RITES is looking to shore up on exports with the segment contributing towards its revenues Q1FY25 onwards as rolling stock orders from Bangladesh and Mozambique materialise. The company was declared L1 for coach order from Bangladesh Railways – valued at close to ₹1000 crore – while for Mozambique its order consist of locomotives.

Bangladesh order was won via a global bidding process and is expected to materialise over the “next few weeks”.

Less export orders in hand and changing dynamics in the Railway inspection stream hit its H1 (April – September) revenues on a y-o-y basis.

According to Rahul Mithal, Chairman and MD of RITES, the company’s strategy for FY24 would be to expand its client base in the inspection stream and focus on substantial growth in the project consultancy business. This would be over and above its push for tapping into the export market.

RITES is also tapping into new verticals like consultancy for the green mobility segment where it sees scope in the coming days.

Pitches are also being made for the premium Vande Bharat trains across Lat-Am countries.

“We had pointed out the possibility of a slowdown in export revenue and the railway inspection stream having an impact on H1FY24 results. However, now if there is a sequential improvement. We are tapping into the export market again and orders would materialise over the next few weeks, new clients are being tapped in the inspection stream of business while (the) project consultancy business continues to do well,” he told businessline.

“For H2 of this fiscal and primarily through FY24, we would look at it as a period of consolidation and trying to hold on to FY23 (numbers). I see substantial growth happening Q1FY25 onwards as the strategy stabilises and starts generating revenues,” Mithal added.

One - order - a - day

According to him, margin pressures will “continue” for some time as the company re-works its strategy, and tries to push up earnings across verticals. There is a “gradual shift” from clients operating in a nomination mode to competitive bidding, which automatically brings down margins across businesses.

RITES is adapting to this shift and is “actively pursuing diversification and client expansion”.

“Over the next three to four quarters we could see revenues in some verticals go back to FY23 levels and margins would be close to FY23 levels, but not as high. The push is towards being a one-order-a-day company which would help prep up turnover and margins,” he said.

In Q2FY24, RITES secured 78 orders, averaging around 0.85 orders per day, against the previous year’s 0.7 – 0.8 orders per day. 

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