RITES Q3 Results Review – Focus On Improving Margins: IDBI Capital


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RITES Ltd.’s Q3 FY23 profit after tax came in line with our/consensus estimates. Though, revenue has declined by 13% YoY in Q3 but Ebitda margin was high at 28.5% versus 25.3% YoY.

In FY23E, company is planning to grow revenue in line with previous years and it will be more focused toward Ebitda and profit after tax margin expansion.

RITES’ order book at Rs 55 billion provides revenue visibility but earnings growth to driven by margin expansion, which is dependent upon efficiencies in turnkey execution and consultancy for sector other than railway.

Stock offers dividend yield of 5%, year-to-date FY23 dividend declared is Rs 14.5/share (FY22 dividend per share Rs 17).

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