The stock price of Rail Vikas Nigam Ltd (RVNL) has gained around 44% in the past 5 days. The company’s stock is seeing strong buying demand. This is also reflected in the high trading volume that the stock saw yesterday.
RVNL is a project execution company in the railways sector. Bullish momentum has come in the stock because of two recent projects that it has won. One of these projects is for building of 200 Vande Bharat trains for a total price of Rs 58,000 crore. RVNL has won this project in a joint venture with Russian company TMH. The other project is for Mumbai Metro Line 2B. RVL has won this project in a joint venture with Siemens India. The project is worth Rs 378.16 crore.
Such kind of jump happens when some investors believe that the stock is grossly undervalued by the market. Rail projects are going to see an increase not just in India but in other countries too in the foreseeable future. RVNL, with its strong expertise in project management and project execution in the rail sector, is expected to benefit greatly from this. The fundamental value of the stock may have gone up because of these future expectations. Stocks that are perceived to be undervalued by the market see strong buying demand from investors because their prices are more likely to rise in future.
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