Very Good companay from Construction & Eng in rail Segment. Rail India Technical and Economic Service Limited, abbreviated as RITES Ltd, is a wholly owned subsidiary and a engineering consultancy corporation, specializing in the field of transport infrastructure. Established in 1974 by the Indian Railways, the company's initial charter was to provide consultancy services in rail transport management to operators in India and abroad. RITES has since diversified into planning and consulting services for other infrastructure, including airports, ports, highways and urban planning. On-shore WDS6 Diesel Loco Leasing service has been introduced.
IPO Just came in 2018 & Yes we have recommended as good company for long term mostly for retired people as dividend yield and consistency would be high. Company able to grow its sales and Profits by around 12% during past decade. Making sales and Profits of around 2500 cr and 600 Cr staying with debt free status and very good profit margin history of around 24% tells us the story of high consistency. Yes debt Paying Capaicty of 74 with Debt2Equity ratio of just 1%, no Liquidity issue. With 50% income from Consultancy which gives around 50% margin also and order book of 6000 Cr. 72% of the order book from Government itself. Those applied during the IPO shold get whole investment back this decade itself via dividends.
Current Year business was affected due to Covid-19. All 3 quarters were badly affected but they have again bounce back in Q4 with more sales than Pre-covid level, yet still annual sales gets affected by 25%. Books are already with order and no need to worry for future. We may see Rites Cross 5000 Cr sales till 2030. New buying can be done again near 200 and if bought near 200 then dividend yield would be more then FD. We may see Rites move towards 300 in the next few months. expect range of 200 to 300 in near term where buying can be done near 200 and some 10% profits can be booked near 300.
Remember Price are dynamic, the more lower you buy the higher the yields. We may see Multiyear rally and should expect whole investment refund via dividends in coming 10 - 15 years. A probable candidate for creating wealth, But as they are in niche market investment could be around 1% of Portfolio here. Still 73% holding is with Government of India while 8% with LIC while FPI & MF combined hold around 6%.