Rites Ltd posts 18.5% jump in net profit for Q1 FY2018-19 to Rs 820.5 mn

Indian Railway arm Rites Ltd has posted an 18.5 per cent increase in net profit for the first quarter of the financial year 2018-19 to Rs 820.5 million, compared to Rs 692.3 million during the April to June quarter of the previous financial year.  

The company’s revenue for the period under review remained almost flat at Rs 3.7 billion, despite a decrease of Rs 700 million in export revenue. This increase in net profit was achieved on better performance by consultancy segment, domestic leasing and turnkey projects kept their momentum and a rise in other income by Rs 200 million.

“Proactive business development and execution of projects by RITES, has led to growth in our consultancy, domestic leasing and turnkey construction business. It has further led to addition of 90 new projects including extension of some projects to our order book during the Q1’18-19,” said Rajeev Mehrotra, Chairman and Managing Director of Rites.

The decrease in revenue was mainly offset by an increase in turnkey revenue by Rs 460 million and consultancy revenue by Rs 50 million. Revenue from export business was Rs 10 million during first quarter of 2018-19 as only spare parts were exported during this period. As on July 30, the company had an export order book of Rs 12.64 billion, likely to be executed within two-and-a-half years, with part shipments of locomotives and diesel multiple units (DMU) starting the third quarter of the current financial year.

The company said in a statement that consultancy business remained the focus area. In this business, the company achieved revenues of Rs 2.09 billion with a growth of 2.6 per cent over the first quarter of 2017-18. “During the quarter we were able to maintain the consultancy margins of 37.9 per cent excluding the un-allocable expenses,” it said. The domestic leasing business has also shown growth of 16.8 per cent over the last year with high profit margins and recorded revenues of Rs 230 million during the first quarter this year.

Business of turnkey construction projects also grew to Rs 760 mn and registered a growth of Rs 460 million over the last year. “The company has a strong order book of  Rs 55.17 billion on a standalone basis and accordingly in the MoU signed with Ministry of Railways for FY19, standalone operational revenue (excluding other income) target for excellent rating has been kept at Rs 17.60 billion, up by 22 per cent from FY18,” Mehrotra said.