RITES on right track

about 1 month ago
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RITES is showing an over 2 times surge in volumes with the stock price too exhibiting a lot of volatility. The stock, which closed yesterday at Rs.302.95, opened higher at Rs.314.95, going up to an intra day high at Rs.321.40. But at that level, it lost steam and is now at Rs.310 levels, remaining in the green.

The market is enthused with its performance for Q2FY19. It recorded total income of Rs.473 crore in the Q2’FY19, up by 93% (YoY). The increase was mainly contributed by increased consultancy and turnkey business which has grown by Rs.132 crore and Rs.104 crore respectively. Domestic leasing business has also grown by 23%.

EBITDA and PAT have gone up by 99% and 59% to Rs.182 crore and Rs.117 crore respectively. The increase in profits can be attributed to growth in consultancy, domestic leasing and turnkey business. Company has improved upon EBITDA margins to 38.5% as against 37.4% in corresponding period of last financial year. Employee cost has almost remained constant as compared to the corresponding period of last financial year and enhanced employee productivity helped to increase margins.

Consultancy business has contributed about 67% of the operating turnover and income from the consultancy has increased by 83% to Rs.292 crore in Q2’FY19.  Income from construction projects has increased significantly by Rs.104 crore and registered at Rs.116 crore in Q2’FY19.

Company’s standalone Order Book stands at Rs.6183 crore as of 30.09.2018 which is expected to be executed in the next 1 to 3 years. This order book also includes export order book of Rs.1284 crore as on 30.09.2018. The present export order book is likely to be executed in 2 to 2.5 years time. As per delivery schedule Company will start exporting in the 2nd half of FY19.

Further commenting on outlook for the FY19, Mr. Rajeev Mehrotra, CMD, reiterated that “Based on the order book and half yearly performance of the company, I expect, company will achieve targeted 22% operating revenue growth over last year.”

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