY26 Consolidated Financials
| Particulars | Jun 2024 (Q1 FY25) | Jun 2025 (Q1 FY26) | YoY Change |
|---|---|---|---|
| Revenue | ₹4,073.80 Cr | ₹3,908 Cr | -4.1% |
| EBITDA | ₹180 Cr (approx.) | ₹52 Cr | -71% |
| EBITDA Margin | 4.5% | 1.4% | -300 bps |
| Net Profit | ₹224 Cr | ₹134 Cr | -40% |
Stock Market Reaction
On the results day, RVNL shares opened lower and extended losses throughout the session, hitting an intraday low before settling at ₹323.15. The heavy fall came amid a surge in trading volumes, indicating strong selling pressure from investors. The stock was also among the top losers in the Nifty Midcap 150 index.
Market experts attribute the decline to the steep fall in margins, which suggests rising input costs and possible execution delays in key railway infrastructure projects. This performance has shifted market sentiment towards a bearish outlook for the short term.
Annual Performance Snapshot
While the quarterly performance was disappointing, RVNL’s annual performance for FY25 still shows strong numbers compared to its earlier years, although there has been a decline from FY24.
| Year | Revenue (₹ Cr) | Net Profit (₹ Cr) | EPS (₹) | BVPS (₹) | ROE (%) | Debt-to-Equity |
|---|---|---|---|---|---|---|
| 2021 | 15,403.76 | 922.85 | 4.42 | 26.70 | 16.56 | 1.02 |
| 2022 | 19,381.71 | 1,079.17 | 5.67 | 30.68 | 18.48 | 1.03 |
| 2023 | 20,281.57 | 1,261.95 | 6.81 | 35.13 | 19.39 | 0.87 |
| 2024 | 21,889.23 | 1,574.47 | 7.55 | 41.95 | 18.00 | 0.68 |
| 2025 | 19,923.01 | 1,186.11 | 6.15 | 45.90 | 13.38 | 0.56 |
Dividend Updates
Despite the weak Q1 results, RVNL has announced a final dividend of ₹1.72 per share (17.2%) for FY25, with an effective date of August 21, 2025. This follows last year’s final dividend of ₹2.11 per share (21.1%), which was effective from September 23, 2024. Dividends have been a consistent part of RVNL’s shareholder returns strategy, making it attractive for income-focused investors even in volatile market conditions.
Reasons Behind Weak Q1 Performance
Several factors contributed to RVNL’s Q1 FY26 underperformance:
- Execution delays in certain railway infrastructure projects.
- Higher raw material and labour costs, impacting margins.
- Lower order inflows in the early months of FY26 compared to previous years.
- Seasonal slowdown in railway project activity due to monsoon-related disruptions.
Analyst Views and Outlook
Market analysts currently maintain a cautious stance on RVNL, citing the weak margin profile and declining earnings. Moneycontrol’s sentiment tracker indicates a very bearish outlook as of August 12, 2025. However, long-term investors may still find value if the company manages to secure large-scale orders and improve execution efficiency.
Given RVNL’s strong order book from the Indian Railways and ongoing government focus on infrastructure development, there is potential for recovery in the coming quarters. That said, the company will need to address operational inefficiencies and control costs to restore investor confidence.
RVNL Share Price Trend
RVNL’s share price has been on a downtrend over the past month, losing over 15%. The stock’s sharp fall from its 52-week high of ₹619.50 is a reminder of the volatility in midcap PSU stocks. Technical charts indicate strong resistance around ₹350, with immediate support near ₹310. A break below ₹310 could lead to further downside, while a bounce above ₹350 may trigger short-term recovery.
Conclusion
RVNL’s Q1 FY26 results highlight the challenges the company faces in maintaining profitability amid rising costs and execution delays. While the stock’s decline has made valuations more reasonable, near-term headwinds remain. Long-term investors may prefer to wait for signs of margin improvement before making fresh entries.
For those already holding RVNL shares, monitoring upcoming quarters, order book updates, and government railway project allocations will be crucial in assessing the stock’s recovery potential.
Join WhatsApp Group
