The civil construction industry in India is a vital sector, contributing approximately 8.2% to the national GDP, valued at around $639 billion in 2023. It employs over 49.5 million people and is projected to reach $1.4 trillion by 2025, driven by rapid urbanization and significant government investments in infrastructure projects.
With a market capitalization of Rs 17,409.87 crore, the shares of Rites Ltd were trading at Rs 362.25 per share, decreasing around 0.86 percent as compared to the previous closing price of Rs 365.40 apiece.
Matter Explained:-
According to the CNBC reports RITES’ order book increased by 11% to ₹6,350 crore as of June 30. The firm has reached the milestone of landing one order every day and the company is confident to keeping up this pace throughout the year. Furthermore, the management maintains margins of roughly 22% despite fierce competition in both local and foreign orders.
Recently, the company was the lowest bidder in a ₹60 crore procurement from the UP State Bridge Corporation. Rites also secured a $26.74 million contract with Tanzania Railways Corporation to deliver, test, and commission four Diesel Multiple Units (DMUs).
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Furthermore, the profits before interest, tax, depreciation, and amortization (EBITDA) margin fell to 21.8% in the first quarter of the current fiscal year, from 29.8% the previous year. The firm concluded FY24 with a margin of 26.5%.
However, the goal is to steadily increase revenue, which will raise profits before interest, taxes, depreciation, and amortization (EBITDA) and profit after tax (PAT) on an absolute basis.
Management Comment:-
“In Q1 itself, the orders that we got on a competitive basis were about 70% plus, which is a huge jump from the previous year. So as you go more into the competitive arena, whether it is the domestic orders or exports, obviously they take a hit on the margins,” said Rahul Mithal, the Chairman and Managing Director of RITES.
Financial Condition:-
Looking forward to the company’s financial performance, revenue plummeted by 10 percent from Rs 544 crore in Q1FY24 to Rs 486 crore in Q1FY25, but during the same period, net profit dipped by 25 percent from Rs 120 crore to Rs 90 crore.
Export order & company focus:-
RITES, the export arm of Indian Railways, secured two major export orders: ₹900 crore for 200 coaches to Bangladesh and ₹300 crore for 10 locomotives to Mozambique, with revenue expected from Q1 FY26 and some shipments by FY25-end
The management emphasized a dual strategy: rapidly executing the existing order book while aggressively bidding for new domestic and international contracts, aiming to secure approximately ₹3,000 crores in new orders each quarter to sustain growth and enhance operational efficiency.
Company Profile:-
RITES Limited offers various services from concept to commissioning in transport infrastructure and related technologies. It operates through four segments: Consultancy Services, Leasing of railway rolling stock & equipment, Export of rolling stock, equipment, etc.
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Written by:- Abhishek Singh
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