RITES (RITES) Q3 24/25 earnings summary

Executive summary

• Achieved a record order book of INR 8,000 crore (₹7,978 crore) as of December 31, 2024, with 110+ new orders totaling over INR 1,900 crore (₹1,933 crore) in Q3FY25, nearly matching the previous full year's total and tripling Q2 inflows.

• Q3 saw sequential improvement in revenue, EBITDA, and PAT, but year-over-year declines of 15%-16% in both revenue and profit.

• Board approved a third interim dividend of ₹1.90 per share for Q3FY25, totaling ₹4.90 per share for the nine months, and completed a 1:1 bonus share issue in September 2024.

• Signed MoUs for renewable energy QA services and rail connectivity, and opened offices in the Middle East to tap into IMEC corridor opportunities.

• Financials were reviewed by the Audit Committee and limited review reports were issued by independent auditors with no material misstatements noted.

Financial highlights

• Q3FY25 consolidated revenue was ₹614 crore, up 6.5% sequentially, but down year-over-year; PAT at ₹95 crore, down 19.9% year-over-year.

• Standalone revenue for Q3FY25 was ₹592 crore, up 6.9% sequentially; PAT increased to ₹95 crore, up 10.5% from Q2FY25.

• For the nine months ended December 31, 2024, consolidated revenue was ₹1,602.38 crore and net profit after tax was ₹282.33 crore.

• Margins moderated due to lower high-margin QA, consultancy abroad, and exports revenue.

• Other income included a one-time insurance claim settlement of ₹18.50 crore.

Outlook and guidance

• FY24 top line is expected to close with less than a 10% decline, and PAT with less than a 20% decline year-over-year.

• FY25 is targeted for at least 20% top line growth, with EBITDA margins around 20% and PAT margins at 15%-16%.

• Revenue and profit growth expected as new turnkey projects progress from design to execution; Q4 is projected to be the strongest quarter of the year.

• Export segment recovery delayed due to geopolitical factors, but future uptick anticipated.