Director (Operations), Rail Vikas Nigam Limited
RVNL's Growth Outlook For H2FY25: On Track To Hit ₹22K Cr Revenue Target? | Mritunjay Pratap Singh
RVNL's Growth Outlook For H2FY25: On Track To Hit ₹22K Cr Revenue Target? | Mritunjay Pratap Singh
RVNL growth plans for the year 2025. The video discusses the growth and the Q3 outlook. What the management is expecting from Q3 earnings?
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Transcript (15 segments)
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Interviewer0:00
Time now to welcome on set Mritunjay Singh, the Director at RVNL, to talk to us about their order inflow, the situation so far. Hi sir, good morning, good to be speaking with you. Well, off late we have been reading about a lot more orders coming in because in between there was a bit of a lull due to elections and other macro factors. Has the order pipeline picked up and you're expecting a further acceleration into Q4?
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Mritunjay Singh0:22
Good morning from my side. Thank you very much for inviting me on ET. As you said, RVNL is quite upbeat on our orders and in the current year we have received orders roughly of 16,000 crores and our success rate is quite good. We have achieved a 61% success rate in our financially qualified bids and we have won orders across many sectors, be it in railways, metros, reamping distribution systems, signaling works, and one of the major sectors is in BharatNet works in UP East and West Circle, which is going to give a lot of revenue visibility to RVNL in coming quarters.
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Interviewer1:13
Great to hear that. So tell me, what is the guided revenue now? Because earlier you had talked about 22,000 crores as of FY25 close. Does that stay or do you think you can manage to beat that as well?
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Mritunjay Singh1:28
No, we are quite sure to beat our revenue targets. Quarter 1 and Quarter 2 were a bit sluggish due to the prevailing economic conditions, but revenue growth has accelerated in Quarter 3 and the coming Quarter 4 is likely to have significant growth. We expect to have the revenue targets achieved for the current financial year.
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Interviewer2:01
Interesting. So tell me, what's in the pipeline right now? Where is it that you see bulk of your orders coming in from? What's the order pipeline looking like?
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Mritunjay Singh2:10
Our orders — we are looking for orders not only in the domestic sector but from abroad also. In the domestic sector, most of our orders have come in the field of railway multi-tracking projects, construction of bridges, and electrification as significant components. Signaling works have also contributed to a lot of our order growth. One of the major orders is in the field of BharatNet, which is for laying the digital infrastructure network in the heartland of the country. We are also expecting some orders from the Middle East where we have bid, and we are moving towards new projects in the solar sector, Middle East, and railway projects in Peru also.
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Interviewer3:12
Okay, quite interesting to hear that. Let's talk about what's happening when it comes to the metro and rather railway electrification segments of yours. What's the visibility there that you see on how these segments are going to perform and whether or not they can be a significant revenue contribution?
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Mritunjay Singh3:33
As you said, Railways has embarked on a major goal of converting its network to 25 KV electrification to carry the 3,000 metric ton target of the freight traffic, which requires higher current and not much of the failures and higher carrying capacity. Due to which, a lot of bids are coming in the field of electrification, and RVNL, due to its inherent strength, hopes to win a significant portion of these contracts. In the field of signaling also, a lot of works in automatic signaling — Railways is embarking to enhance its safety performance, and also KAVACH is going to be introduced on major sectors. We are quite hopeful to gain significant orders from these sectors in the coming years.
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Interviewer4:39
Good to hear that. So where is it that, you know, it's going to lead your EBITDA margin trajectory in the coming few quarters?
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Mritunjay Singh4:48
EBITDA margin trajectory — we hope to not only retain last year's performance in margins but also it's going to improve. The improvement in margins is due to our performance where not only from the traditional railway projects but projects we have won through bidding also.
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Interviewer5:20
Right. You know, before we let you go, sir, we also want to talk about the fact that there have been some delays across some metro projects as well and a slowdown in execution across geographies. Help us understand how the second half is going to be different and what really do you foresee for both Q3 as well as Q4?
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Mritunjay Singh5:39
As you said, the first two quarters there were some delays maybe here and there on some of the sectors. In Q1, due to elections, the movement of labor etc. was affected, and in Q2, due to extraordinary rains in the country, there were some delays in the metro sector. But it has improved in Q3 and we expect a significant improvement in Q4. Wherever we are executing metro in seven cities, we hope to not only improve our performance as compared to last year but you'll see significant revenue growth from these sectors.
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Interviewer6:34
Okay, Mr. Singh, thank you so much for your time today. Glad that you could take time out and speak with us.
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Mritunjay Singh6:42
Thank you very much.
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Narrator6:45
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