Axis Securities has hold call on Rites Ltd. with a target price of Rs 315.0. The current market price of Rites Ltd. is Rs 299.95 Time period given by analyst is one year when Rites Ltd. price can reach defined target.
Rites Ltd., incorporated in the year 1974, is a Mid Cap company (having a market cap of Rs 7263.12 Crore) operating in Services sector.
Rites Ltd. key Products/Revenue Segments include Sale of Products, Consultancy Income, Turnkey Project, Other Services, Lease Rentals, Export Incentives and Other Operating Revenue for the year ending 31-Mar-2022.
For the quarter ended 30-06-2022, the company has reported a Consolidated Total Income of Rs 636.71 Crore, down -19.15 % from last quarter Total Income of Rs 787.52 Crore and up 68.77 % from last year same quarter Total Income of Rs 377.26 Crore. Company has reported net profit after tax of Rs 144.19 Crore in latest quarter.
Investment Rationale
The company ensured robust execution in FY22 as the business environment improved post-removal of Covid restrictions and vaccination drive. Moreover, several improvements in its overseas business environment resulted in higher export sales during the year. The company achieved the highest-ever revenue in exports and foreign consultancy while achieving higher overall profits owing to superior execution and stringent resource management. With excellent order book position, the company's efficient execution prowess, better traction in major business verticals, and a clean balance sheet, it expects RITES Revenues/EBITDA/APAT to grow at 7%/4%/9% CAGR respectively over FY22-24E. However, the recent appreciation in stock price leaves with limited upside and hence it changes rating from BUY to HOLD. It values the company at 12.5x FY24E EPS to arrive at a target price of Rs 315 /share (Rs 295/share earlier), implying an upside of only 5% from the CMP.
Promoter/FII Holdings
Promoters held 72.2 per cent stake in the company as of 30-Jun-2022, while FIIs owned 1.48 per cent, DIIs 17.26 per cent.
Rites Ltd., incorporated in the year 1974, is a Mid Cap company (having a market cap of Rs 7263.12 Crore) operating in Services sector.
Rites Ltd. key Products/Revenue Segments include Sale of Products, Consultancy Income, Turnkey Project, Other Services, Lease Rentals, Export Incentives and Other Operating Revenue for the year ending 31-Mar-2022.
Financials
For the quarter ended 30-06-2022, the company has reported a Consolidated Total Income of Rs 636.71 Crore, down -19.15 % from last quarter Total Income of Rs 787.52 Crore and up 68.77 % from last year same quarter Total Income of Rs 377.26 Crore. Company has reported net profit after tax of Rs 144.19 Crore in latest quarter.
Investment Rationale
The company ensured robust execution in FY22 as the business environment improved post-removal of Covid restrictions and vaccination drive. Moreover, several improvements in its overseas business environment resulted in higher export sales during the year. The company achieved the highest-ever revenue in exports and foreign consultancy while achieving higher overall profits owing to superior execution and stringent resource management. With excellent order book position, the company's efficient execution prowess, better traction in major business verticals, and a clean balance sheet, it expects RITES Revenues/EBITDA/APAT to grow at 7%/4%/9% CAGR respectively over FY22-24E. However, the recent appreciation in stock price leaves with limited upside and hence it changes rating from BUY to HOLD. It values the company at 12.5x FY24E EPS to arrive at a target price of Rs 315 /share (Rs 295/share earlier), implying an upside of only 5% from the CMP.
Promoter/FII Holdings
Promoters held 72.2 per cent stake in the company as of 30-Jun-2022, while FIIs owned 1.48 per cent, DIIs 17.26 per cent.
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