RVNL's Stock Call Upgraded to 'Hold' by MarketsMOJO, Showing Strong Long-Term Growth and Institutional Investor Interest

Rail Vikas Nigam (RVNL) has recently caught the attention of investors as its stock call has been upgraded to 'Hold' by MarketsMOJO on April 8, 2024. The company, which operates in the engineering industry and is classified as a largecap, has shown healthy long-term growth with an annual increase of 11.05% in net sales and 23.57% in operating profit. This has led to a bullish trend in the stock, with technical indicators such as MACD, Bollinger Band, KST, and OBV all pointing towards a positive outlook.
One of the reasons for this upgrade is the increasing participation of institutional investors in RVNL. These investors, who hold 8.68% of the company, have better resources and capabilities to analyze the fundamentals of a company compared to retail investors. This has also contributed to the stock's market-beating performance in the long term, with a return of 258.98% in the last year and outperforming the BSE 500 index in the last 3 years, 1 year, and 3 months.

With a market cap of Rs 55,065 crore, RVNL is the second-largest company in the sector, behind Tube Investments, and makes up 15.62% of the entire sector. Its annual sales of Rs 20,895.05 crore account for 19.80% of the industry. However, the company did face some negative results in December 2023, with its inventory turnover ratio and operating profit to interest ratio being the lowest at 203.51 times and 1.79 times, respectively. Its net sales also saw a decline to Rs 4,689.33 crore.

Despite these challenges, RVNL has a very expensive valuation with a 6 enterprise value to capital employed ratio. However, the stock is currently trading at a discount compared to its average historical valuations. While it has generated a high return of 258.98% in the past year, its profits have only increased by 1.1%, resulting in a PEG ratio of 34.4.

Overall, RVNL's stock call upgrade to 'Hold' by MarketsMOJO is a positive sign for the company, with its strong long-term growth and increasing institutional investor interest. However, investors should also consider the company's negative results in December 2023 and its expensive valuation before making any investment decisions.