RITES Limited (NSE: RITES) Q1 2026 Earnings Call dated Aug. 07, 2025
Corporate Participants:
Unidentified Speaker
Rahul Mithal — Chairman & Managing Director
Analysts:
Unidentified Participant
Harshit Kapadia — Analyst
Shreyans Mehta — Analyst
Viraj Mithani — Analyst
Vishal Periwal — Analyst
Uttam Kumar Srimal — Analyst
Nemish Sundar — Analyst
Presentation:
operator
Good morning ladies and gentlemen. I am Karthikeyan, Moderator for this conference. Welcome to the conference call of rights limited to discuss its Q1FY26 results. We have with us today Mr. Rahul Mittal, chairman and managing director. Dr. Deepak Tripathi, director, Technical and Director, Projects additional charge. And Mr. Krishna Gopal Agarwal, Director, Finance and Chief Financial Officer. At this moment all participants are in listen only mode.
Later we will conduct a question and answer session at that time. If you have a question, please press star and one on your telephone keypad. Please note this conference is being recorded. And in the interest of time and fairness to all participants. You are requested to restrict yourselves to one question per participant. Time permits. You may come back in the question queue now. I would like to hand over the floor to Mr. Rahul Mittal, Chairman and Managing Director, Rights Limited. Thank you. And over to you, sir.
Rahul Mithal — Chairman & Managing Director
Morning. Thank you. Let me start with giving the Safe harbor statement. The presentation and the press release which we uploaded on our website and exchanges yesterday. And discussions during the call. These statements consider the environment we see as of today. And obviously carry a risk in terms of uncertainty. Because of which the actual results could be different. And we do not undertake to update those statements periodically. So let me give you a brief overview of the quarter one results. It’s been flat. The results have been flat. The order book, as you see, about 8800 crores.
A bulk of it, in fact about 3500 crores from about 300 plus orders was added in the last two quarters of the last FY. So now we are at the stage where we have to focus on expeditious execution. Which we foresee starting from the latter part of this fy. And the guidance which we gave at the beginning of the fy. That we will try and definitely surpass the previous year’s performance. We are on track. All these orders are at the various stages of finalizing the design, fixing up the executing agencies. So the revenues will start floating in, flowing in by latter part of this fy.
So that’s the opening broad where we have been in quarter one and where we see moving forward. And I’ll go into more details as I answer individual questions. Thank you.
Questions and Answers:
operator
Thank you. Now we begin the question and answer session. If you have a question, please press star and one on your telephone keypad. In the interest of time and fairness to all participants you are requested to restrict yourselves to one question per participant. Time permits you may join back the question queue. The first question comes from Harshit Kaparia from Elara Securities.
Harshit Kapadia
Good morning sir. Thanks for giving me this opportunity. So just one question right now. On the consultancy side we have seen the growth coming back. Now have we seen a broad based growth or is the consultancy also seeing growth only from certain sectors and followed to that would be the quality assurance. Is this now normalized or are we going to see an uprise on the quality assurance side?
Rahul Mithal
Morning Harshit. So the first part of question. Yes, the consultancy has shown an overall growth of 7%. In fact that is what has helped us see growth in the ebitda by about 8%. A focus on the high margin consultancy order. So you see the orders which we have been getting in the last latter part of the last fy the consultancy portion of those orders those have started generating revenue and those will continue to generate revenue. Because the initial milestones are in the designs execution and as the execution starts the latter part of the FY the other elements of the turnkey and top line will keep adding on.
As far as. And this is across sectors, not only one particular vertical, this is broad based across. Because since the orders were broad based covering all the sectors about 13 different verticals that we have. As far as quality assurance is concerned. Quality assurance has been showing a regular uptick. And the worst to my mind as I had mentioned in the beginning of this FY also is over. We will definitely keep on growing both not only sequentially in terms of quality assurance in terms of getting more orders in terms of revenue realization from the recent orders which we got in quality assurance from the on the newer client, the non Indian Railway client.
So quality assurance will only show an uptick both sequentially and in the entire FY vis a vis the last fy.
Harshit Kapadia
Understood sir. Wishing you all the best. I’ll come for more questions sir. Thank you. Thank you.
operator
Thank you. The next question comes from Anand B from Shema well Private limited. Please go ahead with your question.
Unidentified Participant
Good morning sir. Can you hear me?
Rahul Mithal
Morning. Yes.
Unidentified Participant
Regarding your export orders. I remember in the previous con call you mentioned the 10 locomotives by around 70 to 80% of execution is done and deliveries will be starting from Q1 of this time. So I think in the press release you mentioned that the deliveries have already started. So is there a confirmation that the deliveries and can we see a realization of the revenue by this quarter or the next quarter?
Rahul Mithal
Yes. Morning Anand. So yes, it’s correct. I had mentioned that the 10 locomotives to Mozambique will start. The deliveries will start. And the first two locomotives have got shipped out in the first week of July, early July. So the revenue booking happens when the actual shipping out takes place, the bill of lading. So these two locomotives, the revenue will definitely figure in Q2. And the other eight locomotives are also on track in various stages in the pipeline. So definitely in the coming quarters these will start generating revenue. So yes, the booking of revenue of these two shipments did not happen in Q1.
They will happen in Q2 because the actual shipment took place about early July. But yes, the shipments have started.
Unidentified Participant
Okay. Okay. And you said like in Q2 or Q3 you’ll be able to see realization of the impact in locomotives or just two or three.
Rahul Mithal
No, no, no. These two which have already got shipped out, these for sure will get booked in Q2. And each of the balance 8 are in various stages successively in each quarter they will, as the bill of lading gets made, as they get shipped out, Q2, Q3, Q4, we will try and definitely complete the entire order.
Unidentified Participant
Okay, okay. Okay. And in your. Okay, I’ll come back to that. There’s only one question.
Rahul Mithal
Thank you, Anna.
operator
Thank you. The next question comes from Shreyant Mehta from Iqira Securities.
Shreyans Mehta
Yeah, thanks for the opportunity. So my first question is can we expect or is it fair to assume in terms of margins the worst is behind us? Because now we are talking about export contribution to kick in. So hopefully that will also add to. Our margins going forward.
Rahul Mithal
Yes. Morning Shayans. Yes, you are correct in your assessment. If you recall in the guidance which I gave at the beginning of this fy, I was saying that the worst seems to be over especially in terms of execution coming in in this FY from the export orders also. And we had said that we aim at overall on an annual basis an EBITDA margins of about 20 odd percent and PAC margins of what, 15 odd percent. And the Q1 because of the uptick in the consultancy contribution in fact has been higher both in the EBITDA and the PAC margin. And so I think yes, definitely we should be able to maintain those levels on a minimum on an overall annual basis.
Shreyans Mehta
Great, Great. And secondly, if you can help us with the cash on the books as on date,
Rahul Mithal
the cash Balance is about 800 crores and client fund is about 2,400 crores.
Shreyans Mehta
That’s it from my side. Thank you and all the best. Thank you, sir.
operator
Thank you. Yeah. Next question from Viraj Mithai from Jupiter Financial.
Viraj Mithani
Yeah, thank you for the opportunity. Sir. My question is what would be your guidance for this year and next year since things are like you think the worst seems to be over. Can you give some color on that?
Rahul Mithal
Morning, Viraj? So don’t know. Work has just started. We have got the orders. Now we have to really expedite the execution. These are very young orders. As I said out of 8800 crores about 3500 crore is very young. So these are young orders which need to be executed. And yes, in terms of the only sequentially uptake and on an annual basis whether in terms of which I had given the guidance at the beginning of the year, definitely we will surpass by a substantial amount the top line vis a vision last year. And as I said we’ll be able to maintain on an annual basis EBITDA margins of about 20% and pat margins of about 15%.
Viraj Mithani
Okay. And so. Okay, I’ll come back in with you. Thank you.
Rahul Mithal
Thank you.
operator
Thank you. Participants, to ask a question please press star and one on your telephone keypad. The interest of time and fairness to all participants you are requested to restrict yourselves to one question per participant. We have a follow up question from Harshit Kaparia from LR Securities.
Harshit Kapadia
Yeah, hi. Thanks for the opportunity. Just wanted to check on the margins on the consultancy side. They have been something, you know, about 40, 45 times. If you look at at last two, three years now we are in the vicinity of 35, 40%. Now should we look at this to be a more sustainable number or is there a possibility that we can move towards 45% margins?
Rahul Mithal
No, I think you see, you must appreciate that these 40, 45% margins traditionally included the QA contribution, quality assurance contribution also which was definitely earlier on a much higher contribution. So the levels of about 35% is what is now especially a large percentage of our orders now across vertical are on competitive basis. And there’s huge competition even in our international consultancy orders which we are getting. If you compare the trend of margins in that vis a vision earlier international orders are definitely much more competitive. So realistically the 35 odd percent range, anything between 30 to 35% is what on a console basis, on a consolidated basis the consultancy margins would settle down over a period of time.
And that is what is contributing to the overall EBITDA margins of about 20% in patients, margins of about 15%.
Harshit Kapadia
Understood sir. I’ll join again for the Q. Thank you.
Rahul Mithal
Thank you.
operator
Thank you. We have the next question from Vishal Perival from Antique Stockbroking.
Vishal Periwal
Yes sir. Thanks for the opportunity. Sir. In terms of our Bangladesh order, can you give some color like you know where we are in terms of design and approvals and second related to that like you know when, when that order can enter into revenue resolution stage.
Rahul Mithal
Yes. Morning Vishal. So Bangladesh is a complex order in the sense that there are different types of coaches. There are about seven different types of coaches. And now in the last few months there has been a very substantial progress in that in terms of regular meetings, interactions with the manufacturer and the Bangladesh railway to finalize the designs. Most of the design elements are getting finalized and the ordering of the detailed sub assemblies for the prototype has started. So we are foreseeing that definitely the first rake of 20 coaches, we are aiming that before the end of the FY we should be in a position with because it will require earlier individual prototype approvals of each type of coach and then the mass manufacturer will start.
So our assessment is that we are aiming that the first break of 20 coaches definitely before the end of the FY we should be aspiring to send it. And so that’s the time when the first revenue bookings we are aiming for in quarter four from this order.
Vishal Periwal
Okay. And this order will conclude by tentatively.
Rahul Mithal
So once the mass manufacture starts then considering that we have a huge manufacturing capacity, that’s not an issue. If we are on track and the first rate we are able to push through in quarter four, then we should be able to definitely aim to complete the entire order in the next fy.
Vishal Periwal
This is helpful. Thank you very much and I will come back in declutter.
operator
Thank you. The next question comes from Uttam Kumar Srimal from Access Securities.
Uttam Kumar Srimal
Yes sir. Very good morning and thanks for the opportunity sir. Currently our turnkey order book stands at 4,209 crore. So sir, what is the execution plate for these orders? Time frame?
Rahul Mithal
Yes. So as I mentioned, a large chunk of these orders have come in the last two quarters and more so also recently and even in this quarter. So if you take an average time span of any infrastructure, about two and a half to three years. The first about six to nine months goes in the design and fixing up the executing agency. So we are very closely trying to ensure that the actual physical construction in most of these orders starts in the next three to six, six months. So that by quarter three, when the actual construction at the site starts, the revenue booking in Q3, Q4 starts.
So that’s the broad on a bigger picture you see bulk of the turnkey order book. The revenue booking should start coming in from latter part of this FY and on an average these projects have a time span of about 3 years.
Uttam Kumar Srimal
Can you quantify how much we can. Book in this year for Tanki in terms of revenue?
Rahul Mithal
That is. That will be, you know, kind of. It’s too. I don’t want to give figures wherein it’s as I said, giving a mix of the orders depending on the time frame. Definitely on an overall basis what we will aim is that they contribute the turnkey segment contribute substantially. So that this guidance that we surpass by a substantial amount the revenue vis a vis last fy that we will definitely ensure. But what will be that figure? I think that will be speculation at this stage.
Uttam Kumar Srimal
Okay sir, thanks a lot. I will come back.
Rahul Mithal
Thank you.
operator
Thank you. We have follow up questions from Anand B from Shemaville.
Unidentified Participant
Yeah, good morning once again. So I just want to know like what would be your estimated segment breaker between the different sectors like consultancy, export, turnkey and leasing in terms of percentage for FY26?
Rahul Mithal
Sorry, your first, first sentence. I. I lost you. Sorry, could you repeat please?
Unidentified Participant
I’m asking for a shipment breakup between the, you know, verticals, the consultancy, export, leasing, turnkey in terms of percentage for the FY26. You have an estimate?
Rahul Mithal
Yes. So you see if you look at. Let’s work at reverse. You see the order book consultancy is about 2,900 out of 8,800 crore which is roughly about nearly 30% plus. So the turnkey element which I mentioned in the last response will start, start generating revenue by latter part of this fy. The export revenue definitely will start picking up as I answered. So to my assessment we definitely aim that the high margin, the contribution which is primarily consultancy and export of the mix and the balance would be picked up by turnkey. So the on a nutshell, the consultancy, export and leasing elements which are primarily the high margin contributors that would definitely aim to be at least 60% plus so that we have a safe margin level that we have been guiding at.
And then turnkey contributes to about 30 odd percent.
Unidentified Participant
In between. I kind of lost you. Can you just repeat on terms of breakup or consultancy, leasing and export.
Rahul Mithal
So that is again as I said would vary on a quarter to quarter basis. And again what would be the element of each one of them again, export. As I said, 10 locomotives would go. We would definitely aim at one locomotive, one rake from Bangladesh. So again giving a mix of each one of them right now is not. I would call it too speculative. Yes, definitely. We would keep tweaking with an overall aim at keeping the ebitda margins at 20%. So focus at as the quarters evolve, focus on the high margins even within the export consultancy and leasing so that at least 60% plus remains the mix of these and turnkey doesn’t 5% so that the hit on the overall margins is not substantial.
Unidentified Participant
Okay. Okay. Thank you so much.
Rahul Mithal
Thank you.
operator
Thank you. The next question comes from Sundar from Elara Capital.
Nemish Sundar
Yeah, hi sir, this is Nemesh Sundar from Alara. Sir, I just wanted to understand the payment realization from the Bangladesh order. So would it be milestone based or would it be at the end of the project? Have you received any advance for that?
Rahul Mithal
Yes, we have received the advance and the like. In all export orders the revenue book is booked in the the as the bill of lading gets made. So whether it is the Mozambique order or the Bangladesh order. And revenue realization normally is not an issue in them because all of them are covered by LC’s. So and for Bangladesh order we’ve got the advance also.
Nemish Sundar
Okay, answer. Any update on the Zimbabwe export order?
Rahul Mithal
The Zimbabwe order is as I said, we have not added it still to our order book. It’s about 700 plus crores. It’s not part of the order book because we were very clear even though the agreement is signed, the funding is not fully in place. So that while they are pursuing with us and the AFRI EXIM bank it is yet to be fully in place, the term sheet is yet to be fully accepted. So we are still hopeful that it’s been quite a long time, more than two and a half years that it sees the light of the day.
But as of now it’s not part of the order book.
Nemish Sundar
Okay, thank you sir. I’ll get back to you.
Rahul Mithal
Thank you.
operator
Thank you. Yeah, follow up question from Viraj Mithai from Jupiter Financial.
Viraj Mithani
Yeah. Can you give some color on the export. How are we doing on those front?
Rahul Mithal
Sorry?
Viraj Mithani
Color on the export site. Since you said we’ll be focusing on exports this year. So how are we doing on this front and follow up to that. We’ve seen so many MOUs. So when the benefits of those MOU will come to us.
Rahul Mithal
Right. So. So as far as export is concerned there were two guidance if you remember which we had given. One was that we will aim for getting one export order. I’m talking of export of rolling stock, the export portion and it is not the international project consultancy. So in the export of rolling stock we have maintained that and even in this quarter we’ve got one fresh export order from African Railway company. So that’s as far as adding to the orders of export which is about 1400 crores. Now in terms of execution, the guidance which we had given that the Mozambique ship funds will start by early this year and they have started.
The first two locomotives have gone in early July and we are definitely aiming to execute the entire order in this year. The execution for the Bangladesh order will be as I mentioned sometime back that we will try and start aiming that the first rake starts before the end of the FY. As far as the question on MOUs is concerned, you see each of these MOUs start a collaboration and these are all non financial, non binding MOUs. They set a collaboration process. So giving an example, the MOU which we signed with Etihad Rail late last year gave us results and we have already got our first order with this collaboration with Etihad Rail in Jordan.
We are doing a consultancy order consultancy project in Jordan and this collaboration, this interaction has already started, has opened up a lot many opportunities which I’m sure in the coming quarters will convert into orders. So each of these MoU, this is just an example our strategic collaborative mouse which as the opportunity comes up because you’re collaborating and constantly in touch with the MOU partner, generate orders.
Viraj Mithani
Thank you for. Thank you, thank you.
operator
Thank you. We have a follow up question from Vishal Perival from Antique Stock Broking.
Vishal Periwal
Yes, thanks for the follow up sir. On that Mozambique order that we have shipped. So what sort of margins that is looking for the export now for us?
Rahul Mithal
You see one thing is very clear that both these order when we after a hiatus of about three to four years and we got the first order early in 24, the Mozambique order and then in the quarter one of last year we got the Bangladesh order. These two were the first orders in the last five decades which were on a global competitive order and they were not on the line of credit EXIM Bank EoI basis. So definitely the margins are now your custom competing on a global tender are the erstwhile export margins which are about minimum 20, 25% plus.
They are nowhere near that. But yes they are competitive. And what we will try and maximize is that the more expeditious execution that you do, even you inch up by at least one or two percentages more by the earlier envisaged margin. So I can only say that the overall expotec margin will be definitely lower, yes in double digits but definitely not in the range of 25% which are hitherto historically there.
Vishal Periwal
Okay so maybe a range wise if not exact it will be more like 10:15 or higher.
Rahul Mithal
You see every order Vishal will have a different margin but I think, let me put it this way, it will be in a double digit but definitely not above 20.
Vishal Periwal
Okay, sure sir. This is helpful sir. Thank you very much.
Rahul Mithal
Thank you.
operator
Thank you. Participants, if you have a question please press star and one on a telephone keypad. Participants are requested to restrict yourself to one question per participation. Follow up question from Anand B from Shema Wealth Private Limited.
Unidentified Participant
Yeah, thanks for the opportunity again. So I just want to get clarity on the orders that we got in the last three quarters. Specifically the Untopo Rail holdings and the Cisco Apical logistics. Can you shed some light on these three specific export orders that we got in the last three quarters? One is the. Rail holdings that’s the order. The two orders from there and the Cisco Applico logistics the order that we got in Q2. So can you share some light on that and when we can get revenue realization in which year?
Rahul Mithal
Yes. So Anand, this is a very interesting initiative which we have taken. It opens up a huge potential. All. All these three orders while from different clients are basically the similar orders. They are orders. You see Indian Railways now has a large number of in service diesel locomotives which are available for spare now because of the large scale electrification and most of these high horsepower diesel locomotives have a minimum of 15 to 20 years life left it’s least and they are at a very good competitive price. The challenge only is that this is on broad gauge.
Indian Railways is on broad gauge which is 1676 millimeter. And South Africa is on Cape gauge which is 1067 millimeter. So these locomotives have to be modified to be able to run on that network. So considering we can took this as a challenge because it’s a win win situation for all for Indian Railways because these locomotives can go they are available at a competitive price for the client. So we’ve started work on that. We’ve gone into detailed designing on how to go about it. The designs are at a very advanced stage. They’ve got nearly finalized.
We started indenting the requirement for it. So the aim is to at least have one prototype prototype ready. On paper all the designs are ready and the sourcing has started. But the aim is to get at least one prototype ready and get it cleared by the African railways by end of this fy. Once the first prototype is ready then the mass manufacture and the design proving would have been done and it not Only opens up these nine locomotives orders which we have got. But it also opens up up huge amount of potential for the more than 100 plus locomotives which are available to be spared for export.
Unidentified Participant
Okay, and what about the, the Intercoter rail holding? Is that for the supply commission?
Rahul Mithal
All of these, all of these orders, there are four different orders totaling to 11. 11 locomotives which are including the most recent two which we received in this quarter. So now there are four different order of all similar, different clients all in South Africa. And this would not only open opportunities in South Africa but There are about 11 different countries in Africa which have the Cape Cage. So all of these, once the first prototype physically runs on the system and gets all the necessary statutory approval will then the mass manufacture would not be a issue at all.
Unidentified Participant
Okay so once a one prototype like you know is approved everything. So that would be a common base for all of these orders that will be going forward.
Rahul Mithal
Yes, yes.
Unidentified Participant
Okay. Okay. In the last three quarters when you got these orders where do you expect sort of a completion of the order?
Rahul Mithal
Yes. So I said the first prototype we are aiming to definitely see that it reaches physically by end of this fy. That’s the aim. All designs have now been finalized and the manufacture will start in the next few months. So then we should be able to send the first prototype for physical trials by end of this financial year.
Unidentified Participant
Okay, so we expect like a revenue realization by FY27ANand we could come back in the Q3. Okay. Okay, fine. Thank you.
operator
Thank you. Yeah, follow up question from Shreyan Smitha from IQRS Securities.
Shreyans Mehta
Yeah, thanks for the follow up. Sir. How should one look at the REMC part of the orders? I mean especially from the scalability perspective you think, you know, I mean it’s largely 130, 140 odd crore yearly or you know we can scale it up. From here on as well.
Rahul Mithal
Yes. So I think Shreyas, the key point in RMCL scaling up are twofold. One is the consultancy which it gives for the traction power procurement that it does for Indian Railways. So the challenge is in that more and more states opening up to open access. And as more states open up to open access the quantity of procurement from them increases and the our consultancy fee which we get increases. So efforts are on and we’ve got some headways in the last two months. Two states which we’ve last few months we’ve opened up. So in the coming quarters the efforts to get more and more states to give us open access for procurement, that’s the scalability which we are aiming at and I definitely see a scope for at least a 20% scalability in the next one year or so.
That’s the one broad area for scalability. Another area which now RMCL is working on is based on the experience of the last few years which they worked on on the green energy area. For last two, three years they’ve been piloting the green energy initiatives for Indian Railways. So now they are in a position where they started getting small orders already in the last few months. And that’s again a scope for a lot of scalability for consultancy for other possible clients. So both these areas as you would appreciate have a scope of scalability and definitely RMCL can then reach up much above the current levels.
About 130, 140 crores. Got it.
Shreyans Mehta
Got it. That’s really encouraging. Thank you sir. Thank you very much.
operator
Thank you. The next is the follow up question from Harshit Kaparia from Alara Securities. Your line is unmuted. Please go ahead.
Harshit Kapadia
Sorry. Yeah. Hi sir. Thanks for the opportunity. On turnkey, do you think since the electrification is completely done, not more EPC related projects which are likely to come this year or even in next five years, what’s your view? Let’s say five year thing, Is it going to go down or is it only going to go up and would ride share remain at that point seem you know, 10% share or you know 30% of your revenue would remain to be turnkey construction. That’s the question.
Rahul Mithal
So Harshit, I’m glad you asked this question because this is something important which we have been saying earlier and we want to reiterate. We are not an EPC construction company and will not be an EPC construction company. We are a consultancy company. So whether it is pure project consultancy or the export portion which is primarily design consultancy in turnkey, also the new orders which we are taking, whether it is in the rail infra sector or the building sector etc. All of these are primarily consultancy work. It is not EPC tender, none of them. They are primarily generally consultancy.
It’s the method of account where the revenue is flowing through our balance sheet. So if for example the consultancy fee is 4 rupee on a 100 rupee project then the revenue is 104 rather than 4. So we are very clear our role remains the same only for the certain clients. For ease of dealing with one entity, single window compliances, etc. They feel it more comfortable for the revenue to flow through us. So that’s very clear. And that model depending on the comfort of the client we will continue to pursue because not really EPC construction contracts.
So whether as I said in rail infra, like you see we got some orders, we got some orders in the turnkey segment in rail infra we’ve got some orders in for example the IIT Delhi one work we are doing. We recently got about 10 days back the BEL work in Andhra Pradesh which is also on basically a cost plus turnkey model. So that’s going to be there and that contribution would depend again over a period of time as more and more clients, whether in the building vertical or rail infra vertical come up wanting to work on this model as a client and we would be okay with that.
Harshit Kapadia
Understood sir. And just one follow up on consultancy. Sorry. On the export side on the Zimbabwe you said there’s been two and a half years. So how much more time you know would you think would take, you know, for us to get order or is there a risk that the order will be cancelled?
Rahul Mithal
So the Zimbabwe order, right?
Harshit Kapadia
Yeah, the Zimbabwe order, sir.
Rahul Mithal
So very frankly the that risk is there. It was there from day one and that’s the very reason we were very clear that even though a formal agreement has been signed we will not include it in the order book. So the funding is always a challenge in, you know, in these orders. And since this funding was being arranged by the National Railway of Zimbabwe from various sources and they were thereby confident that they may still get it from the APRI Exim bank. But yes, that risk, definitely you’re correct, that risk remains.
Harshit Kapadia
Understood sir. Thanks for the opportunity. Thanks. Thanks.
operator
We have a follow up question from Anand B from Shemawal Private Limited.
Unidentified Participant
Yeah, thanks again. It’s a follow up question from before. So since you mentioned consistency and exports will be your main focus. So we can say that turnkey construction, the share of the revenue can go down in comparison to them.
Rahul Mithal
Yes. So the turnkey contribution as I said would remain in the range of about 30 odd percent of the total pie. That’s on an average, on an annual basis on a particular quarter the mix may change depending on the shipment or the execution of a particular turnkey project or the shipment of an export order. But on an annual basis what we foresee is that the contribution from turnkey would remain in the range of about 30 odd percent.
Unidentified Participant
Like not quarter basis but like in mixed say 4, 5 years range. In a long term basis.
Rahul Mithal
On a long term basis. Again we are very clear as I said a little while back that we are a consultancy company and this turnkey segment is not really an EPC segment. So it depends on the comfort level of clients. For example, many of these educational institutions which I mentioned, the orders which we have got like IIM Raipur IIT, Bhukteshwara IIT Delhi, many of them prefer to deal with a single window. So the entire revenue flows through us. So even though it’s primarily the scope of work is consultancy but it’s concept to commissioning. So I give an example, the 104 flows through us rather than 4.
So that is what will maybe the extent of order that we get on this model may change the percentage in the coming years that we can only see in the coming quarters in terms of the fresh order inflows.
Unidentified Participant
Okay, okay, okay. But will it go let’s say below 30 odd percent in the next two, three, four years?
Rahul Mithal
No, it will not go below 30%.
Unidentified Participant
Okay, thank you so much.
operator
Thank you. Participants, if you have a question, please press Taron1 on your telephone keypad. We have a follow up question from Ashit Kapadia from Elara Securities.
Harshit Kapadia
Yeah, hi, thanks for the opportunity sir. On remcl we were expecting there will be a leg up because of the dfc. So we understand at least the East DFC section has started. So are we completely, completely doing. The REMCL is doing work for East DFC and West DFC which is partly operational. You know, where are we and is there a leg up if let’s say the DSC gets operational maybe this year or next year?
Rahul Mithal
Yeah. So Harshit, as I explained the RMCL leg up happens as more and more procurement of traction power comes from states which open up to open access. So the key challenge, and this is the target area which we keep pushing in every quarter to try and come have more states on open access. So about seven, eight states still left which are to come on open access. And recently we had a success in one or two states and we are hopeful that we are on talks and, and discussions to get more states open up to open access for procurement of traction power for Indian Railways in the coming months as those.
So that is a leg up which generates more revenue because in terms of electrification, the electrification is now more or less at its reaching its, you know, maximum 100%. So only in terms of more traffic that flows, that grows and it moves on these corridors or in the railway, that is the incremental portion that there will be more requirement of electrical energy. But the substantial growth is as you open up more states for open access for procurement of traction power
Harshit Kapadia
even for. Dfc it would be through state only, sir.
Rahul Mithal
Yes, yes. All traction power you’re buying from states electricity you buy through the grid through the open access which is being generated by. Which is covered by the individual regulatory issues of every state.
Harshit Kapadia
So we were expecting some 500 megawatt would be added via DFC. How much of that has been done till now, sir? Any color.
Rahul Mithal
I would not be able to give you individual breakup figures of that right now. But definitely the requirement of power whether it is for the entire network, IR etc. Is primarily sourced primarily or what the entire depends on the procurement from states. And where there is no open access limits the probability from buying. And that’s what reduces the possibility of these thieves that we get the consultancy fee. So the catch is that more and more states as we can get on open access opens up or gives us the leg up for larger scalability in terms of the revenue of rhq.
Harshit Kapadia
Can you name the states which have already boarded and some states who.
Rahul Mithal
I wouldn’t have the list ready right away but we’ll share that with you.
Harshit Kapadia
No problem. And lastly on the rate side you mentioned. So is the rate at 5 paisa per unit or has it changed?
Rahul Mithal
It’s about 7 paisa per unit.
Harshit Kapadia
7 paisa per unit. Okay. Okay. And lastly on your wagons. Sir, I think we have a separate joint venture on the wagon side. So. And we have seen, you know the procurement from the Indian Railways for wagons have increased. Even the tenders were also floated. So if you can give any color on the tendering for wagons in future. And is there a capacity expansion plan for your particular joint venture that you have?
Rahul Mithal
The joint venture at Sail Kulti is in fact last year when we started with the first major turnaround and then it maintained in FY25 the profitability. And now also this quarter we’ve got profits. In fact it was after about first time it started generating giving dividend and now also it’s giving it’s generated profit. We have an order book of 480 crores as of the 30th of June. And this is. So the interesting thing is that JV sale Kulti is is not only getting orders from Indian Railways. It is also getting orders from private players which it has executed successfully last year.
So we see a potential. We have also recently got the design approvals for container flat wagons from rdso. So now we are pitching for getting orders for manufacturing of these type of wagons from not only Indian Railways but from from private players also. So this order book of 480 crores is only going to increase in the coming quarters.
Harshit Kapadia
Understood sir. Thank you for giving me the opportunity and wishing you all the best sir. Thank you. Thanks.
operator
Thank you. Follow up question from Anand B. From Che Marvel Private Limited.
Unidentified Participant
Thanks for the opportunity again. I just want to get a shed on their dividend payouts. In the last con call you mentioned the payout will be around 95% for the current FY26. Would you still maintain that dividend payout?
Rahul Mithal
Yes Anand, you see our basic business model is that we are a debt free company with a low capex. So we are not a capex company. So with that broadly pattern of dividend if you see in every quarter and even if you see on the FY basis and even now the dividend that we have declared for quarter one is in that range. So we will maintain that trend in the coming quarters in terms of the dividend payout percentage.
Unidentified Participant
Okay. Okay. So I think in this quarter you gave interim dividend of 1.3 per share. So at the end of the financial year what would be a total dividend.
Rahul Mithal
Debt to be able to declare either? That would be speculative. But giving getting. You see by the trend and my guidance that we will maintain the levels of dividend payout ratio which we have maintained. It also depends on what how much profit we are going to make, right?
Unidentified Participant
Yeah. Yeah.
Rahul Mithal
No, I said so we’ll maintain that dividend payout percentage in the range that we mentioned. And definitely that’s a business, basic business model. So depending on the way we are aiming for the profit levels on the entire FY basis. But this is for sure that every quarter we will definitely declare some dividend. That that’s for sure.
Unidentified Participant
Okay. Okay. Thank you so much.
operator
Thank you. We have a follow up question from Hasid Kapadia from Elara Securities.
Harshit Kapadia
Yeah, hi sir. Thanks again on turnkey construction sir. We have seen in last two years it has been open for even private sector. So can you just you know give some, you know, understanding on how has been the private sector competition in the, you know, turnkey project and has it impacted your business for rights and margin? Is there an aggression coming from private sector? It is still largely, you know, you three guys, the PSUs are getting the majority of the project, sir.
Rahul Mithal
No, no, not at all Arshit. In fact this is all these orders across sectors and as I mentioned not the rail infra sector alone, even the building sector, these are open all players whether private or psu. So we are very clear we are not bidding as rights. We are not bidding for EPC tenders, those are for construction companies to bid for whether they are private players or other PSUs. We are basically bidding for getting all on competitive basis on 10 whether in rail infra building where primarily the expected scope of work is on our bus PMC type of model where the revenue flows through us.
So that’s the basic difference between our orders and the other private players or other PSUs. So yes, even for this there are huge amount of competition but our pickup on the turnkey segment is very focused and very specific in not going into the EPC model.
Harshit Kapadia
Understood sir. Fair enough sir. Thank you very much.
Rahul Mithal
Thank you.
Unidentified Participant
Thank you. The next question comes from Parimal Mithani from Prudential Investments.
Unidentified Participant
Hello. Yes sir. Thanks for the opportunity. This is regarding your JV of with consultancy with DMV business. Can you highlight how the business is in terms of going and what’s the way ahead from there? JV with a DNV business with the Norwegian company for quality accident which you had tied up.
Rahul Mithal
That’s not a jv, that’s basically a. The partnership for that consultancy which we are doing for quality assurance. Yes, that we are working on them and we’ve got some, some particular continue working with them. Ah, we just. My director technical is here in front of me. So that’s a partnership really not a jv. And we had collaborated with them on some opportunities. Nothing very substantial in terms of revenue realization. So it’s there that, that it’s kind of an MoU which is there for collaboration and we keep looking on for more opportunities if they come, whether domestic.
The aim of that collaboration with them was if you remember, recall this was quite some time back, more than a year back where the quality assurance vertical was reinventing itself to come out of the crisis. And we were looking at various domestic and international partners to complement our gaps which we had in our capability to try and target newer clients. And for that this was one of the initiatives and many such initiatives have resulted in the fact that the quarter that went by our quality assurance vertical, which I said sometime back, has seen the bottom of the barrel and it has come out of it.
And now we have 2/3 of our quality assurance revenue is from the non Indian Railways traditional clients. So steps like these have only helped us reach that stage now.
Unidentified Participant
Okay sir, thank you. I’ll get back in the queue. Thank you.
Rahul Mithal
Thanks.
operator
Thank you. We have a follow up question from Anand B from Shema Wealth Private Limited.
Unidentified Participant
Thanks again. Just shed light on the competition and nomination point of view. So the last couple of Quarters the trend has been going down from 63 odd percent to now I think it’s coming to 53 competition versus nomination. So when you share a light or will this trend continue and so on?
Rahul Mithal
No, in fact what you’re seeing is a breakup of the order book. If you see, if you analyze the fresh inflow breakup of the competition vis a vis the nomination in fresh inflow, a larger percentage I would say about 65 to 70% are on competitive basis. And this trend is only increasing the order book breakup. Yes, if you seeing this is slight reduction, but that basically depends on maybe some of the orders on the competition basis, competitive basis have got executed. So that keeps varying. But in terms of an overall feel, just to get you a feel, most of these orders, like for example in the quarter one that went by, we got about 155 orders totaling to about 400 plus crores.
420 odd crores. A majority of them 2 third plus are on competitive basis.
Unidentified Participant
Okay. Okay. Thank you sir.
Rahul Mithal
Thank you.
operator
Thank you. As there are no further questions, I would like to hand over the call to the management for their closing comments.
Rahul Mithal
Thank you all. I’m glad that the questions which were asked really helped us give our detailed insights and in depth analysis into what is where we are. How was the quarter one and what is the the way forward for this fy? As I said in the outset, the focus now is on expeditious execution so that this young order book starts generating revenue whether it is from the export vertical or the consultancy or turnkey. And definitely by the latter part of the FY number, number one, sequentially you should definitely see an improvement. And latter part of the fy, substantial improvement.
So that overall definitely we surpass the figure of last year. That in a nutshell is to my mind the way forward for the coming fy. Thank you.
operator
Thank you sir. Thank you all for being a part of this conference call. If you need any further information or clarification, please email@investorsights.com Ladies and gentlemen, this concludes your conference for today. Thank you.
Rahul Mithal
Thank you.