RITES looks to increase exports to boost order book and profit margins

RITES Limited faces lower profit and revenue in FY24, aims to boost exports with major orders from Bangladesh Railway.

Indian Railway PSU RITES declared a marnigally lower net proft and revenue in FY24 compared with FY23 due to a significant dip in exports revenue and its quality assurance business. The company expects to turn the tide by raising it’s exports business as it gears up to supply 200 coaches to Bangladesh Railway, an order worth ₹915 crore.

The firm’s FY24 net profit was ₹495 crore down from ₹571 crore year-on-year (YoY).

Speaking to The Hindu, Rahul Mithal, Chairman and MD, RITES Ltd. said exports revenue was a mere ₹6 crore in Q4 FY24. With the “signing of agreements to supply ten locomotives to Mozambique and 200 passenger coaches to Bangladesh Railway, revenue from the export is expected to pick up from second half of FY25,” Mr. Mithal added.

“While coaches are quicker to make, locomotives are heavier pieces of equipment than coaches and take longer to manufacture. Final designs and approvals are underway. We have to freeze the designs and get prototypes approved before starting mass manufacture,” Mr. Mithal said.

While the export order for Bangladesh is being funded by the European Investment Bank, an export order that RITES was expecting with the National Railways of Zimbabwe has been delayed. “The order will go through, subject to Zimbabwe securing funding. We had signed an MoU with Zimbabwe and have been in touch with them to convert it into formal LoA,” he said.

On the India Middle East EU Corridor (IMEC) front, Mr. Mithal said following last year’s G20 announcement to establish trade links between India, Middle East and Europe, and the intergovernmental framework agreement signed between India and the UAE in February, feasibility assessments along the corridor have begun.

“One port each from India and the UAE are being identified to prepare a proof of concept (PoC) to establish ease of movement, executing digitisation while moving cargo on an alternate route. It is like a confidence building measure, and the PoC can be replicated along other legs of the corridor,” Mr. Mithal said.