**Rites** - Q4 FY20 (Audited –Cons)
CMP: 245
Total revenue from operations 570 Cr
737 Cr (-22.69%) YoY | 619 Cr (-7.91%) QoQ
Year ending revenue: 2,474 Cr Vs. 2,047 Cr (20.84%)
Net Profit of 143.9 Cr
150.3 Cr (-4.62%) YoY 150.04 Cr (-4.29%) QoQ
Year ending Net profit: 633 Cr Vs. 490 Cr (29.18%)
EPS (in Rs.) 5.56
5.81 YoY |5.86 QoQ
Year ending EPS: 24.64 Vs. 18.78
View: Average result and slightly below expectation. YoY and QoQ revenue and profit both have declined.
**Business Updates & Highlights**:
Q4FY20 EBITDA was around INR 163.5 Cr Vs. 181.7 Cr in Q4FY19 therefore declined by 10.1% in YoY. EBITDA margin is around 28.7% Vs. 24.6% in YoY.
FY20 EBITDA was around INR 661 Cr Vs. 576.2 Cr in FY19 therefore up by 14.7% in YoY. EBITDA margin in FY20 was around 26.7% Vs. 28.1% in FY19.
Company is primarily operating into three main segment viz. Consultancy (domestic) – 50%, Export sales – 10% and Turnkey construction – 29.8%. YoY topline growth for Consultancy (dom.) – 13%, Export sales – (42.8%) and Turnkey construction – (35%).
YoY bottom line growth for consultancy (dom.) – (8.3%), Export sales – (74%) and Turnkey construction – (47.5%)
The Company has signed shareholder agreement on 21st May, 2020 for acquiring 24% stake in Indian Railway Stations Development Corporation (IRSDC) for INR 48 crore (4.80 crore equity share of 10/- each), with Rail Land Development Authority (RLDA) and IRCON International being the other equity
Partners.
**The Board of Directors have proposed final dividend of INR 6 per share (face value of 10 per share) and further company has paid two interim dividends of 10.00 per share (face value of 10 per share) for financial year 2019-20**
**Financial**
ROE and ROCE is around INR 31.8% and 20% respectively and book value per share is around INR 166 and share is currently trading at 1.8x of its book value. Company is currently trading at annualized PE of 11 which is good as per Industry benchmark. Promoter holding (Govt. of India) is around 72% in the company which is strong but stable. FIIs and mutual fund hold around 2.9% and 4.9% in the company. Cash and cash equivalent from operating activities as of March 2020 is around INR 268 Cr Vs. 134 Cr as of March 2019 (**Very Positive**). The good thing is company is virtually debt free and realization is also fair.
Position: Share support price is INR 230. Long term investor should continue with the company.
**Share View**: Share price high 331 (52 week) and now 245. RITES Limited is an engineering consultancy company, specializing in the field of transport infrastructure. Established in 1974 by the Government of India, the company's initial charter was to provide consultancy services in rail transport management to operators in India and abroad.
Opportunities: RITES Limited is a Miniratna (Category-I) Schedule `A' Public Sector Enterprise and a leading player in the transport consultancy and engineering sector in India having diversified services and geographical reach. Margin improved and strong cash flow in YoY. Debt free company with monopolistic business. The Company has significant presence as a transport infrastructure consultancy organization in the railway sector.
Risk: Q1 and Q2 FY21 topline may also impacted due to ongoing pandemic.
Disclaimer: Views are shared based on market research and study and personal in nature. Others can take the different view and opinions. Please do the thoroughly study before enter or exit the shares.
RD Stock (“High Returns with Low Risk is the Key”)