Miniratna company posted muted performance in Q2, 45% dividend declared

The company has said in a stock exchange filing that “The Board of Directors have declared second interim dividend for the Financial Year 2022- 23 at the rate of ₹4.5 per share (45% of paid-up share capital) of the company. Further, as intimated earlier vide our letter no. RITES/SECY/NSE, dated 03.11.2022, the record date set for the purpose of payment of second interim dividend for Financial Year 2022-23 is November 18, 2022.”

The company declared net sales of ₹659 Cr on a consolidated basis in Q2FY23 compared to ₹766 Cr in Q2FY22, representing a YoY fall of 13.9%, on a standalone basis the net sales fell by 15.1% from ₹744 Cr in the year-ago quarter to ₹632 Cr posted in the quarter ended September 2022. On a consolidated basis, EBITDA has fallen by 20% from ₹226 Cr in Q2FY22 to ₹181 Cr in Q2FY23 whereas on a standalone basis the EBITDA has fallen by 24.20% from ₹208 Cr in Q2FY22 to ₹158 Cr posted in Q2FY23. On a consolidated basis, the company declared a net profit of ₹140 Cr in Q2FY23 compared to ₹174 Cr in Q2FY22, representing a YoY fall of 19.60% and on a standalone basis the company declared a net profit of ₹131 Cr in Q2FY23 compared to ₹163 Cr in Q2FY22, representing a YoY fall of 19.50%.

Mr. Arafat Saiyed – Senior Research Analyst at Reliance Securities said “RITES reported a subdued performance in 2QFY23. Revenue decrease by 13% YoY (up 9% QoQ) to Rs6.6bn, lower than our estimates of Rs8.9bn, due to sharp decline in exports revenue at Rs788mn, down 77% YoY. While revenue of domestic consultancy segment increased by 16% YoY to Rs2.8bn, its revenue of domestic leasing increased by 9% YoY to Rs355mn. Notably, its revenue from domestic turnkey segment increased by 117% YoY to Rs2.4bn. EBITDA decreased by 16% YoY to Rs1.8bn, (our estimate of Rs2.6bn) while EBITDA margin was down 108 bps YoY to 27.5% (our estimates of 29%). PAT came in at Rs1.4bn (our estimates of Rs2.1bn) down 20% YoY and 3% QoQ.”

“RITES delivered muted subdued performance in 2QFY23 due to lower export revenue with lower margin. RITES is a direct beneficiary of India’s improving railway infrastructure story. Its presence across the transport infrastructure space, from pre-commissioning to execution capabilities across different geographies and segments. We have a BUY rating on the stock,” said Mr. Arafat Saiyed.

The shares of RITES Ltd closed on Friday at ₹367.60 apiece, down by 3.40% from the previous close of ₹380.55. On a YTD basis, the stock has gained 35.37% so far in 2022.