with a market valuation of 8,811.87 Crore, RITES Limited is a medium sized Miniratna CPSE company operating in Industrial Sector. In India, RITES is a major player in the engineering and transportation consultancy sectors. The firm is the only export division of the Indian Railways providing rolling stock. The company’s successful track record of 48 years covers more than 55 countries across the continents of Asia, Africa, Latin America, South America and the Middle East. The company has announced a 45% interim dividend along with its second quarter earnings.
The company said in a stock exchange filing that “The Board of Directors has declared the second interim dividend for the financial year 2022-23. 4.5 per share of the company (45% of the paid-up share capital). Further, as mentioned in our letter no. RITES/SECY/NSE, dated 03.11.2022, the record date fixed for the purpose of payment of second interim dividend for the financial year 2022-23 is November 18, 2022.”
The company announced net sales of 659 Cr on a consolidated basis as compared to Q2FY23 766 Cr in Q2FY22, representing a YoY decline of 13.9%, net sales declined by 15.1% on a standalone basis 744 crore in the year-ago quarter 632 crore posted in the quarter ending September 2022. On a consolidated basis, EBITDA declined by 20% Q2FY22 to . 226 crore in 181 Crore in Q2FY23 while EBITDA declined by 24.20% on standalone basis 208 cr in Q2FY22 158 crores were posted in Q2FY23. On a consolidated basis, the company declared a net profit of As compared to 140 Cr in Q2FY23 174 Cr in Q2FY22, representing a YoY decline of 19.60% and on a standalone basis the company declared a net profit of Rs. 131 Cr in Q2FY23 as compared to Rs. 163 Cr in Q2FY22 represents a YoY decline of 19.50%.
Mr. Arafat Syed – Senior Research Analyst at Reliance Securities said, “RITES reported weak performance in 2QFY23. Revenue declined 13% YoY (up 9% QoQ) to Rs 6.6bn, from our estimate of Rs 8.9bn Lower, led by a sharp decline in export revenue to Rs 788mn, down 77% YoY.While domestic consultancy segment revenue grew 16% YoY to 2.8bn, domestic leasing revenue grew 9% YoY to Rs 355mn. From 2014, its revenue from the domestic turnkey segment grew 117% YoY to Rs 2.4 billion. EBITDA declined 16% YoY to Rs 1.8bn (our estimate of Rs 2.6bn), while EBITDA margin rose 108 bps YoY to 27.5% (ours of 29%). The PAT came in at 20% YoY and 3% QoQ down to 1.4bn (our estimate of Rs 2.1bn).”
“Rights gave muted weak performance in 2QFY23 due to lower export revenue with lower margins. RITES is a direct beneficiary of India’s railway infrastructure improvement story. Its presence in the area of transportation infrastructure from pre-commissioning to execution capabilities across different geographies and segments. We have BUY rating on the stock,” said Mr. Arafat Sayyed.
Shares of RITES Limited closed on Friday 367.60 each, down 3.40% from previous close 380.55. On YTD basis, the stock has gained 35.37% so far in 2022.
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