RITES' standalone profit in June quarter up by 0.5%

New Delhi, August 6, 2025: RITES, a public sector company, announced its financial results for the first quarter of the year, showing a modest increase in profit. The company’s board also declared a dividend of ₹1.30 per share. Standalone profit in the quarter increased year-on-year by 0.5%.

Q1FY26 Financial Highlights

Consolidated Financial Performance

For the first quarter of FY26, RITES reported a consolidated revenue from operations of ₹489.74 crore. While this was a marginal 0.8% increase compared to ₹485.76 crore in Q1 FY25, it represented a 20.4% sequential decline from ₹615.43 crore in Q4 FY25. The total consolidated income stood at ₹511.72 crore, showing a 0.7% year-on-year growth but a 19.9% quarter-on-quarter decrease. The Profit Before Tax (PBT) for the consolidated entity was ₹121.59 crore, a 5.7% rise from ₹114.98 crore in Q1 FY25, though it fell by 37.6% from ₹194.75 crore in Q4 FY25. The Profit After Tax (PAT) was ₹90.89 crore, a slight 0.5% increase year-on-year from ₹90.44 crore, but a 35.7% drop from ₹141.33 crore in the previous quarter. The Earnings Per Share (EPS) on a consolidated basis was ₹1.67.

Standalone Financial Performance

On a standalone basis, RITES recorded revenue from operations of ₹455.73 crore in Q1 FY26, a 0.4% increase from ₹453.78 crore in Q1 FY25, but a 22.3% sequential decline from ₹586.61 crore in Q4 FY25. The total standalone income was ₹475.91 crore, showing a minimal 0.2% year-on-year growth but a 23.6% quarter-on-quarter decrease. The Profit Before Tax (PBT) for standalone operations was ₹89.75 crore, a 3.8% increase from ₹86.45 crore in Q1 FY25, but a significant 50.6% drop from ₹181.83 crore in Q4 FY25. The Profit After Tax (PAT) stood at ₹66.65 crore, a 2.8% rise from ₹64.86 crore in Q1 FY25, though it saw a 50.4% decline from ₹134.41 crore in the previous quarter. The Earnings Per Share (EPS) for standalone operations was ₹1.39.

Segment Performance

In Q1 FY26, the company’s consolidated revenue was primarily driven by its Consultancy (Domestic) segment, which generated ₹272.35 crore and showed an 18.6% year-on-year growth. The Turnkey Construction segment contributed ₹148.40 crore in revenue but saw a 13.0% decline year-on-year. The Leasing segment recorded ₹42.59 crore in revenue, marking a strong 26.2% growth. Consultancy (Abroad) brought in ₹17.82 crore with a 19.3% growth, while Export Sale contributed ₹3.35 crore but saw a 32.5% decline. The Power Generation segment, though smaller, showed significant growth, contributing ₹5.23 crore, which is 5.5 times its revenue from the previous year.

Management Commentary

Chairman & MD Rahul Mithal noted the company’s efforts to sustain growth amid project delays and cost escalations in turnkey operations. Leasing and domestic consultancy segments remained the largest contributors to operating profit.

Shareholding Update

As of June 30, 2025:

• Public shareholding stood at 27.80%.
• Promoter shareholding remained at 72.20%, fully non-encumbered.

Detailed Insights For Investors

Stable Profit Despite Weak Revenue Growth

• RITES reported only a modest rise in revenue and profit year-on-year, but a noticeable dip compared to the previous quarter.
• This reflects some project delays and seasonality, particularly in turnkey construction.

Consultancy and Leasing Segments Driving Growth

• Domestic consultancy revenue grew 18.6%, and leasing saw a strong 26.2% rise.
• These two segments remain the core contributors to profit and helped offset declines in turnkey and export sales.

Turnkey Segment Under Pressure

• Revenue from turnkey construction fell 13% year-on-year, pulling down overall growth.
• Project delays and rising costs are the main reasons, as per management.

Interim Dividend Declared

• The board declared an interim dividend of ₹1.30 per share, which is a positive for income-focused investors.
• The consistent payout signals financial stability despite short-term profit dips.

Strong Public Sector Backing

• The government holds a 72.20% stake, all non-encumbered, providing institutional strength and long-term support.
• Public shareholding remains stable at 27.80%, indicating steady retail interest.

EPS Remains Stable, But Sequential Fall is Sharp

• Earnings per share are stable on a year-on-year basis, but lower compared to the last quarter.
• Investors should focus on how quickly profitability rebounds in the coming quarters.

What to Track Going Forward

• Recovery in turnkey projects and cost management.
• New order inflows, especially in consultancy and leasing.
• Updates on project execution timelines and export activity revival.

REF:https://nsearchives.nseindia.com/corporate/RITES_06082025150242_OutcomeSigned.pdf

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