RITES to benefit from infrastructure allocations in Budget 2022, CMD Rahul Mithal tells Anil Singhvi; emphasis now growing on exports

State-run RITES Ltd will benefit from the Budget 2022 allocations directly Chairman and Managing Director Rahul Mithal tells Zee Business Managing Editor Ani Singhvi. The CMD said that according to company's analysis, the direct benefits will come from Rs 5 lakh cr allocations made to road, railways, Jal Shakti and housing and urban development sectors. 

The company has significant business interests in all these sectors, he further said.

The CMD said that the company has an orderbook worth Rs 5100 cr. Out of which, Rs 675 cr accounts for exports, he said. Rs 250-275 cr worth exports will be over by the end of this financial year while the balance will be transferred for the next FY, he further said. 

It also has a Rs 2200 cr consultancy order and Rs 2000 cr turnkey projects. It has recently got a consultancy project for Bahrain Metro and is also doing consultancy on Bangladesh roadways projects, he added.

Mithal said this while speaking with Zee Business Managing Editor Anil Singhvi in a TV show ‘News Par Views' where he expressed his view and said that the company's margins are at its pre-covid level.  
 
Talking about the margins, the chairman said margins have decreased slightly from Q2 to Q3. Actually,  one of our locomotives which was being exported to Muzambi met with an accident in the port. We have made a provision of 15 crores for its damage. But this is the reason of slight reduction in the margin.

He also said that our base line margin is 19-20 and we are trying to reach that level. If we compare our expected base line margin with Q3 or even from 9 months, then 24%-25% margin levels are on same percentage.  
But the company's margins are at its pre-covid level, he added.

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Results

The results of RITES Limited came yesterday late evening after the market closed. It was a very good result. Income has increased to 70%, working profit increased by 47% that means 133 crores to 195 crores but margins are decreasing from 29% to 25%, a drop of 4%. Apart from that profit increased from 105% to 144% that means a increase of 36%-37%.

RITES Limited - About the company

RITES is a leading multi-disciplinary engineering & consultancy organization providing customized solutions in transport & infrastructural sector. It is a government Railways company which was started in 1974. It was formerly Known as Rail India Technical and Economic Service Limited.