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    Rites

    RITES
    Construction·20 May 2026
    Management Summary

    RITES Limited reported a strong Q4 and full-year FY26, achieving its highest-ever order book of INR 9,416 crore and a significant revival in export income. The company is poised for substantial revenue growth in FY27, driven by a young order book and diversified segments. While new competitive orders may lead to some margin compression, management is committed to maintaining PAT margins above 15% and EBITDA margins above 20%. The subsidiary REMC Ltd also showed robust growth and diversification into renewable energy and international markets.

    Highlights

    5

    • FY26 performance aligned with roadmap, aiming for double-digit growth and profit growth.

    • Export income broke INR 300 crore after two years, a significant milestone.

    • Highest-ever order book of INR 9,416 crore as of March 31, 2026, providing strong revenue visibility.

    • Q4 FY26 saw high execution of over INR 750 crore.

    • REMC Ltd demonstrated strong growth with 16% revenue and 19% profit increase, contributing INR 42 crore dividend to RITES.

    Concerns

    3

    • Margins on new competitive orders are lower, expected to temper overall margins as they contribute to revenue.

    • Profits are not expected to break all-time high records in FY27, with management projecting 2-3 years for this achievement.

    • Turnkey revenue was lesser by INR 200 crore compared to the previous year, though recovery is expected in FY27.

    Key financials

    Metrics

    7

    Periods

    2

    Headline

    6
    • Consultancy Revenue
      ₹1,185 Cr
    • Overall Consultancy Growth
      6%
    • QA Business Growth
      16%
    • REMC Ltd Revenue
      ₹163 Cr
      YoY+16%
    • REMC Ltd Profit
      ₹90 Cr
      YoY+19%

    Q4 FY26

    1
    • Execution
      ₹750 Cr

    Order Book

    high confidence

    Total Value

    ₹ 9,416 crores

    as of 2026-03-31

    quantified

    Execution

    A substantial portion, more than 50% of the order book is young (12 to 18 months old) and will start generating revenue in FY27. Infrastructure projects typically have a 3-4 year span, with significant revenue generation in the second and third years.

    Composition

    Mix2 contract types
    • Competitive Orders63.0%
    • Fresh Competitive Order Inflow70.0%

    Share of order book by contract type · partial disclosure (133.0% of book)

    "The order book profile has shown a substantial upward swing over the last 18 months, with over 50% of the current INR 9,416 crore order book being young and poised to generate revenue in FY27. The export order book is at an all-time high of INR 1,700+ crore, with significant execution expected from Bangladesh coaches and converted locomotives."

    Source:
    Prepared remarks

    Capital allocation

    1
    high confidence
    CategoryHeadline
    Liquidity

    Liquidity disclosed

    The company's working capital requirement is barely minimal, and its business model as a consultant means there will not be a significant impact on working capital.

    Guidance & targets

    9
    CategoryTargetPriority
    Revenue
    Revenue Growth
    double-digit growth
    		High
    Revenue
    Export Revenue
    much higher than INR 300 crore
    		Medium
    Revenue
    Total Revenue
    break the records of our revenue. All-time high revenue
    		Medium
    Profitability
    Profit Growth
    grow
    		High
    Profitability
    Net Profit (All-time high)
    break those records
    		Medium
    Margins
    PAT Margin
    15%
    		High
    Margins
    EBITDA Margin
    20%
    		High
    REMC Ltd
    International Consultancy Order
    first international consultancy order
    		High
    Turnkey Revenue
    Turnkey Revenue Levels
    at least the turnkey revenue levels of last year
    		High

    Bangladesh Coach Delivery

    Next two months (Q1 FY27)
    CurrentPrototypes approved, production started, finishing stage.
    TargetFirst rake (20 coaches) dispatched.

    Why it matters

    This is a key trigger for significant export revenue acceleration and will provide a clearer picture of FY27 export execution potential.

    So, the first rake should go in about two months' time. And with that, once the first rake goes, we should be able to maximize as many rakes, with gaps of at least three-four rakes minimum in this FY.

    How to verify

    order_book.execution.timeline_description

    Risks & concerns

    3
    RiskSeverity

    Margin compression due to higher proportion of lower-margin competitive orders.

    New competitive orders (63% of order book, 70%+ of fresh inflow) have lower margins, which will dilute overall profitability as they generate revenue, though management aims to maintain minimum PAT (15%) and EBITDA (20%) margins. — Management acknowledged

    medium

    Inability to break all-time high profit records in FY27.

    Despite aiming for all-time high revenue, the lower margins on new orders mean surpassing previous profit records will likely take 2-3 years, rather than in the immediate FY27. — Management acknowledged

    low

    Potential impact of geopolitical headwinds and government CapEx slowdown on project execution and fresh orders.

    Management believes its diversified order book across various domains (railways, PSUs, private sidings, highways, ports, airports) insulates it from significant impact on consultancy services or fresh order inflow. — Analyst downplayed

    low

    Q&A highlights

    8

    “So, as these new orders generate more revenue in the mix of the total revenue, the margins will go down. Yes, but as we have been giving guidance that the red line of PAT margins 15% and EBITDA margins of 20%, that in no condition will we allow that to be breached by suitably monitoring the high-margin orders.”

    Clarifies that while new orders have lower margins, management has a floor for overall profitability and a strategy to maintain it.

    asked by Parimal Mithani

    2 min read7 chapters

    Detailed Narrative

    01

    Strong FY26 Performance and Record Order Book

    RITES concluded FY26 with performance aligned to its roadmap, achieving double-digit growth in revenue and profit. The company recorded its highest-ever order book of INR 9,416 crore as of March 31, 2026, with significant execution of over INR 750 crore in Q4 FY26. This strong foundation positions RITES for substantial disruptive growth in the coming fiscal year (FY27).

    02

    Export Segment Revival and Outlook

    The export segment saw a significant milestone, breaking INR 300 crore in income in FY26 after a two-year gap. The export order book stands at an all-time high of INR 1,700+ crore. Management expects this to generate much higher revenue in FY27, driven by the imminent delivery of the first rake of 20 Bangladesh coaches within two months and the export of converted diesel locomotives to African countries, with prototypes for the first two ready.

    03

    Margin Management Strategy Amidst Competitive Orders

    While new competitive orders, comprising 63% of the current order book and over 70% of fresh inflows, carry lower margins, RITES is committed to maintaining overall profitability. The company has set a 'red line' to ensure PAT margins do not fall below 15% and EBITDA margins below 20% by strategically monitoring high-margin orders. Despite this, profits are not expected to break all-time high records in FY27, with a target of 2-3 years for this achievement.

    04

    Consultancy Business Diversification and Growth

    The overall consultancy business grew 6% YoY, with the Quality Assurance (QA) vertical showing a 16% increase, recovering to its 2023-2024 revenue levels. Total consultancy revenue for FY26 was INR 1,185 crore across 13 verticals. Notably, the QA business has diversified, with the non-Indian Railways element now constituting over 60%, reversing the previous 55% IR-centric mix, indicating successful strategic repositioning.

    05

    Turnkey Project Execution and Revenue Recovery

    The turnkey order book of INR 4,580 crore, with approximately two-thirds being 'young' (1-2 years old), is expected to start generating substantial revenue in FY27. Management anticipates recovering to at least last year's turnkey revenue levels in the current fiscal year, driven by projects like IITs, IIMs, building vertical, and rail infra siding projects, which are now entering their revenue-generating phases.

    06

    REMC Ltd's Strategic Expansion Beyond Railways

    RITES's subsidiary, REMC Ltd, reported a robust 16% revenue growth and 19% profit growth in FY26, contributing INR 42 crore in dividends to RITES. Recognizing the near 100% electrification of the Indian railway system, REMC Ltd is actively diversifying into renewable energy consultancy for various clients and pursuing international orders, with the first international consultancy order expected in FY27, ensuring continued growth.

    07

    Asset-Light Model and Risk Mitigation

    RITES emphasizes its project management consultancy model, which results in minimal working capital requirements and insulates it from raw material cost fluctuations, as its fees are a percentage of infrastructure cost. The company foresees no major execution risks across its 13 infrastructure verticals, and its diversified order book across various government and private sectors mitigates risks from potential macro headwinds🌐 or CapEx slowdowns.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.