Full Steam Ahead: RITES CMD Charts Global Course with Exports and Bold Diversification

Full Steam Ahead: RITES CMD Charts Global Course with Exports and Bold Diversification

 

Navratna public sector transport and engineering consultancy firm RITES Ltd is focusing very heavily on exports and diversification to fuel top-line growth in the next two years, Chairman and Managing Director Rahul Mithal said. While the company reported a 4.3% year-on-year decline in consolidated operating revenue to ₹615 crore in the March quarter of FY25, it registered a 3.4% increase in net profit to ₹141 crore.

 

Mithal explained the revenue decline as a decline in rolling stock exports due to a quiet period of fresh orders from historical African and South Asian markets both during and post-pandemic. The Quality Assurance (QA) segment also experienced margin pressure following Indian Railways' first-time opening of QA contracts to four players.

 

But export orders have picked up, with RITES bagging one export order in every quarter of FY25. The export order book of the company stands at ₹1,360 crore as on March 31, 2025, with major-ticket orders like a ₹900 crore Bangladesh order for 200 passenger coaches, a ₹300 crore Mozambique order for 10 locomotives, and approximately ₹150 crore orders in South Africa for three contracts for three locomotives each. These export orders normally take 15-24 months to materialize into revenue, and the effect would be witnessed from FY26.

 

To counter the difficulties in the QA business, RITES forayed into new areas like renewables (solar), PM Vishwakarma Yojana, power transmission and distribution, Jal Jeevan Mission, Public Health Engineering Departments, vendor testing through GeM, Independent Safety Assessment, and foreign assignments. RITES has also diversified into high-margin local consultancy assignments to counter the fall in operating revenue and profits. RITES ended FY25 with an all-time high order book of ₹8,877 crore, having picked up more than 500 orders aggregating ₹5,500 crore on its books in the year. Mithal added, "This two-pronged conscious business strategy of improved execution and forward-looking order inflows has given us the platform to aim for an all-time high revenue in FY26. We will also maintain our strike rate of 1 order per day intact and get incremental export orders."

 

Source: Business Standard