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IDBI Capital Report
RITES Ltd. Q4 FY24 profit after tax was in line with our and consensus estimate. Ebitda margin improved to 27% versus 25% QoQ. DPS has been consistent and RITEs has paid dividend per share of Rs 18 for FY24 (~2.5% div yield), this works out as 87% payout of FY24 EPS. Post the result we have retained our Hold rating on the stock with target price of Rs 683.
We will turn buyer on the stock once margin in consultancy get stabilize. As RITES highlighted consultancy segment is still seeing increase in the contribution from non IR pie in QA. Company is trying to strengthen International Quality Assurance segment and venturing in countries like UAE, Saudi, Oman, Qatar for opportunities.
Order book at Rs 57 billion is equal to 2.3 times FY24 revenue and nomination order has increased to 54% of the total order book. Stock catalyst is order inflow and stabilisation in consultancy margin.
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