Indian Railway PSU RITES cited lower profit after tax and total revenue in FY24 as compared to FY23 due to a significant dip in revenue from export segment and quality assurance business. The company expects to turn the tide by amping up it’s export business as it gears up for supplying 200 coaches, an order worth ₹915 crore to Bangladesh Railway.
In an exclusive interaction with The Hindu, Rahul Mitthal, Chairman and Managing Director, RITES Limited said that exports revenue stands at a mere Rs 6 crore during Q4FY24 on account of low supplies. “Signing of agreements for supplying ten locomotives to Mozambique and 200 passenger coaches to Bangladesh Railway, revenue from the export stream is expected to pick up from second half of FY25,” he added.
On May 20, RITES signed a formal contract agreement with Bangladesh Railway to supply 200 railway coaches. “While coaches are quicker to make, locomotives are heavier pieces of equipment than coaches and take longer to manufacture. Final designs and approvals are underway. We have to freeze the designs and get prototypes approved before starting mass manufacture,” Mr. Mitthal said.
While the export order for Bangladesh is being funded by European Investment Bank, an export order that RITES was supposed to land with National Railways of Zimbabwe has been delayed. “The order will go through, subject to Zimbabwe securing funding. We had signed a MoU with Zimbabwe and have been constantly be in touch with them to convert it into formal LoA,” Mr. Mitthal said.
On the India Middle East EU Corridor (IMEC) front, Mr. Mitthal said that following the G20 announcement for establishing trade links between India, Middle East and Europe, and the intergovernmental framework agreement signed between India and UAE subsequently in February, feasibility assessments along the corridor have started.
“One port each from India and UAE are being identified to prepare a proof of concept (PoC) for establishing ease of movement, executing digitisation while moving cargo on an alternate route. It is like a confidence building measure, and the PoC can be replicated along other legs of the corridor,” Mr. Mitthal said.
Among the ports that could be connected on the west coast of India are Mundra (Gujarat), Kandla (Gujarat), and Jawaharlal Nehru Port Trust (Navi Mumbai). In the Middle East, at least five ports have been shortlisted to be connected to the Indian ports which include Fujairah, Jebel Ali, and Abu Dhabi in the UAE as well as Dammam and Ras Al-Khair ports in Saudi Arabia.It is to be noted that apart from government-owned ports, both Mundra port in India and Haifa port in Israel are privately controlled by the Adani Group, and have been highlighted in proposal documents that The Hindu had accessed.
RITES operating revenue (consolidated), excluding other income, stands at ₹2453 crore in FY24 as against ₹2628 crore in FY23. Total revenue stands at ₹2539 crore as against ₹2730 crore in FY23. RITES operating revenue (consolidated), excluding other income, stands at ₹643 crore in Q4FY24 as against ₹687 crore in Q4FY23, a dip by 6.3%.
After a gap of four years, RITES has received export orders worth ₹1200 crore, but how the revenue realisation from these orders pan out remains to be seen, as execution timelines in supplying the export orders in railways may take anywhere between two to three years or more.
Q4FY24 revenue of RITES stands at ₹668 crore as against ₹706 crore in Q4FY23.
Current quarter’s profit after tax (PAT) of ₹137 crore is slightly lesser than Q4FY23 PAT which stood at ₹139 crore.
The company has secured more than hundred orders (including extension of works) worth more than ₹940 crore in Q4FY24, continuing to be a ‘one-order-a-day’ company, Mr. Mitthal said. “Q4 ended with a healthy order book of ₹5690 crore,” he added.
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