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The sharp selloff in the stock prices came after RVNL and Ircon International announced their September quarter results after market hours on Thursday.
RVNL’s net profit for the second quarter fell by 27% from last year’s to ₹287 crore.
Revenue for the quarter stood at ₹4,855 crore, which is a decline of 1.2% from the ₹4,914.3 crore it reported during the year-ago quarter.
RVNL’s Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) fell 9% from last year to ₹271.5 crore, while EBITDA margin narrowed to 5.6% from 6% last year.
For the September quarter, Ircon International reported a 18% decline in net profit to ₹206 crore, compared to ₹250.7 crore in the corresponding period last year.
Revenue for the state-run company dropped 19% to ₹2,447.5 crore, compared to ₹3,033.3 crore in the year-ago period.
On the operational front, Ircon’s EBITDA during the quarter under review rose 23.3% to ₹201 crore, compared to ₹263 crore in the year-ago period. Margin increased to 8.2% as against 8.6% in the year-ago period.
Prashanth Tapse of Mehta Equities said that railways stocks continue to be under pressure on the back of lower than expected earnings in Q2.
“Despite growing order books status companies are not able to deliver sustainable earning growth which is a matter of concern to investors. This has led to sell off in the sector stocks as valuations are not matching the earnings growth,” he said.
RVNL has already tripled in value in 2024, hitting a record high of ₹647 on July 15 before correcting 30%. Despite this, the railway PSU stock is up nearly 150% so far in 2024.
IRCON International’s shares are down 42% from the record high of ₹351.65, that they had scaled on July 15 this year.
Shares of RVNL are currently trading 5.11% lower at ₹453.45, while the Ircon stock is currently trading 4.60% lower at ₹205.39.
First Published: Nov 8, 2024 9:53 AM IST
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