RITES says international orders maintained revenue in FY24
ECONOMY & POLICY

RITES says international orders maintained revenue in FY24

RITES was able to control the loss in its net profit because of a practical response to issues at the start of the financial year, according to CMD Rahul Mithal of RITES. Due to a decline in sales, state-owned RITES Ltd. recorded a slight decline in its consolidated net profit for the March quarter, amounting to Rs 1.36 billion. The company stated in an exchange filing that it had posted a profit of Rs 1.38 billion for the year-ago period. Mithal mentioned that the biggest impact in 2023?24, the challenges that were foreseen at the beginning of the financial year itself, were the export of rolling stock and the order book at the Rs 1 billion level. He explained that they hadn't received any orders for about four years?during COVID and post-COVID. Another challenge for the company, according to Mithal, was the QA, or quality assurance, stream of business. He described QA as a very good margin stream that they had been doing for over four decades, with two-thirds of the portion of quality assurance revenue coming from Indian Railways as a client. He noted that last financial year, Indian Railways divided the tendering process into four players, and RITES was one of them. Mithal emphasised that these challenges were very clear, and they had to take them head-on to mitigate the impact. He mentioned that the first was to get an export order at the earliest, and where they managed to have a breakthrough, RITES obtained two export orders: Rs 3 billion from Mozambique and Rs 9.00 billion from Bangladesh. He highlighted that both of these orders not only broke the gap of over four years but also, for the first time ever, they bagged those orders through global competitive bidding. Currently, RITES' order book consists of over 50% non-Railways? contracts, a shift from one-third Indian Railways? order at the beginning of the fiscal. Mithal stated that their efforts started getting through, adding that the company intends to maximise the project consultancy revenue to mitigate the impact of other streams of revenue. He noted that the project consultancy revenue witnessed a 10% growth year over year, and the overall consultancy revenue on a consolidated basis was the highest ever this financial year at about Rs 13 billion. Mithal further added that of all the things that they started the financial year with, they moved in the right direction sequentially, which has given them the encouraging trend that they can build upon this platform for this financial year. The company's total income fell to Rs 6.67 billion in the January?March period from Rs 7.05 billion in the same period a year ago.

RITES was able to control the loss in its net profit because of a practical response to issues at the start of the financial year, according to CMD Rahul Mithal of RITES. Due to a decline in sales, state-owned RITES Ltd. recorded a slight decline in its consolidated net profit for the March quarter, amounting to Rs 1.36 billion. The company stated in an exchange filing that it had posted a profit of Rs 1.38 billion for the year-ago period. Mithal mentioned that the biggest impact in 2023?24, the challenges that were foreseen at the beginning of the financial year itself, were the export of rolling stock and the order book at the Rs 1 billion level. He explained that they hadn't received any orders for about four years?during COVID and post-COVID. Another challenge for the company, according to Mithal, was the QA, or quality assurance, stream of business. He described QA as a very good margin stream that they had been doing for over four decades, with two-thirds of the portion of quality assurance revenue coming from Indian Railways as a client. He noted that last financial year, Indian Railways divided the tendering process into four players, and RITES was one of them. Mithal emphasised that these challenges were very clear, and they had to take them head-on to mitigate the impact. He mentioned that the first was to get an export order at the earliest, and where they managed to have a breakthrough, RITES obtained two export orders: Rs 3 billion from Mozambique and Rs 9.00 billion from Bangladesh. He highlighted that both of these orders not only broke the gap of over four years but also, for the first time ever, they bagged those orders through global competitive bidding. Currently, RITES' order book consists of over 50% non-Railways? contracts, a shift from one-third Indian Railways? order at the beginning of the fiscal. Mithal stated that their efforts started getting through, adding that the company intends to maximise the project consultancy revenue to mitigate the impact of other streams of revenue. He noted that the project consultancy revenue witnessed a 10% growth year over year, and the overall consultancy revenue on a consolidated basis was the highest ever this financial year at about Rs 13 billion. Mithal further added that of all the things that they started the financial year with, they moved in the right direction sequentially, which has given them the encouraging trend that they can build upon this platform for this financial year. The company's total income fell to Rs 6.67 billion in the January?March period from Rs 7.05 billion in the same period a year ago.

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