‘Expect breakthrough in Vande Bharat export efforts’
RAHUL MITHAL, Chairman and managing director, RITES
ABOUT ~350 CRORE OF OUR ORDER BOOK WILL FIGURE IN OUR TOP LINE IN THE NEXT 2 QUARTERS
As it recovers to pre-covid growth levels, Rail India Technical and Economic Service (RITES) — the Centre’s infrastructure consultancy utility — is looking to expand its international footprint, both in consultancy and exports. RITES Chairman and Managing Director RAHUL MITHAL tells Dhruvaksh Saha about his plans for 2022-23 (FY23) and the challenges ahead.
Edited excerpts:
Infrastructure is a core priority under the Centre’s economic growth plan. How is it auguring for RITES?
Our target for 2021-22 was to hit pre-covid levels. We have done that, both in terms of top line and bottom line, which is about 7-8 per cent higher. Based on fourthquarter trends and April, with respect to domestic and international consultancy orders across Metros, railways, and highways, I see growth in consultancy. FY23 is going to be focused on growth in consultancy, especially international projects.
After Covid-19, your export revenue and margins have gone up significantly. How does your current order book look?
Currently, we have an order book balance of ~400 crore. About ~350 crore of it will figure in our top line in the next two quarters. For fresh orders, the work process has started. We are pursuing leads across Africa, Southeast Asia, Central Asia, and Europe. The catch in exports is that it’s a long-lead revenue-realisation sector. We are aiming to get some orders in the next two quarters. Their maturity into revenue could spill over into the first quarter of the next fiscal year (2023-24).
Since turnkey projects have reduced margins set against exports, the overall margins will be under stress since the contribution of turnkey projects will be much higher. However, we will balance them through growth in consultancy — both domestic and international.
Vande Bharat trains to a number of countries and asking them to take a trial order for at least one rake. We have got an enthusiastic response because it’s a world-class, costcompetitive product.
When can we see Vande Bharat trains exported?
A number of countries have evinced an interest, especially Latin American countries. We have asked them to try one or two rakes on a trial basis to get product experience. I am sure they’ll end up buying more from us. Wherever there is electrification and intercity travel, we are pursuing the same. I see some breakthroughs in the months ahead.
It’s premature to speculate in terms of a hard timeline for fruition.
Currently, we are trying to evoke interest. All these countries we’ve pitched to have established products in the sector. At an entrylevel, we have seen interest in capacity and cost-competitiveness of the product. Once a country places an order for a rake, word spreads and we can leverage that to get more orders in the next few years.
Apropos of the Russia-ukraine offensive and the Sri Lankan crisis, could exports see a downside risk?
From the last lot of coaches and diesel electric multiple units exported to Sri Lanka, we are expecting a revenue of close to ~100 crore. We have had discussions at the highest level. We don’t foresee any problems since the shipments have reached their port.