One of the Navratna PSU stocks, a leading player in India’s transport consultancy and engineering sector, has jumped to an intraday high of 4.44 percent after receiving a contract for highway engineering services in Guyana worth USD 9,713,470.
Stock price movement:
With a market capitalization of Rs. 14,636.79 crores, the shares of RITES Limited were intraday high at Rs. 309.85 per equity share, rising nearly around 4.44 percent from its previous day’s close price of Rs. 296. Since then, the share has retreated and is now trading at Rs. 304.55.
What Happened:
RITES has been selected as the highest-scoring bidder for the project to upgrade the Palmyra to Moleson Creek Highway engineering services. The company contract is awarded by the Ministry of Public Works, Government of the Co-operative Republic of Guyana.
This international contract involves a total execution period of 60 months, including 36 months for pre-construction and construction phases and 24 months for post-construction (defect liability period). The contract value is USD 9,713,470, excluding taxes (approximately Rs. 82.29 crore).
Order Book of RITES:
RITES Limited showcases strong business performance with a robust order book of Rs. 6,581 crore as of September 2024. The company’s diversified portfolio includes exports worth Rs. 4,240 crore, consultancy services at Rs. 2,542 crore, turnkey projects valued at Rs. 2,506 crore, REMC Ltd. at Rs. 120 crore, and leasing services at Rs. 173 crore.
In Q2FY25, RITES Limited secured Rs. 729 crore in new projects, with consultancy services and turnkey projects leading at Rs. 327 crore each. The company’s competitive edge is evident, with 63% of orders secured through competitive bidding and 37% through nominations, highlighting its strong market presence and technical proficiency.
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Major Projects Secured in Q2 FY25
RITES Limited secured a strong portfolio of 91 projects worth Rs. 729 crore in Q2 FY25, covering diverse sectors and regions. Most of these projects are set for completion between 2025 and 2027, providing steady revenue visibility for the future.
A major highlight is the Rs. 320 crore project for the construction of a medical college and hospital in Amravati. Significant consultancy projects include Rs. 100 crore for railway operation and maintenance services at Dhamra Port and Rs. 43 crore for TPM and QC services for 47 roads in Assam.
The company’s export segment has shown promise, securing a Rs. 36 crore locomotive supply contract for Tsiko Africa Logistics. Additionally, the leasing division continues to grow through several locomotive leasing agreements with GSECL and NSPCL.
Recent Quarter Results and Ratios
RITES Limited reported a decline in revenue, which fell by 7.04% year-over-year (YoY) from Rs. 582 crore in Q2 FY24 to Rs. 541 crore in Q2 FY25. Similarly, the company’s net profit dropped by 25.45%, from Rs. 110 crore in Q2 FY24 to Rs. 82 crore in Q2 FY25.
Over the past three years, RITES Limited has achieved a compound annual growth rate (CAGR) of 8.79% in revenue and 3.69% in net profit.
Regarding return ratios, the company’s return on capital employed (ROCE) stands at 25.4%, while its return on equity (ROE) is 17.5%. With an almost debt-free status, RITES Limited’s earnings per share (EPS) is Rs. 166.
Company Overview
RITES Limited is formerly known as Rail India Technical and Economic Service Limited and is a leading public sector undertaking in India, founded in 1974. The company specializes in engineering consultancy and project management services, focusing primarily on the transport infrastructure sector.
Written By – Nikhil Naik
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