Rites Ltd. is looking forward to adding revenue from new export orders in the next financial year, subsequently improving its margin that had been under pressure, Chairperson Rahul Mithal has said.
The railway infrastructure and consulting firm has bagged an order worth roughly Rs 300 crore in Mozambique, Mithal told NDTV Profit in an interview.
The order is for locomotives, which takes nine to 12 months of time to manufacture. Hence, the revenue from this order is seen coming by the end of fiscal 2025, according to the managing director.
Rites has also bagged an L1 order to export 200 coaches, revenue from which is expected to kick in the latter half of the next fiscal, he said.
As far as the order in Zimbabwe is concerned, Mithal said Rites had been in touch with them and hopes to fructify the memorandum of understanding into an order deal.
Rites Chairperson Rahul Mithal (Source: company)
Rites Chairperson Rahul Mithal (Source: company)
The central public sector enterprise has received its first export order in four years in the October–December period. Export orders are the main source of revenue for the infrastructure consulting firm, which dried up during the pandemic years. "These export stream of revenue being a high-margin stream of revenue, I am sure we are going to recover the lost ground we've had this fiscal year," he said.
As of December, the company's total order book stood at Rs 5,496 crore. The company reported a flat revenue growth in the December quarter as export business declined 38% to Rs 58 crore compared to Rs 93 crore on a standalone basis in the year-ago period.
Rites' margin remained under pressure due to lower margin in its consultancy business and a higher revenue contribution from low-margin turnkey projects.
The company has also achieved its aim to become an order-a-day company during the quarter after securing more than 100 orders worth Rs 612 crore in the third quarter and is confident to continue the trend on a six-month or annual basis, according to Mithal.
These include Rs 288 crore worth of export orders, followed by Rs 270 crore of orders from consultancy, the company's largest revenue-generating segment.
Watch the full interview here:
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