RITES Share Price Climbs 4% After Securing IIM Raipur Project Worth ₹148.25 Crore

RITES Limited, a public sector enterprise specializing in transport consultancy and engineering, saw its share price surge nearly 4% in early trade on December 6. The boost came after the company secured a ₹148.25 crore order (excluding GST) from the Indian Institute of Management (IIM) Raipur for Phase II development of its Chhattisgarh campus.

Scope of the Project

As the Project Management Consultant (PMC), RITES will oversee the execution, supervision, monitoring, and development of the IIM campus. The project is to be completed on a cost-plus basis within 23 months, reinforcing the company’s expertise in handling complex and time-bound infrastructure projects.

About RITES: A Glance at Its History and Role

Established in 1974, RITES is a government-owned enterprise with a global presence. Known for its transport consultancy and engineering services, the company also acts as the exclusive export arm of Indian Railways for rolling stock, barring a few countries like Thailand, Malaysia, and Indonesia. Its diverse portfolio and extensive geographical reach have cemented RITES as a key player in infrastructure consultancy.

Quarterly Performance: A Mixed Bag

Despite the positive news of the IIM project, RITES reported subdued financial performance for Q2 FY24:

• Net Profit Decline:
  Net profit dropped 25% year-on-year to ₹82.5 crore, down from ₹110.2 crore.
• Revenue Drop:
  Revenue decreased by 7.1% to ₹541 crore, compared to ₹582.4 crore in the same period last year.
• EBITDA and Margins:
  Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) fell 23% year-on-year to ₹106.4 crore, with margins narrowing to 19.7% from 23.6%.

Order Book: A Silver Lining

Despite the dip in financial metrics, RITES achieved a significant milestone by securing over 90 orders worth ₹729 crore during Q2 FY24. The company’s total order book now stands at ₹6,581 crore.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.