Shares of this infra stock under the ‘small-cap’ category jumped approximately 2 percent in Thursday’s trading session after the company signed an MoU with Damodar Valley Corporation (DVC) for Project Management Consultancy Services. In the last six months, the company’s stock gained nearly 50 percent for its holders.
With a market capitalization of Rs 16,458.28 crores, the stocks of Rites Limited started their trading session on Thursday at Rs 679.55 and currently trades at Rs 684.90, gaining around 2 percent compared to the previous closing level of Rs 674.25 apiece.
Such bullish share price movements were observed today after the company, through a recent regulatory filing with the Bombay Stock Exchange (BSE), intimated about signing a Memorandum of Understanding (MoU) with ‘Damodar Valley Corporation’ (DVC), a statutory body under the Ministry of Power.
The MoU is executed for the purpose of collaborating for “Project Management Consultancy” services for rail infra works. The partnership aims at finding infrastructure solutions for the upgradation, renovation, and development of rail connectivity for power plants.
The infra company will be working closely with DVC for the development of rail infrastructure facilities and associated structural and civil works.
During the recent financial quarters, the company’s basic business parameters, viz, its operating revenues as well as after-tax profits, showed a stellar financial performance with the former increasing from Rs 582 crores during Q2FY24 to Rs 683 crores during Q3FY24, and the latter, from Rs 110 crores to Rs 129 crores.
In addition, the company’s ratio analysis portrays the return ratios, viz, the return on equity (RoE) as well as the return on capital employed (RoCE), being reported at decent numbers during FY23 with the former reported at 20.81 percent and the latter at 25.84 percent.
As per the latest presentations, the company’s total order book, as of 31st December 2023, stands at Rs 5,496 crores, with the order-book split portraying the “Consultancy” segment as the major contributor with a 48 percent share, “Turnkey” segment with a 42 percent share, and the rest from Exports, Leasing, and others.
Incorporated in 1974, Rites Limited is a multi-disciplinary consultancy organization operating via multiple segments including consultancy services, its major revenue contributor, export of rolling stock, turnkey construction projects, power generation, etc.
Written by Amit Madnani
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