Rail Vikas Nigam Limited (RVNL) posted higher revenue for the quarter ended September 30, 2025 (Q2FY25), reflecting continued execution momentum across its infrastructure projects. However, profitability metrics and cash flow performance signaled growing financial strain during the period.
The company reported a year-on-year increase in revenue, driven by ongoing expansion and electrification projects, but its EBITDA, operating margins, and net profit declined compared to the same quarter last year.
On a quarter-on-quarter basis, RVNL’s financial performance showed improvement, suggesting that operational activity remains steady despite margin compression and rising project costs.
Cash Flow Turns Negative
A major development in the second quarter was the shift in operating cash flow, which turned negative during the first half of FY25.
As of September 30, 2025, RVNL recorded a negative operating cash flow of ₹1,254 crore, compared to ₹1,878 crore positive in March 2025 and ₹1,755 crore positive in the same quarter last year.
The reversal indicates increased working capital requirements and potential delays in receivables, both common challenges in large infrastructure and construction projects. With multiple projects under execution — including railway line doubling, electrification, and bridge construction — the company’s cash flow profile remains sensitive to project timelines and payment cycles.
Business Overview
Established in 2003, RVNL plays a pivotal role in implementing rail infrastructure projects on behalf of the Ministry of Railways. Its project portfolio spans new line construction, gauge conversion, major bridges, workshops, and railway electrification across India.
In addition to its core engineering and project management services, RVNL also earns a share of freight revenue through long-term concession agreements, providing a steady ancillary income stream.
Summary
While RVNL’s revenue growth underscores sustained execution momentum, the decline in profitability and negative cash flow highlight near-term financial pressures. Efficient working capital management and faster receivable recoveries will be key focus areas as the company navigates an ambitious project pipeline in India’s expanding rail infrastructure ecosystem.
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