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RITES Ltd has found fresh momentum on Dalal Street. The railway consultancy stock jumped nearly 7 per cent on Thursday (June 5, 2025), touching Rs 316, its highest level in seven months.
But under the hood, there’s a hitch. The company’s March quarter numbers reveal a revenue dip even as profits held steady — a sign that the top line might be losing steam.
What’s moving the stock?
RITES shares are up over 35 per cent in the past month alone. On June 5, it rose to Rs 311, up 5.4 per cent from the previous day. Volume was unusually high – a sign of strong interest from traders and possibly institutions.
What’s more, the company bagged an order worth Rs 28.5 crore from the Gujarat Urban Development Co, further fueling today’s rally. Lastly, investor interest in railway and defence stocks also added fuel to the fire.
Q4 FY25 results snapshot
| Metric | Q4 FY25 | Q4 FY24 | YoY change |
|---|---|---|---|
| Revenue | Rs 615.4 crore | Rs 643.1 crore | -4.3 per cent |
| EBITDA | Rs 168.8 crore | Rs 160.4 crore | 5.2 per cent |
| Net profit | Rs 132.7 crore | Rs 126.1 crore | 5.2 per cent |
| Operating margin | 27.4 per cent | 24.9 per cent | 250 bps |
| Order book (as of March 2025) | Rs 8,877 crore | Rs 5,870 crore | 51 per cent |
While revenue slipped, margins expanded and profits edged higher, thanks to cost control and a richer services mix. The order book crossed Rs 8,800 crore, its highest ever. That’s what’s keeping investors optimistic.
What does RITES do?
RITES is a government-owned engineering and consultancy firm under the Ministry of Railways. It’s best known for offering turnkey project services, transport infrastructure advice, and export of rolling stock. It also earns from leasing locomotives and wagons.
Below is a table summarising its fundamentals.
| Metric | Value |
|---|---|
| Market cap | Rs 14,750 crore |
| ROE | 19 per cent |
| ROCE | 25.9 per cent |
| P/E ratio | 38.3 |
| P/B ratio | 5.6 |
| Dividend yield | 2.1 per cent |
| Book value | Rs 54.9 |
| EPS | Rs 9.7 |
Value Research ratings
RITES holds a three-star rating from Value Research Online.
Here’s how it scores on other parameters.
- Quality: 9/10
- Growth: 5/10
- Valuation: 4/10
- Momentum: 5/10
Final word for investors
There’s no doubt RITES is executing well. The margins are strong and the order pipeline is healthy. But the recent revenue dip is worth watching. Also, with a heavy dependence on government contracts, any slowdown in public capex could hit the brakes.
In short, it’s a stock with promise, just keep one hand on the emergency brake.
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Disclaimer: This is not a stock recommendation. This story was created with the assistance of artificial intelligence and is intended for informational purposes only. Please take it with a pinch of salt and do your own research or consult a financial advisor before making investment decisions.
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