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RITES Ltd Signed an MoU With the SAIL-Bokaro Steel Plant

30 October 20243 mins read by Angel One
RITES Ltd. shares surged 3% after signing an MoU with SAIL-Bokaro for rail connectivity, despite an 11% revenue dip to ₹486 crore in Q1FY25.
RITES Ltd Signed an MoU With the SAIL-Bokaro Steel Plant
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RITES Ltd. shares jumped over 3% today, on October 30 after the company announced a new MoU with SAIL-Bokaro Steel Plant (SAIL-BSL). This deal, backed by the Ministry of Steel, puts RITES in charge of strengthening rail connectivity at the plant in Jharkhand. They cover everything from engineering and surveying to project supervision and quality control, ensuring rail upgrades within the plant.

Why This MoU Matters

RITES’ involvement will help streamline logistics at SAIL-Bokaro, helping the plant operate more efficiently. The project includes work on both existing and new rail tracks, giving RITES a chance to show off its expertise in infrastructure consultancy. This partnership aligns with SAIL’s push to better its operations across its facilities.

Market Reaction & Financials

After the MoU news broke, RITES shares climbed to Rs.298.00, marking over a 2% jump from its previous close. The stock has outperformed the Nifty this year with a 21% gain, compared to Nifty’s 12%. In the past year, RITES shares have gained 31.

Despite the stock surge, RITES faced some bumps in Q1FY25. Revenue dropped 11% to Rs.486 crore from Rs.544 crore, while net profit fell 25% to Rs.90 crore. The dip was due to a big drop in export revenue and a Rs.25 crore shortfall from its Quality Assurance business with Indian Railways.

Expanding in UP

Adding to its recent orders, RITES also bagged a Rs.59.13 crore contract from UP State Bridge Corporation which spans 36 months and involves overseeing quality, safety, and supervision for infrastructure projects, including bridges and flyovers across multiple districts.

Conclusion: RITES’ order book has swelled to Rs.31,000 crore, including major export deals with Bangladesh and Mozambique. Looking ahead, management is focused on executing projects efficiently while aiming to secure Rs.3,000 crore in new orders each quarter, a promising outlook.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.

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