During Friday’s morning trading session, the shares of a leading player in the transport consultancy and engineering sector in India surged by 1.4 percent to Rs. 370.5 on BSE, after the company secured an order worth Rs. 100 crores from Adani Ports & SEZ Limited.
With a market capitalisation of Rs. 17,486.7 crores, the shares of RITES Limited opened in the green at Rs. 368.3, up by nearly 0.8 percent, as against its previous closing price of Rs. 365.4.
What’s the News:
RITES Limited has recently announced receiving a significant work order worth Rs. 100 crores from Adani Ports & Special Economic Zone Limited.
According to the latest regulatory filings with the stock exchanges, the order involves railway operation and maintenance (O&M) services, set to be carried out over five years starting from November 1, 2024.
In addition, the RITES Consortium has emerged as the lowest bidder (L-1) in a tender issued by Delhi Metro Rail Corporation Limited for “Retrofit Work in RS-1 Trains of DMRC”.
This order is pending final approval following the necessary evaluation process by Delhi Metro Rail Corporation Limited, in accordance with the requirements outlined in the tender documents.
The estimated value of the bid is around Rs. 87.58 crores, with RITES holding a 49 percent share, amounting to around Rs. 42.91 crores, to be completed within three years.
Also Read: Navaratna stock jumps 5% after receiving orders worth ₹ 48,000 Cr from Maharashtra Govt.
Previous Order:
On 4th September, RITES Limited signed a Memorandum of Understanding (MoU) with NBCC (India) Ltd., a CPSE under the Ministry of Housing Development. The agreement aims to explore and undertake a wide range of consultancy services, fee-based projects, and EPC contracts, covering everything from concept to commissioning.
RITES will provide consultancy and project management services, including conceptualization, planning, design, cost estimation, tender documentation, and other pre-construction activities, as well as coordination during construction.
Meanwhile, NBCC will contribute its expertise in project implementation, encompassing tendering, contract management, construction supervision, cost control, quality assurance, and oversight during the handover, commissioning, and defect liability periods.
Financials:
The company reported a decline in revenue from operations, experiencing a year-on-year decrease of nearly 10.6 percent, falling from Rs. 544 crores in Q1 FY24 to Rs. 486 crores in Q1 FY25. This decline was attributed to reduced
quality assurance (QA), consultancy work abroad, and exports during the quarter.
Similarly, net profit dropped from Rs. 120 crores to Rs. 90 crores during the same period, reflecting a decrease of 25 percent YoY.
As of Q1 FY25, the company’s order book amounted to Rs. 6,355 crores, with securing over 80 orders totalling Rs. 1,336 crores in the same quarter.
An increase in the export segment is expected in H2 FY25, as the supply of locomotives or coaches to Mozambique and Bangladesh is set to commence.
Stock Performance
The stock has delivered positive returns of nearly 46.5 percent of returns in one year, as well as around 9.5 percent returns in the last six months. So far in 2024, the shares of RITES Limited have given positive returns of about 44.5 percent.
About the Company:
RITES Limited, a distinguished Navratna and Schedule ‘A’ Central Public Sector Enterprise, functions as a multidisciplinary engineering and consultancy organisation.
The company is engaged in Design Engineering, Project Management Consultancy, Turnkey Construction, Export of Rolling Stocks, Locomotive Leasing, and Quality Assurance, serving multiple sectors including railways, highways, airports, land ports, ropeways, urban planning and infrastructure, ports and harbours etc.
Also Read: Stock hits 5% upper circuit after receiving order from Govt of Maha, Punjab, and Bihar Tourism
Written by Shivani Singh
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