Rites Ltd

Money Times - - Market Outlook / Techno Funda - By Nayan Pa­tel

(BSE Code: 541556) (CMP: Rs.228.70) (FV: Rs.10)

In­cor­po­rated in 1984, Rites Ltd to­gether with its sub­sidiaries pro­vides con­sul­tancy ser­vices in the fields of trans­port, in­fra­struc­ture and re­lated tech­nolo­gies. It op­er­ates in four seg­ments: Con­sul­tancy Ser­vices; Turnkey Con­struc­tion Projects; Ex­port of Rolling Stock, Equip­ment and Spares; and Leas­ing of Rail­way Rolling Stock and Equip­ment. It of­fers ser­vices as con­sul­tants, en­gi­neers and project man­agers in the ar­eas of rail­ways, high­ways, air­ports, ports, rope­ways, ur­ban trans­port and in­land wa­ter­ways. It is also in­volved in third party in­spec­tion, qual­ity as­sur­ance, con­struc­tion su­per­vi­sion and project man­age­ment, oper­a­tion and main­te­nance, leas­ing and ex­port of rolling stock; and pro­vi­sion of rail­way work­shops mod­ern­iza­tion ser­vices. In ad­di­tion, it gen­er­ates power from wind mills and so­lar en­ergy plants; man­u­fac­tures and re­ha­bil­i­tates wag­ons; and un­der­takes civil con­struc­tion work. Fur­ther, it of­fers ser­vices in var­i­ous sec­tors such as ar­chi­tec­ture and plan­ning, bridges and tun­nel engi­neer­ing, en­vi­ron­men­tal/ur­ban engi­neer­ing, elec­tri­cal engi­neer­ing, fi­nan­cial man­age­ment, geo-tech­nol­ogy, in­dus­trial engi­neer­ing, in­for­ma­tion tech­nol­ogy, marine engi­neer­ing, ma­te­ri­als sys­tem man­age­ment, pri­va­ti­za­tion and con­ces­sion projects, rail­way elec­tri­fi­ca­tion, rolling stock de­sign, sig­nal and telecom­mu­ni­ca­tion, sur­veys and train­ing pro­grams. It serves gov­ern­ments, pub­lic sec­tor un­der­tak­ings, cor­po­ra­tions and in­dus­trial es­tab­lish­ments, pri­vate en­ter­prises and other or­ga­ni­za­tions. Rites has an eq­uity cap­i­tal of Rs.200 crore sup­ported by re­serves of Rs.2006.16 crore. The pro­mot­ers (Govern­ment of In­dia) hold 87.4% of the eq­uity cap­i­tal, which leaves 12.6% stake with the in­vest­ing pub­lic. For FY18, Rites re­ported PAT of Rs.348.34 crore on sales of Rs.1502.84 crore and an EPS of Rs.17.42. Dur­ing Q1FY19, it re­ported 18% higher PAT of Rs.82.05 crore on sales of Rs.310.04 crore and an EPS of Rs.4.1. It paid 20% div­i­dend for FY18.

The stock trades at a P/E of 13x and looks at­trac­tive at the cur­rent level based on its fi­nan­cial pa­ram­e­ters. In­vestors can buy this stock with a stop loss of Rs.214. On the up­per side, it could zoom to Rs.320-325 in the long-term.

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