RITES Share Price Rose 13% After Appraisal in Northeast Railway Project

RITES share price saw a significant jump of 13% on Monday following the announcement of an increase in the project estimates for the Northeast Frontier Railway. The new project estimate is now ₹531.77 crore, up from the previous figure of ₹288.44 crore. This surge is a reflection of positive market sentiment, as experts believe the stock’s upward movement signals growing confidence in RITES’ ability to adapt to the new financial parameters.

RITES share opened at ₹288.05 on the Bombay Stock Exchange (BSE) on Monday. During the trading session, the stock reached an intraday high of ₹310 and an intraday low of ₹286.30, indicating strong investor interest and volatility in response to the news.

Project Details and Growth Prospects

The project in question involves the electrification of the LMG-BPB section of the Lumding division under the Northeast Frontier Railway, to be undertaken on a turnkey basis. With the new project estimates, RITES stands to gain a significant boost to its order book. Currently, the company’s order book totals ₹2,000 crore for the first half of FY25, with the new project contributing positively to future growth prospects.

RITES Financials Overview

Despite the stock’s positive movement, RITES has experienced a decline in performance for the September quarter, reporting a 25% drop in net profit. The company’s net profit stood at ₹82.5 crore, down from ₹110.2 crore during the same period in the previous year. Revenue for the quarter also decreased by 7.1%, reaching ₹541 crore, compared to ₹582.4 crore in the prior year.

Despite the decline in profits and revenues, RITES has secured over 90 new orders, including extensions, valued at more than ₹729 crore during Q2 FY25. As a result, the company’s order book remains strong, totalling ₹6,581 crore as of September 30, 2024. This signals RITES’ continued ability to secure contracts and maintain a solid pipeline for future growth.

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.