RITES (RITES) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 was challenging due to execution delays in infrastructure projects across multiple geographies, mainly impacted by weather and local factors, but sequential revenue grew 16.5% over Q1FY25, supported by a strong order book of over ₹6,580 crore and 90+ new orders worth over ₹700 crore.

• Launched VISTAR, an AI-powered rail inspection solution, and signed MoUs with Etihad Rail, NBCC, HUDCO, and NHAI for consultancy and project management.

• Issued bonus shares (1:1) and declared a second interim dividend of ₹1.75 per share for Q2FY25.

• Board approved unaudited standalone and consolidated results for the quarter and half year ended 30 September 2024.

Financial highlights

• Q2FY25 consolidated operating revenue fell 7.1% year-over-year to ₹541 crore; standalone revenue also declined 7.1% to ₹549 crore.

• Q2FY25 consolidated PAT dropped 26% year-over-year to ₹107 crore; standalone PAT fell 27.8% to ₹80 crore.

• H1FY25 consolidated operating revenue declined 8.9% year-over-year to ₹1,027 crore; PAT decreased 30% to ₹195 crore.

• EBITDA margin for Q2FY25 was 19.5% (standalone), PAT margin 15.5%; H1FY25 standalone EBITDA margin was 18.9%, PAT margin 14.7%.

• Revenue and profit declines attributed to lower Quality Assurance, consultancy abroad, and exports.

Outlook and guidance

• H2 expected to see improved execution, especially in Q3 and Q4, aiming to match or come close to previous FY revenue.

• FY26 projected to deliver double-digit top-line growth, driven by export order execution and continued growth in consultancy and turnkey segments.

• Export revenue to start contributing significantly from early FY26, with a substantial chunk of the INR 1,300 crore export order book to be executed within 18-20 months.

• Export segment recovery expected by end of FY25 as locomotive supply resumes.