RITES CMD: Looking to diversify operations in metros, airports, highways

New Delhi: Besides railways, state-run RITES Limited is looking to diversify its operations in metros, airports, highways and a few other sectors, its CMD (Chairman and Managing Director) Rajeev Mehrotra said analysts and investors at a post-Q3 FY2019-20 results conference call.

"Besides railways, I see good opportunities in metros, airports, and highways, in terms of volume… But otherwise, we are also looking at ports, inland waterways and our subsidiary REMCL has already got a mandate from the railway for renewable energy.
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One more area is the integrated check posts," Mehrotra said.

RITES looking at metro networks first: CMD

According to a regulatory filing submitted to the stock exchanges on March 13, when asked about how RITES is looking to diversify its operations beyond railways, the CMD said, "Well, I think I will take Metro first. Lot of metro projects have come to the bidding stage. I am told that about 13 tenders are already out either for detail designing or GC work, with the value aggregating to Rs 1,400 crore. We are participating in almost all of them either alone or in a consortium and even if we secure a reasonable portion, I think this would be a comfortable position in the metro sector opportunity."

"Similarly for airports, a major announcement of 100 new airports has been made. I think we are the largest consulting arm for Greenfield airports here and we would see to what extent we can garb these opportunities either solely or with other consultants, depending upon the assignments," the RITES CMD added. "Also, we are looking at highways, because the highway sector is also undergoing a very big expansion. We will see in what way we can get more involvement with the highways sector," he said.

RITES to close FY2019-20 with Rs 8,000-cr-strong order book

The CMD struck an optimistic note when he said that RITES is looking to close the financial year 2019-20 with a Rs 8,000-crore-strong order book on the basis of export orders worth around Rs 700 crore and the inflow of turnkey contracts.

"…we would start seeing the projects under this scheme coming February and March onwards. I hope to see a reasonable share in that. So, we still maintain optimism. I will say that we might end this March around Rs 8,000 crore, but then the entire turnkey execution would actually fall in 2021 and beyond," said Mehrotra.

The backdrop

The company's total revenue on a consolidated basis grew to Rs 663 crore as against Rs 583 crore in Q3 of FY2020, registering a growth of 13.9 percent year-on-year basis. The company's revenue from operations (ie excluding other income) has also grown by 15.9 percent to Rs 620 crore from Rs 535 crore in Q3 FY2020.

The operating profit of the company increased by 8.1 percent to settle at Rs 157 crore in Q3 of FY2020 in comparison to Rs 145 crore in Q3 FY2019. EBITDA and PAT grew by 4.7 percent and 10.5 percent, respectively, to settle at Rs 214 crore and Rs 150 crore.

The company's consolidated order book was at Rs 5,782 crore as of December 31, 2019. Gross order inflows on a standalone basis have remained at Rs 470 crore.