RITES Shares Surge on ₹148.25 Crore IIM Raipur Project Win

resr 5paisa Research Team

Last Updated: 6th December 2024 - 02:13 pm

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Shares of RITES experienced a nearly 5% jump in early trading on December 6 after the company secured a major contract from the Indian Institute of Management (IIM) Raipur. The project, worth ₹148.25 crore (excluding GST), appoints RITES as the Project Management Consultant (PMC) for Phase II development of the institute's campus in Chhattisgarh. The project includes activities such as execution, supervision, monitoring, and development and is set to be completed on a cost-plus basis within 23 months.

At 12:18 PM IST, the shares of RITES were trading 2.89% higher at ₹295.70 on NSE. For the year to date, the company's stock has delivered a return of over 18%, outperforming the Nifty 50, which gained 13% in the same period.

"We are pleased to inform you that Rites has been appointed as Project Management Consultant (PMC) for the Execution, Supervision, Monitoring & Development of Phase II Campus of Indian Institute of Management Raipur (Chhattisgarh) Project on cost plus basis from the Indian Institute of Management Raipur (IIM Raipur)," the filing read. 

Despite these achievements, the company reported weaker performance in the September quarter compared to the previous year. Net profit fell 25% to ₹82.5 crore, down from ₹110.2 crore, while revenue declined 7.1% year-on-year to ₹541 crore, from ₹582.4 crore.

Additionally, EBITDA dropped 23% year-on-year to ₹106.4 crore, with the EBITDA margin shrinking to 19.7% from 23.6%. However, RITES has remained resilient, securing over 90 orders in Q2—an average of one per day—and expressed confidence in maintaining this growth trajectory through the year.

Although RITES reported weaker financial performance in the September quarter, the company successfully secured over 90 orders during Q2, averaging an impressive one order per day. This achievement underscores RITES' operational resilience, and the company remains confident about sustaining this momentum for the rest of the year.

Founded in 1974, RITES is a public sector enterprise specializing in transport consultancy and engineering. It is recognized for its diversified services and extensive international reach. The company also acts as the exclusive export arm of Indian Railways for rolling stock, except in Thailand, Malaysia, and Indonesia.

RITES specializes in railway engineering, encompassing the planning, design, and construction of rail networks, stations, and associated infrastructure. Beyond railways, the company provides expertise in transportation logistics, urban and rural infrastructure development, and project management services. Its contributions extend to critical sectors such as freight management, airport and port development, and highway construction, highlighting its diversified capabilities in the infrastructure domain.

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