RVNL shares defy market correction, rise 9%; here's why 

Shares of Rail Vikas Nigam Ltd (RVNL) surged 9% amid a correction in the market today after the railway firm said it has inked a Memorandum of Understanding (MoU) with Israeli firm United Construction Limited. Another factor that  led to positive sentiment around the stock was that the arbitration tribunal has ruled in favour of the Krishnapatnam Railway Company Ltd., a special purpose vehicle initiated by the Rail Vikas Nigam, passing an award of Rs 584.22 crore.

This award was to settle the dispute between Krishnapatnam Railway Company and the Ministry of Railways. KRCL had a 49.76% in the Joint Venture.

RVNL shares gained 8.77% intra day to Rs 637.80 in the current session on BSE. Later, the stock ended 4.71% higher at Rs 631.95. The railway stock snapped its four-day losing streak today. A total of 84.88 lakh shares of RVNL changed hands amounting to a turnover of Rs 515.20 crore. Market cap of RVNL climbed to Rs 1.28 lakh crore on BSE. 

RVNL shares have a one-year beta of 1.4, indicating high volatility during the period.      

The stock fell to a 52-week low of Rs 119.20 on July 20, 2023 and hit a record high of Rs 647 on July 15, 2024. 

In terms of technicals, the relative strength index (RSI) of RVNL stands at 71, signaling it's trading in the overbought zone. Rail Vikas Nigam shares are trading higher than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.

"RVNL has signed Memorandum of Understanding (MoU) with M/s United Construction Limited, Israel to co-operate with each other to get projects in the field of Railways, MRTS, Tunnels, Roads (Highways & Expressways), Bridges, Building Works, Airports, Ports, Irrigation, Power Transmission and Distribution Sector, Solar Sector, Wind Sector in Israel," said RVNL in a commuincation  to bourses.

This is the second instance of positive news for the stock this week. 

On July 15, RVNL said it received letter of acceptance (LoA) from East Coast Railway for an order worth Rs 160.08 crore. 

"RVNL has received Letter of Acceptance from East Coast Railway for provision of Automatic Block Signaling system with dual MSDAC and alteration in existing El/Pl/RRI stations in the section of Jakhapura-Nergundi, Khurda Road-Bhusundpur & Bhusundpur-Golanthra over Khurda Road Division of East Coast Railway," the rail PSU stated.

RVNL is an executing arm of Indian Railways and works for and on behalf of the ministry for projects assigned to it for execution. It works on a turnkey basis and undertakes the full cycle of project development from conceptualisation to commissioning including stages of design, preparation of estimates, calling and award of contracts, project and contract management.