RITES Limited is a government-owned engineering consultancy company in the transport sector. It mostly invests in infrastructure projects, railways play a major role. In India, the investors mirror the taste worldwide, they are buy and hold (long-term) investors looking for stocks that offer safety and good returns. RITES is among those stocks that are always the ones being heard out. In this post, we will take a closer look at whether RITES is a good choice in 2024.
RITES Share Overview
As of 2024, the RITES share has maintained a stable position in the stock market. Over time RITES stock showed consolidation but in general it stayed steady. Ana is the stock’s share is valued at about one lakh and ninety -seven million five hundred and fifty-five thousand rupees only. The stock has a 52-week range of ₹413.07 on the high side and ₹216.32 on the low side. Investors who are keen on companies which have the backing of the government and are thus very less risky usually make RITES a safe bet.
Though for the last couple of months RITES has shown a little weakening, but the overall situation of RITES has been waaay up! On a regular basis, the new contracts, business growth, and the power of the government mULL have become the poles of the RITES price situation.
Key Financials of RITES
When analysing any stock the economic performance is a must. The recent profitable years of RITES have seen consistent growth over the last few years. Earnings from this firm included: 2023 that was recorded at a stand-alone revenue of ₹2,262 crores and 2024 at a consolidated revenue of ₹2,394 crores. Being also a company without debt and with excellent reserves makes the company also quite interesting.
Rs 8.8 is the Earnings Per Share (EPS) of RITES. This, of course, is an above-average rate for a government corporation. The Return on Equity (ROE) computation in the company’s books reads 15.4%, thus, it seems like the company is being rewarded by the investments it makes. The operating profit margins of the company are around 24.6%, which generally symbolises the relative safety of a public sector corporation.
Business Performance and Growth Potential
RITES has been successful in view of its capacity to secure large contracts, both locally and abroad. They have even found their way into sectors including highways, ports, and airports other than railways. The diversification of sectors has turned out to be the company’s strength as it has helped the company in maintaining revenue even when one of the sections is unripe.
The Indian government has contributed majorly to the infrastructure growth of RITES. With a number of proposed railway projects and the government’s transport investment, RITES is in a good position to keep growing. In addition, RITES has generated revenue from its various international projects.
RITES’ Competitive Positioning
RITES functions in relatively secluded premises and, thus, has a lot of sway compared to the private sector. However, it does compete with other public sector companies. Its biggest strength remains the fact that it is a government-owned company and hence can provide the required stability, which most private companies find hard to afford.
The industry’s key rivals are those that are vertical to it such as IRCON and Engineers India Limited (EIL). But when compared with IRCON and EIL, RITES is outstanding in that it employs a broader portfolio and efficient management.
Now let’s consider a brief SWOT analysis:
- Strengths: Government banking, business diversification, financial stability, and a strong balance sheet are some of the strengths.
- Weaknesses: Dependence on government projects, slow market growth.
- Opportunities: Building of infrastructure in India, international contracts.