RITES, a government-owned engineering consultancy company, saw its share price rise by over 2% on Wednesday, November 6. The spike followed news that RITES had secured a significant order from the Delhi Metro Rail Corporation (DMRC).
Details of the DMRC Order 🔍
- Order Purpose: This order is for retrofitting RS-1 trains to enhance their performance and extend their lifespan.
- Tender Process: DMRC released the tender on September 26, which RITES won with the lowest bid, leading DMRC to issue a Letter of Acceptance (LoA) to RITES on November 5.
- Order Value: The project is valued at ₹36.36 crore (excluding GST) and is expected to be completed within three years of contract issuance.
Key Contract and Financial Highlights 📊
- No Related Party Transactions: The contract involves no related-party transactions, ensuring full compliance and transparency.
- Domestic Client: DMRC is the domestic client for this project, with all operations to be executed in India.
Other Recent Wins for RITES 🚉
- DMRC Consortium Project (September): In September, a consortium led by RITES won an ₹87.58 crore tender from DMRC, with RITES holding a 49% stake worth approximately ₹42.91 crore (including GST).
- UP State Bridge Corporation Order: On October 28, RITES emerged as the lowest bidder for a ₹59.13 crore project (excluding GST) with UP State Bridge Corporation Limited, also to be completed within three years.
Financial Performance Highlights 📉
- Q1 FY24 Net Profit: RITES reported a 24.4% drop in net profit, standing at ₹90.4 crore, down from ₹119.6 crore in the same quarter last year.
- Revenue Decline: Revenue decreased by 10.8%, from ₹544.3 crore in Q1 FY23 to ₹486 crore in Q1 FY24.
- Upcoming Results: RITES will release its Q2 FY24 financial results on November 6 evening.
RITES Stock Performance 📈
- End-of-Day Price: RITES shares closed at ₹295.50 on the NSE, up by 0.27% for the day.
- Year-to-Date Gain: The stock has gained approximately 17.43% since the start of the year.
- One-Year Return: Over the past year, RITES has delivered a return of around 31.57%.
Summary of RITES Financial and Order Status 📊
| Key Metric | Details |
|---|---|
| Latest Order (DMRC) | ₹36.36 crore (excluding GST) |
| Order Duration | 3 years |
| Q1 FY24 Net Profit | ₹90.4 crore (down by 24.4%) |
| Q1 FY24 Revenue | ₹486 crore (down by 10.8%) |
| September DMRC Order | ₹87.58 crore (RITES share: ₹42.91 crore) |
| UP Bridge Project | ₹59.13 crore (excluding GST) |
| Current NSE Price | ₹295.50 (up 0.27% today) |
| YTD Stock Gain | 17.43% |
| One-Year Return | 31.57% |
| Q2 FY24 Results | Expected on November 6 |
Investment Insight 📉
RITES continues to secure major contracts, demonstrating strong market competitiveness. However, investors should consider the recent financial performance and watch for the Q2 results to gain better insights into RITES’ financial trajectory.
