RITES Ltd (NSE:RITES) Q4 2025 Earnings Call Highlights: Navigating Revenue Dips with Record ...
Profit After Tax (PAT) Dip: 14% decrease for the fiscal year.
Order Inflow: Over 150 orders totaling INR 1,400 crores in Q4.
Order Book: All-time high of nearly INR 9,000 crores (INR 8,900 crores).
Release Date: May 15, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
RITES Ltd (NSE:RITES) achieved an all-time high order book of nearly INR 9,000 crores by the end of FY25.
The company maintained a strike rate of more than one order a day and one export order per quarter.
RITES Ltd (NSE:RITES) aims for a 20% growth in top-line revenue and a commensurate growth in the bottom line for FY26.
The company has diversified its Quality Assurance (QA) business, contributing significantly to revenue and profit.
RITES Ltd (NSE:RITES) has a strong dividend payout ratio, maintaining around 95% in recent years.
RITES Ltd (NSE:RITES) experienced an 8% dip in revenue and a 14% dip in PAT for FY25.
Margins are expected to settle at lower levels, with EBITDA margins around 20% and PAT margins around 15-16%.
The company faces increased competition in its leasing business, impacting margins and profits.
Export revenue was nil in the previous year, indicating a need for recovery in this segment.
The consultancy business is shifting towards more competitive bidding, potentially affecting margins.
Warning! GuruFocus has detected 6 Warning Signs with NSE:RITES.
Q: Can you clarify the timeline for the delivery of locomotives to Mozambique and coaches to Bangladesh? A: Rahul Mithal, Chairman and Managing Director, explained that deliveries for the 10 locomotives to Mozambique and 200 coaches to Bangladesh are on track to start by the end of Q1 or early Q2 of FY26. Revenue realization will occur upon shipment, and the company aims to maximize deliveries within the fiscal year.
Q: What is the revenue guidance for FY26, and what will be the revenue mix? A: Rahul Mithal stated that RITES Ltd aims for a 20% growth in the top line and a commensurate increase in the bottom line for FY26. The company has an order book of INR 8,900 crores, with a mix of consultancy, turnkey, and export orders. Export revenue is expected to rebound significantly after a two-year gap.
Q: How sustainable are the current margins, and what is the outlook for future margins? A: Rahul Mithal noted that while Q4 margins were high, the overall FY25 EBITDA margin was about 23%, and PAT margin was 18%. For FY26, the expected EBITDA margin is around 20%, and PAT margin is 15% to 16%, reflecting the competitive nature of the order book.
Q: Can you provide an update on the consultancy business and its future prospects? A: Rahul Mithal highlighted that consultancy remains a core strength, with a focus on competitive bidding. The company expects continued growth in consultancy revenue, supported by recent orders and a diversified portfolio across infrastructure sectors.
Q: What is the status of the RITES and DNV JV in the Assurance business? A: Rahul Mithal explained that the QA business has diversified significantly, contributing INR 40-50 crores to revenue and profit. The company has expanded its QA inspection vertical, securing a majority of non-railway QA business, and aims to continue this growth trajectory.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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