1. At a Glance
RITES is that rare PSU uncle who wakes up early, pays dividends on time, has zero bad habits (read: no debt), but also refuses to go to the gym for growth. Market cap sits at ₹10,715 Cr, stock chilling around ₹223, down ~7% in three months, because the market hates boredom more than bad news.
Q3 FY26 came in with consolidated revenue of ₹635 Cr and PAT of ₹115 Cr. Respectable, not party-worthy. Operating margin hovered around 23–25%, which is solid for a consultancy + EPC hybrid. Dividend addicts were rewarded again with a ₹1.90/share third interim dividend, because RITES believes cash is meant to be distributed, not reinvested aggressively.
ROCE of ~22% looks sexy on paper. ROE at ~15% is decent. P/E at ~26x? That’s where investors squint and ask: “For this growth?”
The real flex remains the order book — ₹9,262 Cr as of Q3 FY26 — which is nearly 4x annual revenue. Sounds great. But here’s the meme: order book is fat, execution is… slow.
So what is RITES today?
A high-margin, low-growth, dividend-first PSU with global rail swag and domestic execution inertia. Curious yet? You should be.
2. Introduction
RITES was born in 1974, when Indian Railways decided it needed an engineering brain that could also earn forex. Fast forward five decades, and RITES is still doing exactly that — consulting, inspecting, exporting locomotives, and occasionally building things turnkey-style.
It is the official export arm of Indian Railways for rolling stock (with a few country exceptions), which gives it a moat that no private player can casually cross. Want Indian diesel locos in Africa? You call RITES.
But here’s the irony. Despite global presence across 55+ countries and a reputation as a railway guru, RITES’ financial graph looks more like a plateau than a mountain. Sales CAGR over five years is negative. Profits too.
So why does the market still care?
Because RITES is predictable. It prints cash, throws most of it back as dividends, has almost no debt, and survives every government capex cycle without drama.
In a world of over-leveraged EPC players and aggressive infra cowboys, RITES is the boring professor who never fails the exam but also never tops the class.
Question for you: do you want excitement in your portfolio, or stability with a moustache?
3. Business Model – WTF Do They Even Do?
Let’s simplify this without putting you to sleep.
Consultancy (47% of 9M FY25 revenue)
This is RITES’ brain business. Feasibility studies, DPRs, PMC, design, inspections — basically telling others how to build railways, highways, airports, ports, and urban infra.
Margins are high. Asset-light. Globally scalable.
Problem? Quality Assurance revenue dipped, dragging segment growth down ~8% YoY in 9M FY25. Consultancy is great until governments delay decisions — which they love to do.
Turnkey (32%)
This is where RITES actually builds stuff — railway lines, bridges, stations, hospitals, airports. EPC-lite, often cost-plus.
Margins are lower than consultancy, risks are higher, and execution timelines are long. Revenue declined ~8% YoY in 9M FY25. Not disastrous, but not inspiring.
Exports (15%)
Once the crown jewel. Now the forgotten middle child.
Exports were 38% of revenue in FY22, now down to single digits. Africa orders are flowing again (Mozambique, Zimbabwe, South Africa), but execution is lumpy.
Leasing (6%)
Quietly growing at ~11% YoY. Leasing 90+ locomotives, managing industrial rail systems. Stable, annuity-like, and underrated.
So RITES does many things well — just not aggressively.
