RITES expects double-digit growth next fiscal

RITES, transport consulting firm, expects to see double-digit growth next financial year supported by renewed push in National Infrastructure Pipeline (NIP) despite the challenges thrown up by the pandemic.

“I am optimistic about NIP. Next year, we expect a high double-digit growth supported by (business from) railways, highways, metros and NIP,” according to Rajeev Mehrotra, CMD, RITES, a public sector enterprise. Mehrotra said RITES might end the year flat (in terms of turnover) against last year.

During the pandemic, the company used digitisation and accumulated order book that it can serve during Financial Year 2021-22. “We concluded a major export order in June, mostly done through e-submission, video-based negotiation. We used the time (during Covid-19 triggered lockdown) to place order on Indian Railways’ production units (PUs) for coaches among others. We also placed orders for materials that we acquire and give to the PUs. Support from PUs and Ministry will help us meet export orders. Also, through Indian Railways e-tender route, we got award for electrification work among others early this year,” Mehrotra told BusinessLine.

Mehrotra expects growth to come from Cape gauge markets as some countries in Africa have cape gauge (distance between two rail track). This can be a good market for India’s locomotives and diesel electric multiple units, which are like coaches used in metro rails.

Indian Railways’ effort to focus on rolling stock for metre, cape and standard gauge market creates potential for companies like RITES. “Ghana, Mozambique, Kenya are looking at railways with renewed interest which makes times ahead interesting for us. The dearth of orders during Covid-19 may lead to a pile up of orders subsequently,” said Mehrotra.

“There is a scope to make semi-knocked down version of these products here and finish the manufacturing there (in Africa). This will lower transportation costs and also create jobs in those markets. Bogies and frame can go from here,” the RITES CMD said.

The locomotive-leasing business with the existing customers has recovered to a large extent. “Now, most of those locomotives are placed with the same customers or others from newer sectors like fertiliser or steel plants. Now, we are cautious in placing new orders. These locos cannot be lying idle,” Mehrotra said.

From December 2019, RITES has started e-office implementation but Covid sped up the process of digitalisation. “Most of the work is now paperless. It was a forced learning for many and was useful for organisation, given time saved and records being available,” added Mehrotra. Some of the practices like e-office, video-based meetings are likely to continue post-Covid.

RITES also found innovative substitutes for other challenges like physical inspections. “For imported items that our clients required, for which inspections were required in foreign shores, we hired local reputed agencies with quality accreditation to inspect (under our video supervision). We had to do this as there were international travel restrictions,” he added. So, backlog was cleared and customers did not face much delay, Mehrotra said.