Rail Vikas Nigam (RVNL IN) – Q1FY27 Result Update – Recovery underway; Valuation is full – SELL
Published on 13 Aug 2026
RVNL delivered an improving Q1FY27, with consolidated revenue of INR 43.2bn (+10.6% YoY) and EBITDA margin recovering to 4.41% from a depressed 1.7% in Q1FY26. Order book stood at INR 934.9bn as on 30 June 2026 (~4.4x TTM consolidated revenue), with Q1 inflow of INR 54.2bn against a full-year target of INR 200–250bn. Importantly, ~INR 400bn of order book is under active execution, with the balance awaiting approvals, land or financial closure. Management retained FY27 guidance of ~15% revenue growth and 15–20% PAT growth and guided to a 5-7% medium-term EBITDA margin with an ROE ambition of ~12–13%. Management's stated intent to move the book to a 50:50 nomination-bidding mix over three years structurally caps margins unless the higher-margin overseas pipeline (guided at 15–20%) converts meaningfully. We have factored 15% revenue CAGR over FY26-28E but stock trades at rich valuation of 41x FY28E EPS. We maintain SELL with a unchanged SOTP-based target price of INR 165/share.
