Rail Vikas Nigam Ltd Management Discussions

Industry Structure and Development:

Indias logistic market is more than 300 billion dollar and has made remarkable progress in recent years. A significant milestone has been achieved with significant reduction in logistic cost, reflecting the success of sustained reforms and integrated planning. This achievement brings India closer to global benchmarks and demonstrates how coordinated infrastructure development and digital integration are transforming the logistics landscape, making it more efficient, competitive and future-ready.

To further strengthen the sector, the Government of India has launched several key initiatives, including the PM Gati Shakti National Master Plan and the National Logistics Policy (NLP). These initiatives are aimed at enhancing logistics efficiency, reducing transportation costs, improving multimodal connectivity, and increasing the ease of doing business across the country.

India has the fourth-largest railway network in the world, with a route length of over 69,000 route kilometres (Rkm). Indian Railways is one of the worlds largest rail networks, operating over 25,000 train services every day and serving as the backbone of the nations transportation system. During FY 2025–26, Indian Railways carried a record 741 crore passengers and transported 1,670 million tonnes (MT) of freight, reaffirming its pivotal role in supporting economic growth, facilitating seamless connectivity, and promoting sustainable transportation across the country.

In the recent past, various railway reforms have been initiated at the organisational and functional level to enhance efficiency, safety, innovations and transparency and to achieve faster project execution. Participative models for rail connectivity, introduction of private train operators and the focus on encouraging participation of the private sector in infrastructure upgradation and station development are noteworthy reforms.

Indian Railways has prepared a National Rail Plan (NRP) for India - 2030 which envisages to create a Future Ready Railway system. The NRP is aimed to formulate strategies based on both operational capacities and commercial policy initiatives to increase modal share of the Railways in freight to 45%. The objective of the Plan is to create capacity ahead of demand by 2030. As part of this Plan, Vision 2024 has been launched for accelerated implementation of certain critical projects by 2024 such as electrification, multi-tracking of congested routes, upgradation of speed to 160 kmph on certain routes, upgradation of speed to 130 kmph on all other Golden quadrilateral routes and elimination of all Level Crossings on such routes. While new sections are being progressively commissioned for traffic in the Eastern and Western Dedicated Freight Corridors, new Dedicated Freight Corridors have been identified and expansion of rail networks in Jammu and Kashmir and North Easter region of the country is being emphasized. Indian Railways plans to net-zero carbon emission by 2030.

Many new improvements, such as self-designed Vande Bharat Express, Tejas Express, Vista dome Coaches, modern Signalling Systems with enhanced safety & Kavach compliant, Long Haul Freight Trains, High Capacity and High-Speed wagons, Kisan Rail, Solar powered passenger coaches etc have been undertaken to bring about sea change in customer comforts and expectations. Innovative improvements are also being brought upon by assimilating new technologies in the form of SMART Coaches, SMART Locomotives, SMART Yards, Automated Train Examination System, Automatic Train Protection, Centralized Traffic Control and Train Management System etc. Deployment of Anti-Collision Device (ACD) Network (Raksha Kavach) in the entire length and breadth of Indian Railways is another major initiative to ensure safety in rail travels.

Indian Railways is considered the countrys lifeline for transporting passengers as well as cargo. To remain competitive vis-å-vis other transportation modes and to provide optimum level of service to passengers and for freight, there is an acute need to invest in railway infrastructure to augment capacity, expand the network and make it more efficient and customer centric.

Role of Rail Vikas Nigam Limited:

Rail Vikas Nigam Limited (RVNL), a Navratna CPSE under the Ministry of Railways, has created state-of-the-art rail transport capacity and has been a key player in Indias Infrastructure development since its inception in 2003. RVNL is executing projects on a fast track basis by adopting international project execution, construction, management practices and standards. RVNL has completed over 158 projects contributing significantly to the nations railway network and economic growth.

RVNL was incorporated with an objective to undertake rail project development, mobilization of financial resources and implementation of rail projects pertaining to strengthening of golden quadrilateral and port connectivity and raising of extra- budgetary resources for project execution. RVNL is in the business of executing all types of railway projects including new lines, doubling, 3 rd line/4 th line, gauge conversion, railway electrification, metro projects, workshops, mega bridges, hilly railway projects, construction of cable stayed bridges, institutional buildings etc.

RVNL has been functioning as an executing arm of Indian Railways and works for and on behalf of the Ministry for projects assigned to it for execution. It generally works on a turnkey basis and undertakes the full cycle of project development from conceptualization to commissioning including stages of design, preparation of estimates, calling and award of contracts, project and contract management, etc.

The projects are spread all over the country and for efficient implementation of projects, 29 Project Implementation Units (PIUS) established at 23 locations to execute projects in their geographical hinterland. They are located at Ahmedabad, Agra, Bengaluru, Bhopal, Bhubaneshwar, Chennai (2 Units), Chandigarh, Indore, Kolkata (3 Units), Kharagpur, Lucknow, Mumbai, Nagpur, Patna, Pune, Raipur, Rishikesh, Ranchi, Secunderabad, Varanasi (2 Units), Delhi, Bharatnet (East-LKO, West-Noida) and Waltair. Two projects units are also established outside India, one is at Maldives & another is at Dubai. The PIUS are established and closed as per requirement.

RVNLs major client is the Indian Railways and other clients include various Central and State Government Ministries, departments and Public Sector Undertakings. Since 2021, RVNL has undergone a paradigm shift in its functioning. RVNL is also participating in Metro, Mega Bridges, Highways, Roadways, Buildings, Ports, Transmission line, Irrigation, Signalling works, MMLPs and other infrastructure sectors through competitive bidding.

Till 31 st of March, 2026 it has participated in bids worth more than Rs.3 lakh crores of projects, and has won Projects/ awarded/ declared L1 for about Rs. 60,000 Crore.

The first two projects won by RVNL in the open market, i.e. Indore Metro projects – 10.9 Km viaduct and 16 stations have been commissioned within the time frame. First overseas project in Maldives is also progressing very well. Thus, RVNL has transformed itself from #LocalRaillnfra to #GlobalRaillnfra. RVNL successfully completed an urban renewed project of 5.1 km Kharicut Canal development project for Ahmedabad Municipal Corporation.

RVNL has commissioned more than 17000 KM of Railway infrastructure. The project expenditure was C 2 lakh crores as on 31.03.2026.

Government of India holding in RVNL has been disinvested in phases:

IPO (April 2019) 12.16% OFS (March, 2021) 9.64%, OFS (July, 2023) 5.36%,

As part of its original mandate, RVNL has successfully set up five project specific Special Purpose Vehicles (SPVs) for execution of important rail connectivity projects in PPP mode. Five SPVs have already been commissioned for traffic and generating significant traffic for Indian Railways.

RVNL had recognised the vast potential for building a High-Speed Rail Network in the country and with the approval of President of India, had formed High Speed Rail Corporation of India Ltd. (HSRC), as its subsidiary. Feasibility studies for Delhi-Kolkata, Delhi-Mumbai, Mumbai-Chennai and Delhi-Chandigarh-Amritsar have been undertaken by HSRC. Subsequently, HSRC has been renamed as HSRC Infra Services Limited and repurposed to manage in bidding of projects for RVNL and to provide project management consultancy services.

SWOT ANALYSIS

Strengths

Strong Resource Mobilization: RVNL has successfully mobilized funds for the construction of new lines by creating project specific SPVs with strategic stakeholders. Its large capital base can be leveraged to raise funds as per its original mandate.

Streamlined Project Approvals: Ministry of Railways has delegated the authority to RVNL for sanctioning of estimates within prescribed limits and for awarding contracts of any value for the projects in hand enabling RVNL to implement projects faster.

Industrial Influence: As RVNL can award large value contracts, it has been able to attract the best infrastructure companies in India.

Full Lifecycle Expertise: It has developed expertise in undertaking all stages of project development - from concept to commissioning.

RVNL has built the requisite skills and experience to follow ADB procedures for contracting and ensure Resettlement and Rehabilitation of Project Affected Persons to implement socio-economic safeguards.

Advanced Construction Mechanization: It has introduced large-scale mechanization in all aspects of construction to achieve high quality output.

It has refined its tendering processes and introduced innovative concepts like multi-package tenders resulting in faster decision making and savings in overall costs

It has a sound and robust financial management system, allowing for effective monitoring and control of expenditure.

HSRCISL, a subsidiary of RVNL, is available to provide consultancy service and also for implementation of high-speed corridors in the time to come.

Dedicated Growth Arms: RVNL has set up a Business Development Cell to participate in competitive bidding process in Infrastructure Sector.

Weaknesses

RVNL used to be dependent on the Ministry of Railways for funding of projects which is critical for the future growth of the Company and for timely implementation of projects.

RVNL is also depending upon MOR on sanction of the revised estimates.

RVNL has not been notified as a Zonal Railway and accordingly does not have the authority to approve drawings, designs etc.

As per the MOU executed in October 2003, RVNL was mandated for obtaining sanction from Commissioner of Railway Safety but, subsequently, the same was withdrawn in November 2007. Authority for CRS sanction shall expedite the project commissioning and enhance the project delivery.

The progress of projects often gets impaired on account of delays in securing the necessary approvals for plans, granting of traffic blocks, etc. from Zonal Railways.

Changes in approved plans by the Railways, during execution of projects, results in delays.

The projects taken from market are prone to commercial risks.

Opportunities

RVNL is implementing Rishikesh — Karnaprayag project in the Himalayan region and can also take up more such projects in hilly terrain and also projects located at strategic locations,

With the work of execution of Kolkata Metro projects, RVNL has developed expertise for implementation of metro projects in other cities across the country.

RVNL has developed expertise in construction of mega bridges on major rivers such as the Ganga, Yamuna, Chambal and has also executed state -of- art New Vertical Lift Bridge - Pamban near Rameshwaram on sea.

RVNL has successfully constructed major workshops for Indian Railways in fast track mode. RVNL can thus undertake implementation of large buildings, factories, townships etc. for other agencies as well.

With RVNLs growth as a major provider of a variety of rail infrastructure, there is an opportunity of securing rail infrastructure projects overseas.

RVNL can play a significant role in raising extra-budgetary resources for project execution as this is a specific mandate of the Company and has experience of implementation of projects in PPP mode.

RVNL has already shown capabilities in execution of marine works in overseas.

Threats

The shortage of technical manpower in market/Railways., with required experience in the Rail sector, is a major constraint in the delivery of projects.

A large percentage of RVNL workforce are deputationists from Indian Railways. Any adverse policy decision may result in railway officers not being available for deputation.

Land acquisition issues require to be resolved expeditiously so that the progress of projects is not hampered.

Delays in clearances for project execution such as tree-cutting, removal of utilities from the construction of viaducts for metro rail projects etc.

A number of projects are being executed along existing running lines, which makes safety a serious challenge.

Projects are adversely affected due to poor law and order conditions such as those in Left Wing Extremists affected districts.

Change of Policy by MOR to allot projects on nomination basis to RVNL.

Not following the approved revenue stream at the stage of revised estimate shall affect the financials of RVNL.

Industrial Relations: Industrial Relations across all corporate headquarters, project units and regional construction sites remained uniformly harmonious, productive and cordial.

Strategies

1. Cost and Timeline Containment: The Company is taking measures for ensuring cost control and timely delivery of projects, without any compromise on quality for the execution and delivery of rail infrastructure projects on a fast track basis. RVNL can play a significant role in Ministry of Railways efiorts of raising extra-budgetary resources for project implementation, especially through the SPV route. Innovative models for project financing will also have to be explored. RVNL has also requested Ministry of Railways that it may be permitted to leverage its equity base to raise funds from the market as per its mandate.

2. Permanent Cadre Construction: RVNL has created a permanent cadre through absorption to provide Institutional continuity and to reduce the dependence on seeking officers and stafi on deputation from Railways. Most of the workforce consists of qualified technical stafi with experience in Railways and/or its PSUs. Wherever required, RVNL has also recruited specialists to provide expert guidance in its project implementation.

3. A comprehensive and appropriate training programme is being implemented to develop competent, suitably skilled and qualified manpower. Efiorts are also being made to transfer skills and best practices from other Infrastructure sectors and acquiring skills related to execution of Railway projects.

The Mission, Vision and Objectives of the Company: Mission

To be a leading Construction Company of India with presence in all infrastructure domains, both within the country and outside.

Vision

To build world-class durable infrastructures with the latest technologies and designs following the best quality and safety standards.

Objectives

To undertake and execute successfully project development, financing and implementation of projects relating to infrastructure of all kind.

To build, maintain, sustain, project implementation teams, ready to launch execution of projects won, with commitments to timely execution and highest level of technical standards.

To mobilise financial and human resources for project implementation timely execution of projects with least cost escalation. To maintain a cost-effective organisational setup.

To foster a culture of continuous learning within the Organisation, and to constantly upgrade to innovative technologies and collaborative practices, in order to build and sustain a future-ready work force and managerial platform.

To permeate a philosophy of sustainability within the Organisation, by a continuous internal conversation with employees, partners, associates and consultants, and to promote professional integrity, mutual trust & care.

Outlook

The Company proposes to expand its operations independently and through its Subsidiary Company which will undertake the siding construction, siding maintenance, procurement of machines for operation and maintenance, PMC/GC services, solar panel work, Transmission line work, Export of wagon/ coaches, Cranes etc, construction of Metro and HSRC and also include bidding in the open market and thus it would be bidding arm of the parent Company i.e. RVNL.

Concerns

Over a period of time, it is noticed that there is a huge outstanding share of project expenditure due from State Government/Union Government e.g. Government of Andhra Pradesh, Telengana, Himachal Pradesh, Maharashtra. Such committed funds from State and Union Government have got bearings on project delivery.

Delays in land acquisition, finalization of plans by users, timely clearance of permissions from other Government Departments (mainly Ministry of Environment and Forests), law and order problems, and the continued support from Ministry of Railways are main concern areas in project execution. The capacity constraints of agencies capable of delivery of large value rail infrastructure projects will also have to be addressed to ensure the successful and timely completion of projects.

Internal Control Systems

Effective internal control systems have been put in place for monitoring the implementation of projects including periodic reviews of the physical and financial progress, evaluation of efficiency of cost control measures based on inputs of both the Technical and Finance Departments.

Reviews of the progress and nature of expenditure is regularly conducted by the Finance and Accounts Department and reports thereon are submitted to Management. Budgetary reviews are also conducted.

The Company has laid down and developed a framework of internal financial controls, with reference to financial statements and reporting and such controls are adequate and operating effectively. A system of internal audit by an external firm ensures the efficacy of control systems and also submission of comments on the appropriateness of incurrence of expenditure, and their accountal by the Company. The reports of the internal auditor are periodically reviewed by Audit Committee of the Board of Directors and implementation of recommendations are monitored. The annual accounts of the Company are also subject to scrutiny by the Statutory Auditor appointed by CAG and Audit by CAG.

Risk Management Framework

Enterprise Risk Management (ERM) is a strategic and structured approach adopted by RVNL to identify, assess, mitigate, and monitor potential risks that may impact its business operations, performance, and long-term sustainability. In alignment with the SEBI (Listing Obligations Disclosure Requirements and Business Responsibility and Sustainability Reporting (BRSR) framework, the companys ERM framework integrates environmental, social and governance (ESG) risks alongside traditional financial and operational risks. A Director level Sub-committee of the Board, Risk Management Committee (RMC) has been constituted to oversee the Enterprise Risk Management. This Committee is chaired by the Director (Operations), with Director (Personnel), Government Nominee Director, one Independent Director, and Chief Risk Officer (CRO) serving as Members. RMC oversees risk management, ensuring that material risks, including regulatory compliance, cyber security and stakeholder concerns are proactively managed. Dynamics, thereby fostering resilience, informed decision-making, and value creation for all stakeholders. The RMC operates with the pivotal role of identifying and evaluating risks, prioritizing them accordingly, devising timely action plans for effective mitigation. The Company also created a sub-group, Risk Management Group (RMG) to discuss the potential risks and oversee the Risk Management Plan & its implementation.

The Risk Management Committee holds key roles and responsibilities, which include:

1. Developing a comprehensive Risk Management Policy that encompasses the identification of internal and external risk specific to the organisation, such as financial, operational, sectoral, ESG, information and cyber security risks, or any other risks determined by the committee.

2. To monitor and oversee implementation of the risk management policy, including evaluating the adequacy of risk management and internal control systems.

3. Ensure that appropriate methodology, processes, and systems are in place to monitor and evaluate risks associated with the business of the Company.

4. To review the risk management policy considering the changing business dynamics and evolving complexity.

5. To keep the board informed about the nature and content of its discussions, recommendations, and actions to be taken.

Financial Performance (Standalone Financial)

The Company recorded total income of C20,818.75 crore compared to C 20,888.24 crore in the previous year. Profit after tax for the year 2025-26 is C 800.48 crore as against C 1,188.62 crore in the previous year. During the financial year, the Company has earned a turnover of C 20,012.26 crore as against C 19,869.35 crore of previous year.

Key Financial Ratios:

S. No. Name of Ratio	Formula	2025-26	2024-25	Variation over FY 2024-25 (%)	Remarks
1 Debtor Turnover (No of Days)	Trade Receivable X 365 / Operating Turnover	98.79	32.81	201.10%	-
2 Inventory Turnover	Material Consumed/ Average Inventory	3.87	-		This is the first year of inventory so comparison not possible.
3 Interest Coverage Ratio	-				Not applicable as there is no liability on RVNL to serve the debt.
4 Current Ratio	Current Assets / Current Liabilities	1.89	2.05	-7.98%	-.
5 Debt Equity Ratio	Long term debt / Equity	0.54	0.62	-13.06%	-
6 Operating Profit Margin (%)	PBT / Operating Turnover	5.51%	7.80%	-29.40%	-
7 Net Profit Margin (%) (PAT / Total Revenue)	PAT/ Total Revenue	4.00%	5.98%	-33.11%	-.
8 Return on Net Worth (%)	PAT/ Avg.Net Worth	9.16%	14.42%	-36.51%	-

Human Resource Development and Industrial Relations

Rail Vikas Nigam Limited (RVNL) is committed to developing a competent, motivated, and high-performing workforce by fostering an environment that encourages continuous learning, teamwork, collaboration, and employee engagement. The Company strives to attract, develop, motivate, and retain talent while promoting employee wellbeing and a healthy work-life balance.

To strengthen its organizational capabilities and ensure longterm sustainability, RVNL has established a nucleus of its own permanent cadre through the implementation of an

Absorption Policy and a Recruitment & Promotion Policy , duly approved by the Board of Directors. These policies provide a structured framework for building a skilled, committed, and future-ready workforce.

Cautionary Statement

Statements in the Management Discussion and Analysis Report describing the Companys strengths, strategies, projection and estimates are forward looking statements and progressive within the meaning of applicable laws and regulations. Actual results may vary from those expressed or implied, depending upon economic conditions, government policies and other incidental factors. Readers are cautioned and not to place undue reliance on the forward looking statements.