RITES gets a $5.4 million contract from Ntokoto Rail Holdings

Transport infrastructure is the area of expertise for RITES Ltd, an engineering consultancy and public sector enterprise in India that was previously known as Rail India Technical and Economic Service Limited. A prominent participant in India’s transport consulting and engineering market, RITES is a Miniratna (Category-I) Schedule ‘A’ public sector organization with a wide geographic reach and a diverse range of services. The Indian government owned 72.20% of the business as of September 30, 2024.

RITES secured a $5.4 million order:

Ntokoto Rail Holdings has provided RITES with the Letter of Acceptance (LOA) for the supply and commissioning of refurbished in-service cape gauge ALCO diesel-electric locomotives. The locomotives will be outfitted with new cape gauge bogies, traction motors, control system air brakes, and other upgrades and will be overhauled at a specific facility. For a full year, on-site warranty support is also included in the agreement. The company stated in a press release on October 7, 2024, that the $5.40 million (Rs. 45 crore) contract would be executed in six months.

The RITES performance:

RITES’s consolidated net profit decreased by 24.37% from Rs 119.58 crore in Q1 FY24 to Rs 90.44 crore in Q1 FY25. In the quarter that ended on June 30, 2024, revenue from operations decreased 10.76% to Rs 485.76 crore from Rs 544.35 crore recorded in the first quarter of FY24.

Stock price of Rites Ltd:

The contract worth $5.4 million that Rites Ltd. received from an African rail company is the reason for the stock’s recent increase of more than 1% in the intraday segment, from Rs. 297.30 to Rs. 299.75 at its highest traded price.

Conclusion: Recently, RITES has secured several projects, including a Rs. 35.8 crore project from Tsiko Africa Logistics. Following this, the two parties inked a memorandum of understanding for the provision of services ranging from general consultancy to project management, detailed design, and feasibility studies, among other areas. Received the project worth Rs. 45 crore from Ntokoto Rail Holdings, an African company. The partnership intends to enter the urban transportation system market and provide top-notch solutions for both national and foreign projects. RITES is demonstrating through their routine work that they are capable of leaving a worldwide footprint.

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.