One of the Navratna PSU stocks, a leading player in India’s transport consultancy and engineering sector, is recognized for its expertise in providing engineering and project management services. The stock has jumped 4.37 percent after being appointed as a
Project Management Consultant (PMC) by the Indian Institute of Management, Raipur, worth Rs. 148 crore.
Stock Price Movement:
In Friday’s trading session, RITES Limited’s share jumped to an intraday high of 4.37 percent from the previous close of Rs. 287.40. The stock opened at Rs. 293.90 and is currently trading at Rs. 296.85, with a high of Rs. 299.95 and a low of Rs. 293.15. The market capitalization now stands at approximately Rs. 14,228.27 crore.
What Happened:
RITES has been appointed as the Project Management Consultant (PMC) by the Indian Institute of Management Raipur for the execution, supervision, monitoring, and development of the Phase II Campus of IIM Raipur, Chhattisgarh.
The project is valued at Rs. 148.25 crore (excluding GST), is awarded on a cost-plus basis, and is set to be executed within 23 months, emphasizing RITES expertise in managing large-scale infrastructure projects.
Business Performance of RITES Limited
RITES Limited showcases strong business performance, supported by a sizable order book of Rs. 6,581 crore as of September 2024. The company’s diversified operations include exports valued at Rs. 4,240 crore, consultancy services at Rs. 2,542 crore, turnkey projects 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 contracts, with consultancy services and turnkey projects contributing Rs. 327 crore each. The company’s competitive edge is reflected in its order acquisition strategy, where 63% of orders were obtained 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 has secured a notable portfolio of 91 projects worth Rs. 729 crore in Q2 FY25, covering diverse sectors and regions. Most projects are scheduled for completion between 2025 and 2027, providing sustained revenue visibility in the coming years.
A highlight of this portfolio is the Rs. 320 crore contract for constructing a medical college and hospital in Amravati. Key consultancy contracts 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.
In the export segment, the company secured a Rs. 36 crore locomotive supply contract for Tsiko Africa Logistics. Meanwhile, the leasing division continues its growth with several locomotive leasing agreements signed with GSECL and NSPCL.
Recent Quarterly Results and Ratios
RITES Limited reported a decline in revenue, which dropped by 7.04% year-over-year (YoY) from Rs. 153 crore in Q2 FY24 to Rs. 541 crore in Q2 FY25. Similarly, the company’s net profit decreased by 25.45%, falling 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) is 25.4%, while its return on equity (ROE) stands at 17.5%. With an almost debt-free status, RITES Limited delivers an earnings per share (EPS) of Rs. 166.
Company Overview:
RITES Limited, previously known as Rail India Technical and Economic Service Limited, is a leading public sector undertaking in India, founded in 1974. The company excels in engineering consultancy and project management services, with a primary focus on the transport infrastructure sector.
Written By – Nikhil Naik
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