RITES Ltd
NSE:RITES
RITES Ltd
RITES Ltd., originally established as a public sector enterprise in 1974 under the Ministry of Railways, has carved out its niche as a globally recognized engineering consultancy firm. The company's inception was a strategic move to provide consultancy services in rail transport management to operators across Asia and Africa. Over the years, RITES has expanded its horizons beyond railways into a more diversified portfolio, including urban development, highways, ports, airports, and inland waterways. This diversification was not merely an expansion of services, but a calculated approach to leverage its engineering prowess and expertise in multimodal transport infrastructure.
The company generates revenue primarily through fee-based consultancy services and turnkey projects. This involves providing comprehensive project management services, from feasibility studies and project planning to design, engineering, and execution. RITES also deals in the export of locomotives and rolling stock, catering to the specific needs of international clients. Through a blend of domestic and international contracts, RITES Ltd. has grown into a robust entity in the infrastructure engineering sector. Its business model thrives on long-term relationships with governmental clients, securing a stable stream of income and bolstering its reputation with successful project delivery, thereby creating a sustainable growth trajectory.
RITES Ltd., originally established as a public sector enterprise in 1974 under the Ministry of Railways, has carved out its niche as a globally recognized engineering consultancy firm. The company's inception was a strategic move to provide consultancy services in rail transport management to operators across Asia and Africa. Over the years, RITES has expanded its horizons beyond railways into a more diversified portfolio, including urban development, highways, ports, airports, and inland waterways. This diversification was not merely an expansion of services, but a calculated approach to leverage its engineering prowess and expertise in multimodal transport infrastructure.
The company generates revenue primarily through fee-based consultancy services and turnkey projects. This involves providing comprehensive project management services, from feasibility studies and project planning to design, engineering, and execution. RITES also deals in the export of locomotives and rolling stock, catering to the specific needs of international clients. Through a blend of domestic and international contracts, RITES Ltd. has grown into a robust entity in the infrastructure engineering sector. Its business model thrives on long-term relationships with governmental clients, securing a stable stream of income and bolstering its reputation with successful project delivery, thereby creating a sustainable growth trajectory.
Order Book Record: RITES reported an all-time high order book of INR 9,262 crores, with management confident they will reach INR 10,000 crores by Q1 FY '27.
Steady Growth: Operating revenue and EBITDA saw sequential growth of about 10%, with management expecting the trend to continue into Q4 and FY '27.
Export Momentum: Export order book hit around INR 1,900 crores (including a new Mozambique order), with shipments expected to ramp up in Q4 and beyond.
Margins Maintained: Company sustained strong margins—EBITDA at approximately 24% and PAT margin at 18%—well above their red lines of 20% and 15% respectively.
Turnkey Execution Acceleration: Turnkey segment execution picked up in Q3 and is expected to see double-digit sequential growth from Q4 onwards.
Guidance Affirmed: Management reiterated double-digit FY-to-FY growth guidance and described FY '27 as a year of 'disruptive growth'.
Dividend Policy: High dividend payout policy (around 95%) will be maintained going forward.
