Indian Railway PSU RITES reported lower profit after tax and total revenue for FY24 compared to FY23 due to significant decline in revenue from export segment and quality assurance business. | Photo credit: H Vibhu
Indian Railway PSU RITES reported lower profit after tax and total revenue for FY24 compared to FY23 due to significant decline in revenue from export segment and quality assurance business. The company expects to turn things around by strengthening its export business as it prepares to deliver 200 coaches, representing an order worth ₹915 crore to Bangladesh Railways.
In exclusive interaction with This Hindu, Rahul Mitthal, chairman and managing director, RITES Narrow, said that export earnings in Q4FY24 were just Rs 6 crore due to low supplies. “With the signing of agreements for the supply of ten locomotives to Mozambique and 200 passenger coaches to Bangladesh Railways, revenues from the export stream are expected to enhance from the second half of FY25,” he added.
On May 20, RITES signed a formal agreement with Bangladesh Railways for the supply of 200 rail wagons. “Although wagons are faster to produce, locomotives are heavier pieces of equipment than wagons and take longer to produce. Work on final designs and acceptance is in progress. We need to freeze the designs and get prototypes approved before mass production,” Mitthal said.
Although the export order to Bangladesh is financed by the European Investment Bank, the export order that RITES was scheduled to leave via Zimbabwe National Railways has been delayed. “The order will be implemented provided Zimbabwe secures the funds. We have signed an MoU with Zimbabwe and are in constant contact with Zimbabwe to develop it into a formal cooperation agreement,” Mitthal said.
Regarding the EU-India-Middle East Corridor (IMEC), Mr. Mitthal said that following the announcement by the G20 of the establishment of trade relations between India, the Middle East and Europe and the intergovernmental framework agreement subsequently signed between India and the UAE in February, a feasibility assessment with the corridor began.
“We are identifying one port each in India and UAE to prepare proof of concept (PoC) to establish ease of movement, digitalization while transporting cargo through different route. It is like a confidence building measure and the PoC can be replicated on other sections of the corridor,” Mitthal said.
Ports that can be connected on the west coast of India include Mundra (Gujarat), Kandla (Gujarat) and Jawaharlal Nehru Port Trust (Navi Mumbai). In the Middle East, at least five ports have been shortlisted for connection to Indian ports, including Fujairah, Jebel Ali and Abu Dhabi in the United Arab Emirates, as well as ports in Dammam and Ras Al-Khair in Saudi Arabia. noted that in addition to the government-owned ports, both the Port of Mundra in India and the Port of Haifa in Israel are privately controlled by the Adani group, as highlighted in the proposal documents that This Hindu had access.
RITES’ operating income (consolidated), excluding other income, was ₹2,453 crore in FY24 as against ₹2,628 crore in FY23. Total revenue is ₹2,539 crore as against ₹2,730 crore in FY23. Operating Revenue RITES (consolidated), excluding other income, was ₹643 crore in Q4FY24 compared to ₹687 crore in Q4FY23, a decline of 6.3%.
After a gap of four years, RITES has received export orders worth ₹ 1,200 crore, but it is unclear how the revenue realization from these orders will pan out as the timelines for fulfilling export orders by rail may take two to three years or more.
RITES’s revenue for Q4FY24 was ₹668 crore compared to ₹706 crore in Q4FY23.
The current quarter’s profit after tax (PAT) of ₹137 crore is slightly lower than the PAT profit for Q4FY23 of ₹139 crore.
The company secured over a hundred orders (including work extensions) worth over ₹940 crore in Q4FY24, while continuing to fulfill one order per day, Mitthal said. “Q4 ended with a solid order book of ₹5,690 crore,” he added.
