RVNL Shares Drop 9% After Weak Q1 Results: Experts Say ‘Buy on Dips’

Rail Vikas Nigam Limited (RVNL) shares have been falling for two straight days due to poor Q1 results in 2024. The share price dropped from ₹566 to ₹515, a nearly 9% decline. Despite this, stock market experts believe the current dip is a good opportunity for long-term investors. The company’s poor performance in the first quarter is being blamed on policy delays during the Lok Sabha elections. However, experts expect RVNL to recover in the next quarter now that the new government is in place. They advise investors to buy RVNL shares whenever there is a 5-7% dip from the current levels.

On Thursday, RVNL shares lost around 5%, opening at ₹538 and hitting a low of ₹515.40, marking a 9% drop from Wednesday’s close of ₹566.

Q1 Results Review

Seema Srivastava, a Research Analyst at SMC Global Securities, explained that the ongoing sell-off in RVNL shares is due to weak Q1 results. The company reported a significant drop in net profit and income. However, as a government-owned railway company, RVNL is expected to bounce back after the formation of the Modi 3.0 government.

Share Price Outlook

Ganesh Dongre, Senior Manager of Technical Research at Anand Rathi, noted that RVNL shares are currently in a downward trend, with a support level at ₹495. If the stock falls below this, it may drop further. He advises current shareholders to set a stop-loss at ₹495 and recommends that new investors wait for the stock to stabilize. For long-term investors with a high-risk tolerance, buying on dips of 5-7% could be a good strategy.

Q1 2024 Results

RVNL reported a 35% drop in consolidated net profit for the first quarter, with earnings of ₹224 crore compared to ₹343 crore in the same quarter last year. Revenue fell by 27%, reaching ₹4,074 crore, down from ₹5,572 crore. EBITDA also dropped 48% year-on-year to ₹189 crore, and margins declined by 180 basis points to 4.5%.