RITES LTD

Byword for engineering at home, abroad

Rites (Rail India Technical and Economic Services) is a Central government-owned ‘navratna’ which operates under the Ministry of Railways. The central PSU is engaged in providing consultancy engineering and project-delivery services in the field, including railways, highways, metros, tunnels, bridges, urban development buildings, airports, ports, ropeways, inland waterways, multi-modal logistic parks and green mobility.

The company was established in 1974 to provide consultancy services to the Indian Railways, including feasibility studies, project planning and infrastructure development. Over the years, its scope has expanded to cover other transport sectors and overseas markets. The company has undertaken more than 5,000 projects in India as well as in over 55 countries across Asia, Africa and Latin America. It has also been involved in the planning and design of high speed rail networks, dedicated freight corridors and urban metro systems.

The company is also engaged in engineering design activities, which include engineering consultancy, feasibility studies, design and planning, environmental assessment, and project management services across multiple sectors. It prepares detailed project reports, environmental and social impact assessments, and undertakes geotechnical investigations and surveys.

Rites is engaged in the export of rolling stock such as locomotives, coaches, wagons and other railway equipment. It operates a fleet of over 90 locomotives provided to nonrailway clients, including ports, cement plants, coal plants, power plants, container depots and project sites. The company is also engaged in operations and maintenance services of rail assets at more than 30 sites across India.

GLOBAL NAME

Though Indian in origin, Rites is global in reach. During its five decades-long journey, the company has established itself as a preferred choice for clients in more than 55 countries across Asia, Africa, Latin America and the Middle East. The company has made remarkable progress on the financial front. During the last 12 years, its sales turnover has more than doubled from Rs 1,096 crore in fiscal 2015 to Rs 2,218 crore in fiscal 2025, with operating profit almost doubling from Rs 280 crore to Rs 553 crore and net profit more than doubling from Rs 261 crore to Rs 571 crore. What is more, prospects for the company going ahead are all the more promising.Consider:

• The growth prospects for Rites are immense as the government continues to focus on infrastructure development. This is well-reflected in its robust order book of around Rs 9,090 crore, which is over four times the revenue for fiscal year 2025 and provides revenue visibility for over four years. The government and PSUs account for roughly 70% of the outstanding orders, the balance being contributed by private companies.

ORDERS GALORE

• What is more, the company continues to get a decent inflow of orders. After securing a turnkey order for signalling works from the Ministry of Railways amounting to Rs 67.25 crore and also winning an order for extension of a general rail project, the company has now received a work order from Damodar Valley Corporation (DVC) for AMC of railway siding tracks, and O&M of S&I and operation of 25 KV OHE ISO isolators and associated systems at DVC's Meija Thermal Power Station.
• The cost of the order is Rs 36.22 crore and the company will invest Rs 180 crore in its 51% subsidiary REMCL, which has received the mandate to develop a 1 GW solar power plant on land owned by Indian Railways. REMCL has planned to develop 400 MW of the solar plant while the rest would be on the developer model. These projects are likely to earn 15.5% in terms of ROE for REMCL.

EXPORT ROLE

• Rites has a long history of business relationships and collaboration with several Central and state government ministries, departments, corporations, authorities and public sector undertakings. As a result, the company is frequently allocated projects on a nomination/single tender basis. Rites is one of the agencies of Indian Railways for exporting rolling stock from India, customized for specific client requirements, and components as manufactured by Indian Railways (except exports to Malaysia, Indonesia and Thailand). Indian Railways has prepared a National Rail Plan for India 2030 to create a future-ready railway system to bring down the logistics costs for industry, which is at the core of the 'Make in India' policy. Viewed in all these contexts, the company has remarkable growth prospects going ahead. The share price is placed around Rs 260 and, once the current bearish situation is over, should swiftly cross the Rs 300 mark.

PERFORMANCE INDICATORS (Rs. in crore)

ASHOKA BUILDCON

On a major infra expansion spree: Adding railways order to infra kitty

Nashik-headquartered Ashoka Buildcon is a Fortune 500 company and a leading highway developer in India. The company is an integrated EPC, BOT and HAM player. Recounts Chairman Ashok Kataria, “From humble beginnings in 1976, the company has made rapid strides to cross the sales milestone of Rs 10,000 crore, for which the credit should go to the management’s commitment in maintaining quality, safety, consistency and environmental consciousness in all the company’s assignments.” He adds, “Our strength is reflected in our ability to think and perform beyond the ordinary so as to challenge the perceived boundaries in the construction industry.”

The outcome of this value system is the company’s unmatched portfolio of extraordinary achievements that have helped it build new-age infrastructure in India and overseas. The company boasts a strong talent pool of technical and support staff, while its strong fundamentals provide it the capability to execute projects of any scale.

During its existence of around half a century, Ashoka Buildcon has gone from strength to strength in its financial performance. During the last 12 years, its sales has skyrocketed from Rs 7,795 crore in fiscal 2014 to Rs 10,037 crore in fiscal 2025, with operating profit spurting around 8 times from Rs 382 crore to Rs 2,920 crore and the net profit shooting up over 31 times from Rs 55 crore to Rs 1,734 crore. What is more, prospects for the company going ahead are all the more promising. Consider:

• The company is in expansion mode. It has acquired a majority, controlling stake in Jaora Nayagaon Toll Road Company Pvt Ltd (JTCL) for Rs 166 crore. In fact, Ashoka has entered into a purchase agreement with Macquarie SBI Infrastructure Investments and SBI Macquarie Infrastructure Trust (collectively investors) for the acquisition of all their investments in JTCL. Accordingly, Viva Highways Ltd, a subsidiary of Ashoka Buildcon, has acquired 7,462,000 shares of Rs 10 each held by the investors in JTCL at a consideration of Rs 166.60 crore. Ashoka’s other subsidiary, ACL, has also acquired some shares of JTCL from these investors. Thus, the Ashoka group has acquired a 61.17 per cent stake in JNTR.

REALTY WIN

• What is more, Ashoka Buildcon’s wholly owned subsidiary, Ashoka Infraways Ltd (AIWL), has been selected as the successful resolution applicant for Sainath Land & Development India Pvt Ltd (SSLD), a real estate developer currently undergoing the corporate insolvency resolution process. The committee of creditors (CoC) of SSLD has approved AIWL’s resolution plan. Accordingly, all creditors have been paid Rs 80.52 crore, and AIWL will acquire 100 per cent ownership of SSLD. This acquisition aligns with AIWL’s core business as a real estate developer. This strategic move by Ashoka to acquire SSLD showcases the company’s commitment to expanding its real estate portfolio. This acquisition will strengthen AIWL’s position in the real estate sector.
• Ashoka Concessions Ltd, a subsidiary of ABL, has entered into share purchase agreements with Indian Highways Concessions Trust inter alia for divestment of its five subsidiaries – Ashoka Highways, Bhandara Ltd, Dharwar Tollway Ltd, Ashoka Sambalpur Baragarh Tollway Ltd and Ashoka Dhankuni Kharagpur Tollway Ltd. The aggregate enterprise value of the transaction is Rs 5,718 crore, translating to an equity value of Rs 2,539 crore.
• In a significant development, Ashoka has diversified into the railway electrification business. The company has secured a significant railway electrification contract from North Western Railway, Ajmer, valued at Rs 539.35 crore including GST, making a substantial addition to its order book.

RAIL REVENUE

• The contract represents a significant opportunity for ABL to strengthen its position in the railway infrastructure sector. The project’s substantial value and technical complexity showcase the company’s capabilities in handling large-scale railway electrification works. As the government continues to focus on upgrading railway infrastructure, companies like Ashoka will benefit from the increasing numbers of such projects. This contract could potentially lead to improved revenue streams and enhanced expertise in railway electrification for the company.
• The company’s order book is robust. As on June 30, 2025, its order book position was Rs 15,886 crore, diversified across segments like roads (61%), power (8%) and railways (5%), and spread across 19 states in India as well as overseas. The size of the order book indicates moderate revenue visibility at over 1.5 times FY2025 revenues. Shares of the company are quoted around Rs 199. Prospects for the company are so buoyant that the stock price may rise by 25-30% per year in the foreseeable future.

PERFORMANCE INDICATORS (Rs. in crore)