RITES Ltd is looking to tap export markets primarily the African nations. Successful rolling stock deliveries to Mozambique, for customised cape gauge offerings - that include locomotives, coaches and DMUs, have generated interest across neighbouring nations.
At least 11 African nations, apart from Mozambique, have expressed interest for orders already while Mozambique is looking to place further orders.
According to Rahul Mithal, Chairman and Managing Director, RITES, the company is expecting export orders to materialise towards the “latter half” of the fiscal.
“Discussions are on with African nations, and these may formalise over the next few weeks or so. By the latter half of this fiscal, we are expecting export orders to pick up and drive numbers apart from our core consultancy business,” he told businessline.
RITES has an order book of ₹5,850 crore as on April 1, 2023. Of this consultancy orders are to the tune of ₹2,700 crore, turnkey project orders are ₹2,850 crore, leasing is around ₹100 crore while export order is ₹100 crore.
Post completion of deliveries to Sri Lanka and Mozambique and a two-year hit in exports because of Covid, RITES is looking to tap into the overseas market again.
The successful delivery of cape gauge rolling stock – of 1067 mm - which is used in Mozambique has given the company an edge across African markets which use similar offerings.
“Most of these African markets are now coming out of Covid and are pushing for infrastructure investments in their countries. As funding issues are worked out, orders will start coming in,” he said, adding that with “export business picking up, a scale down of the turnkey businesses will happen”.
According to Mithal, the consultancy vertical will continue to be among its core businesses.
And in FY24, RITES will look at having nearly 50 per cent of its revenue from the vertical. International markets are being tapped too that include markets in South-East Asia, LatAm and Africa. International consultancy business has a 5-7 per cent higher margin than domestic.
Revenue from international consultancy orders - of ₹150 crore-odd - saw a 50 per cent jump YoY in FY23.
“At least 50 per cent of the turnover will be from the consultancy business. In the vertical too, we will look at high margin businesses,” Mithal said.