Today , am going to mention a stock which am reviewing since 3 months now and finally decided to start accumulation on this stock .
Recommendation : Buy / Horizon : 3 to 5 Yrs / Target : 100%
Stock Name : RVNL ( Rail Vikas Nigam Ltd)
Rail Vikas Nigam is engaged in creating vital rail infrastructure and provide vital port linkage including the corridors connecting the port of Hinterlands. We expect this company to play a vital role in future , and who knows the govt might divest stake in this for private players in coming years!
Industry Analysis :
| Competitive Rivalry | LOW | Low , Less Govt backed players in supporting Rail Infra. |
| Supplier Power | HIGH | Concentrated industry with few players |
| Buyer Power | LOW | Public Projects hence not directly applicable. |
| Threat of Substitution. | LOW | Low , requires specialization |
| Threat of New Entry | LOW | Low , requires specialization , government clearance. |
| Fundamentals | Share holding Pattern | ||
| In Crores | Government | 88% | |
| Market Cap | 4,000 | FII | 0.40% |
| Fy-19/20 Total Sales | 14,000 | DII | 2.28% |
| Operating Profit | 662 | Public | 9.4800% |
| 5 Year Avg Div Payout | 25% | ||
| Avg ROCE in 3 years | 10% to 12% | ||
| Avg ROE in 3 years | 14% to 17% |
Few Concerns to note on the stock
–Contingent liabilities of Rs.44111.27 Cr.
–Consistent other income appearances in the P/L sheet
–1 year average price change is negligible
–Low ROCE / ROE then few other players