RITES Gets Major Order From NUPPL, Why Shares Are Falling?

Navratna PSU RITES Ltd shares will remain in spotlight tomorrow as the company received major order from Neyveli Uttar Pradesh Power Limited (NUPPL) post market hours. Last trading price of RITES on Bombay Stock Exchange (BSE) stood at Rs 213.80 per share. The company has a market capitalisation of Rs 10,275.31 crore, according to BSE. The return on equity (RoE) stood at 14.87. Meanwhile, stake of Life insurance corporation of India (LIC) is 5.89% in the railway stock. Check more details below:

RITES Bags Order From NUPPL

According to the exchange filing of RITES dated February 13, 2025, “we are pleased to inform you that RITES has entered into Memorandum of Understanding (MoU) with Neyveli Uttar Pradesh Power Limited (NUPPL) for “Comprehensive Operation & Maintenance of NUPPL/GTPP Railway Siding”.” The timer period by which the order must be completed is 5-years. The size of the order is Rs 120.13 crore excluding GST and Escalation.

Railway PSU RITES Gets Major Order From NUPPL, Why Shares Are Falling?

Why RITES Shares Have Been Falling?

The stock witnessed a correction of 17.32% in last 2-weeks only and slipped 39.34% in last 1-year. If we take today’s last trading price of Rs 213.80 per share into consideration, RITES shares recorded a fall of 48.24% from its 52-week high price of Rs 413.08 per share (that the stock hit on February 27, 2024). There are several factors that triggered decline in the PSU. RITES shares have been falling sharply since the last 2-weeks after the company reported a dip in its profit margins and revenue on January 28, 2025 for the quarter ended December 2024.

RITES declared a dip of 15.7% YoY in its consolidated operating revenue (excluding other income) at Rs 576 crore for Q3FY25 as compared to Rs 683 crore in Q3FY24. The company’s total revenue stood at Rs 614 crore for Q3FY25 as compared to Rs 700 crore in Q3FY24. The company’s EBITDA and PAT declared at Rs 123 crore and 109 crore with margins at 21.3% and 17.8%, respectively. According to the company’s bse filing, “year-on-year, there is a decrease in revenue which is attributed to lesser revenue from quality assurance, a downtick in turnkey and no exports.”

The company’s earnings per share (EPS) declared at Rs 2.08 for December 2024 quarter from Rs 2.50 declared in the corresponding quarter of last year. RITES’s EBITDA slipped 30.5% YoY to Rs 117.4 crore and margins narrowed by 440 basis points from 24.8% declared last year.

Meanwhile, Rites blended Ebitda margin has been witnessing a dip as well, reflecting a squeeze on profitability as a result of soaring competition in the market. The ongoing market sentiment towards railway stocks after last year’s and latest budget also contributed to the downward trend.

RITES Latest Dividend

The company on January 28, 2025 recommended a 3^rd interim dividend of Rs 1.90 per share (19.00 % of paid-up share capital). Meanwhile, shares traded ex-dividend on

RITES Dividend History

Rites recommended a total of 25 dividends since September 11, 2018. In last 1-year, Rites recommended an equity dividend amounting to Rs 11.15 per share. At the current share price of Rs 213.80, Rites shares offer a dividend yield of 3.46%. Adjusting for bonus/stock-splits the dividend yield stood at 3.16%, according to Trendlyne.

RITES Shareholding

FII/FPI decreased holdings from 3.20% to 3.34% for December 2024 quarter. Number of FII/FPI investors dipped from 151 to 135 for December 2024 quarter.

RITES Shares Performance

The 52-week high price of RITES shares on BSE is Rs 413.08 apiece (as on 27/02/2024) and 52-week low price is Rs 243.35 per share (as on 28/01)2025), respectively. RITES shares rallied 27.89% in last 2-years and soared 64.55% in last 3-years.

Should You Buy RITES Shares?

Leading brokerage firm Antique Stock Broking has hold rating on the stock with a revised and reduced target price of Rs 243 per share from Rs 325 earlier. The analyst slashed its EPS estimates by nearly 8-10% over FY 25-27 amid weak numbers and compression in export margin.

Disclaimer: The stock has been picked from the brokerage report of Antique Stock Broking. Moneydaily.in, the author, and the respective brokerage house will not be held accountable for any losses caused as a result of decisions based on the article. Moneydaily.in advises readers to do their own research or consult a SEBI registered investment advisor before making any investment decisions.