Budget 2021 Stock with Anil Singhvi – RVNL is a new TURNAROUND story; Bullet Trains to DFC, know why you should buy!

Top Stocks to Buy with Anil Singhvi – In continuation with the top Budget 2021 Stock Picks, Zee Business Senior Research Analyst Varun Dubey brings a stock that is expected to earn high returns. This stock is recommended keeping in mind the Budget 2021 that will be presented on 1 February. See what details he brings to the table in chat with Managing Editor Anil Singhvi.   

Top Stock to Buy – RVNL 

Dubey said that RVNL (Rail Vikas Nigam Limited) is a stock worth a look. Indian Railways is undergoing a massive transformation and the company is ready to capture the growth in this sector. The state-run company has increased its expenditure by almost 44 per cent and this will reflect in its turnover.

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The company’s overall project completion or executions has been going up, he said. The increase seen has been 96 per cent over the previous year and it is expected to remain as high this year.  

The orderbook is worth Rs 82,000 cr. In this year, the company has received orders worth Rs 6000 cr. This is almost equal to its market cap, he further said. Over 56 per cent of the order book is in execution at this stage. Management has said that the growth is expected to be at 30-40 per cent.    

One of its subsidiaries ‘Skill First’ is into skill development and in education space where there are many growth avenues. The balance sheet of the company is also quite strong with Rs 400 cr of free cash. All these things suggest that the stock has the potential to give good returns.

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RVNL में होगी दमदार कमाई

अनिल सिंघवी को क्यों पसंद है RVNL?#BudgetOnZee @AnilSinghvi_ @VarunDubey85 pic.twitter.com/nPsfQXPrVf

— Zee Business (@ZeeBusiness) January 8, 2021

  Triggers for RVNL 

This is the first company to manufacture MEMU coach shell and has set up a plan in Marathwada. This is a big trigger and will help in the rating of the company. The return on equity is 14 per cent against the industry average of 6.4 per cent over the last five years. The dividend yield is around 8 per cent. The stock is available at a PE multiple of 8, so the valuations are cheap. 

Anil Singhvi’s View on RVNL  

The Market Guru said that there were three things which stand out for this stock and will help in its rerating. Valuations are very attractive, so a government company stock is available at a very attractive valuation. The order book is huge which will ensure revenue generation. The biggest trigger is its growth area which will come from dedicated freight corridor (DFC), Singhvi said. The RVNL is also expected to get significant orders from bullet trains. The third trigger is the Budget 2021.  

At 10:15 am, the stocks of RVNL were trading at Rs 32.45, on NSE, up by almost 11 per cent.