December is usually the craziest of times for Wedding Photographers & Cinematographers. It was no different for us at Monks In Happiness too. But there was a special enthusiasm this time around, in our 5th year of existence, we were all set to travel to KERALA for our first ever wedding shoot. And the icing on the cake was the venue -  TAJ BEKAL ( Bekal is a small town on the borders of Karnataka & Kerala). I opted for the train journey along with some of my team members. It was an eventful one :) We were slated to travel from Panvel to Mangalore and a small road trip for the final destination. That afternoon, the train was on time and once the journey started, the craziness unraveled. It took an unplanned long break at Roha ( which was the first station after Panvel), no it wasn't a 10-15 mins break, it was a 4 hrs hiatus. The same thing happened as we headed to the next stop -Khed. Long story short, we reached Mangalore the next day at 1 PM, as opposed to its ETA of 5 AM. Yes, 8 hrs late !!

No, this blog isn't about my travel adversities, read on to discover this unique PSU, that promises to turn this problem upside down...you may ask how??

For the uninitiated, the problem that I faced on my Bekal trip is a classic Indian Railways problem - Where most of the Railway stations have single lines, which means many times a passenger or an express train will have to wait in a station for a super-fast train to pass. India has so many problems, this is just another one, so where is the opportunity? Well, this is where RVNL comes in, the torchbearer of the Ministry of Railways when it comes to "DOUBLING of Railway Lines in India".

The Beginning:

15th Aug 2002 during the Independence Day speech Shri Atal Bihari Bajpai announced to the world from the Red Fort, that RVNL is being set up to tap onto this massive opportunity of modernizing the Railway infrastructure  ( which could have been easily allocated to foreign infrastructure companies). Fast forward 20 Yrs. in 2021 it's a Mini Ratna company and loads of accolades to flaunt.RVNL now has an order book of 75,000 Cr. This means even if this company doesn't bag any order for the next 4-5 yrs, they are still good.
 Game-Changing Decade?

When a company has an order-book of 75,000 Cr. , its music to the ears. But what are these orders for? Let's explore:

Indian Railways is the 4th largest railways in the world with 68,155 km of railway lines, of that only 40,000 km is electrified. This is another avenue for RVNL - Electrification. 

India presently doesn't have a single High-Speed Rail (HSR), the fastest train that India presently has is the GATIMAAN Express, which has a high speed of 130 km/hr. , however recently the Govt. of India has announced the first HSR project between Ahmedabad & Mumbai. No points for guessing, which company is getting this done. In fact, RVNL has subcontracted it to L&T and they are the final executioners.

Next, the Dedicated Freight Corridor ( DFC's ) will be changing the India logistics . 2 DFC's have already been commissioned:

1. 351 km New Bhaupur- New Kharjua section of the Eastern DFC & 2. 306 km Rewari - Madar Section of the Western DFC.

All the rest of the DFC's are expected to be ready by June 22'. The assignment will cost 82,000 Cr and will make an efficient India transporter of freight. Again a scope for RVNL to lap up this opportunity.

Lastly, Atmanirbhar play is also helping RVNL - Port Connectivity is a major agenda for the Govt. of India, RVNL will see a big allocation of budget to connect the port cities.

So you can see there are multiple drivers that suggest it's a decade for RVNL.

 Valuations & Dividend:

The stock is presently trading at Rs.31.80/share. The market cap of RVNL  is still -  6630Cr. , hence it's a smallcap company. In April 2021, it announced an Interim Dividend of Rs.1.14/share, the dividend yield stands at 3.58%, not to forget, investors can expect a final dividend also. Thus it's already giving investors better returns than an FD.

Peter Lynch & Investor's Edge:

Peter Lynch is a legend. He was Fidelity International's Magellan Fund's Manager for 13 years and in those 13 years, he took the fund from $18Mn to $14Bn. Compounding for 13 years at almost 30%/ year. His one quote struck me the most and it has been one of the bedrock of my investment journey:

“Your investor's edge is not something you get from Wall Street experts. It's something you already have. You can outperform the experts if you use your edge by investing in companies or industries you already understand.”

In 2019 after days of deliberation, I realized I have always been a railways boy. My father retired from Railways, my education was in a Railways school, have travelled extensively in Railways,one of my uncles was a Station Master and I grew up in a Railway colony - basically, Railways was is in my blood! Understanding Railways was my Investor's Edge. So when I came across RVNL and understood the potential it had, I didn't even think twice and invested in this Mini Ratna. The stock was available at Rs.10/share during the March 2020 Crash. It's now trading around the levels: Rs.30/ share. In FY20, RVNL did 750+ km. of doubling: creating 2 railways lines, on a route, so that no trains have to be stopped for letting pass another one. I am hoping next time we go back to TAJ BEKAL for a shoot, our train journey will take lesser time... Signing off for this week, see you next week.

P.S: I personally hold RVNL stock, and hence I may be biased. This blog shouldn't be treated as a recommendation to BUY the stock. Kindly do your due diligence before investing in any stocks.

#MadAboutStocks