Antique Stock Broking has upgraded its rating on shares of RITES to ‘buy’ with a target price of Rs 621. This implies an 18 percent upside from the current level.

The stock had opened higher but quickly entered the negative territory. At 10:34 am, shares of RITES were flat at Rs 525 on the BSE.

The rating upgrade can be attributed to several key factors. Firstly, RITES is set to incorporate Rs 850 crore from Zimbabwe and Rs 500 crore from Mozambique into its near-zero export backlog. This strategic move is expected to provide stability by FY26, the brokerage firm said.

Secondly, RITES is actively pursuing further export orders, each with a minimum value of Rs 500 crore, indicating a commitment to expanding its business.

“There is a market for small orders below Rs 100 crore, which the company is not keen on exploring,” said Antique Stock Broking.

Catch up on all LIVE stock market updates here

Lastly, the brokerage firm added that the consultancy segment is contributing a backlog ranging from Rs 2,700 to 5,700 crore, signifying a steady and growing source of annuity revenue.

The brokerage firm said, “Even in a bear case, that is, if exports are won at low margins, we see a 5 percent net profit CAGR (compounded annual growth rate) at the least”.

RITES is a leading player in the transport consultancy and engineering sector in India and uniquely placed in terms of diversification of services and geographical reach in various sectors such as railways, highways, urban engineering (metros) and sustainability, airports, ports, ropeways, institutional buildings, inland waterways, and renewable energy.

The company is the only export arm of Indian Railways for providing rolling stock, other than Thailand, Malaysia, and Indonesia.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Antique Stock Broking has upgraded its rating on shares of RITES to ‘buy’ with a target price of Rs 621. This implies an 18 percent upside from the current level.

The stock had opened higher but quickly entered the negative territory. At 10:34 am, shares of RITES were flat at Rs 525 on the BSE.

The rating upgrade can be attributed to several key factors. Firstly, RITES is set to incorporate Rs 850 crore from Zimbabwe and Rs 500 crore from Mozambique into its near-zero export backlog. This strategic move is expected to provide stability by FY26, the brokerage firm said.

Secondly, RITES is actively pursuing further export orders, each with a minimum value of Rs 500 crore, indicating a commitment to expanding its business.

“There is a market for small orders below Rs 100 crore, which the company is not keen on exploring,” said Antique Stock Broking.

Catch up on all LIVE stock market updates here

Lastly, the brokerage firm added that the consultancy segment is contributing a backlog ranging from Rs 2,700 to 5,700 crore, signifying a steady and growing source of annuity revenue.

The brokerage firm said, “Even in a bear case, that is, if exports are won at low margins, we see a 5 percent net profit CAGR (compounded annual growth rate) at the least”.

RITES is a leading player in the transport consultancy and engineering sector in India and uniquely placed in terms of diversification of services and geographical reach in various sectors such as railways, highways, urban engineering (metros) and sustainability, airports, ports, ropeways, institutional buildings, inland waterways, and renewable energy.

The company is the only export arm of Indian Railways for providing rolling stock, other than Thailand, Malaysia, and Indonesia.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.