This article first appeared on GuruFocus .
Release Date: February 05, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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RITES Ltd ( NSE:RITES ) reported a strong order book, reaching an all-time high of 9,262 crores, with expectations to reach 10,000 crores by Q1 FY27.
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The company maintained a high order intake rate, averaging 1.5 orders per day, with significant contributions from both domestic and international markets.
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RITES Ltd ( NSE:RITES ) achieved a sequential growth of 10% in operating revenue and 5% in EBITDA, maintaining strong margins of 24% EBITDA and 18% PAT.
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The export segment showed promising growth, with a significant order book of 1,700 crores, expected to contribute to top-line expansion in FY27.
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The consultancy segment maintained healthy margins at 35.4%, contributing positively to the overall profitability of the company.
Negative Points
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Turnkey margins were significantly lower at 1.3%, which could impact overall consolidated PBT margins as these projects scale up.
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The export margins have tightened due to competitive bidding, stabilizing at around 13.5%, which is lower than historical levels.
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There is a risk of margin compression in the consultancy segment due to high competition, which could affect future profitability.
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The execution of turnkey projects has been slower than expected, with a decline in revenue over the last three quarters.
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The company faces challenges in maintaining high margins in nomination orders due to increased negotiations and competitive pressures.
Q & A Highlights
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Q: With consultancy margins at 35.4% and turnkey margins at 1.3%, what structural changes are being made to ensure overall consolidated PBT margin stability as turnkey projects scale up? A: (Chairman and Managing Director) We maintain a blended revenue mix strategy, fine-tuning the execution of over 700 live orders to maintain our target of 20% EBITDA margins. This involves strategic quarterly planning to balance the mix of consultancy, export, and turnkey orders.
Q: What is the outlook for export margins, and what challenges do you foresee in the export business? A: (Chairman and Managing Director) Export margins are expected to stabilize around 13.5% due to competitive global tenders. The challenge is to secure more international orders on a competitive basis rather than relying solely on line of credit-funded projects. Our international order book is at an all-time high, indicating growth potential.
Q: Can we expect significant topline expansion in Q1 FY27 due to export order revenue booking? A: (Chairman and Managing Director) Yes, with a young order book, including fresh export and turnkey orders, we anticipate continuous sequential growth in both top and bottom lines, starting from Q1 FY27.
Q: What is the execution timeline for the $1,900 crore export order book, and are the margins sustainable at 12-13%? A: (Chairman and Managing Director) The execution timeline for these orders is typically 2-3 years. The margins are sustainable at 12-13% due to competitive bidding. The Mozambique order, for example, is expected to complete by early FY27.
Q: How do you view the future of the RMCL business with Indian railway electrification nearing completion? A: (Chairman and Managing Director) RMCL is benefiting from increased consultancy work due to electrification and traffic. It is also exploring international consultancy opportunities in renewable energy, contributing to its growth in revenue and profitability.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
