Q4 2024 RITES Ltd Earnings Call Transcript
Key Points
- RITES Ltd (BOM:541556) secured two significant export orders worth INR 1,200 crores from Mozambique and Bangladesh, marking a return to export orders after four years.
- The company successfully diversified its Quality Assurance (QA) business, reducing dependency on Indian Railways (IR) from two-thirds to about 50% non-IR clients.
- Project consultancy revenue saw a substantial 10% year-on-year increase, reaching an all-time high of INR 1,300 crores.
- RITES Ltd (BOM:541556) maintained a trend of being a one-order-a-day company, securing 100+ orders totaling INR 940 crores in Q4.
- The company achieved a significant milestone by completing 50 years and attaining Navratna Status, indicating strong and sustained growth.
- Margins in the QA and consultancy business are under pressure due to increased competition and the shift from nomination to competitive bidding.
- Export orders, while significant, have tighter margins due to global tender competition, making it challenging to maintain historical margin levels.
- The company faces execution challenges with the new export orders, particularly with the longer production cycles for locomotives.
- Turnkey projects have lower margins, ranging from 3% to 4%, which could impact overall profitability.
- The leasing business, despite growth opportunities, is facing increased competition, potentially affecting future margins.
Ladies and gentlemen, good day, and welcome to the RITES Limited Q4 and FY24 earnings conference call hosted by Elara Securities Private Limited. (Operator Instructions) Please note that this conference is being recorded.
I now hand the conference over to Mr. Mudit Kabra from Elara Securities. Thank you, and over to you, sir.
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Thank you, [Steve]. Good morning, everyone. On behalf of Elara Securities, we welcome you all for the Q4 FY24 and FY24 earnings conference call of RITES Limited. I take this opportunity to welcome the management of RITES represented by Shri Rahul Mithal, Chairman and Managing Director; Shri Arun Kumar Singh, Director Projects; Dr. Deepak Tripathi, Director, Technical; and Shri Krishna Gopal Agarwal, Director of Finance. We will begin the call with a brief overview by the management, followed by a Q&A session.
I'll now hand over the call to Rahul sir for his open remarks. Over to you, sir.
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