Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
RITES Limited (NSE: RITES) Q4 2026 Earnings Call dated May. 20, 2026
Corporate Participants:
Rahul Mithal — Chief Executive Officer and Managing Director
Analysts:
Parimal Mitani — Analyst
Unidentified Participant
Dashika Kemka — Analyst
Viraj Mithani — Analyst
Hashit Kapadia — Analyst
Vishal Perival — Analyst
Presentation:
Operator
Good morning ladies and gentlemen. I am Kath again moderator for this conference. Welcome to the conference call of rights limited to discuss with Q4, FY26 and FY26 results. We have with us today Mr. Rahul Mittal, Chairman and Managing Director. Dr. Deepak Tripathi, Director Technical. Mr. Krishna Gopal Agarwal, Director Finance and Chief Financial Officer and Mr. Prem Singh Meena, Director Projects. At this moment all participants are in listen only mode. Later we will conduct a question and answer session.
At the time, if you have a question, please press star and one on a 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 yourself to one question per participant. Time permits. You may join back the question queue. Now I would like to hand over the floor to Mr. Rahul Mittal, Chairman and Managing Director Wright Flemish. Thank you. And over to you sir.
Rahul Mithal — Chief Executive Officer and 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 today may have some forward looking statements. 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. Let me start with giving you a brief overview of this quarter and the financial year.
The most reassuring thing for us is that the performance of this FY was in line with the roadmap and the strategy that we had laid down during the beginning, at the beginning of the FY and we had been watching it and updating it at every quarter. We had aimed for a double digit growth and growth in profit. We while keeping our margins secure, we broke the first gap of about two years in our export income, about 300 crores. After a gap of nearly two years, a very important milestone which we had to achieve.
We continued the steady order inflow rate of 1, 1 order a day and 1 export order a quarter. And despite the high execution in quarter four of about 750 plus crores, we ended with the highest ever order book on 31st March of 9416 crores. So all of these were in line with the roadmap which we had set and have set us a platform to leverage on this. And as we have been giving the guidance for a substantial growth, further substantial disruptive growth in the coming fy. What is also reassuring to us is that the years last two, three years of Business re engineering followed by year of consolidation.
We were aiming for FY26 to be year of growth and that has moved in the direction which we had planned strategically. So these are the broad overview on a bigger picture on the overall performance. And we’ll come to specific numbers as each one of you asks specific questions. Thank you.
Operator
Thank you, sir. Ladies and gentlemen, now we begin the question and answer session. If you have a question, please press star and one on a telephone keypad. In the interest of time and fairness to all participants, you are requested to restrict yourself to one question per participant. Time permits you may join back the question queue. Ladies and gentlemen, if you have a question, please press star and one on a telephone keypad. Wait for a moment while the question queue assembles. Ladies and gentlemen, if you have a question please press star and one on a telephone keypad.
Ladies and gentlemen, if you have a question please press star and one on a telephone keypad. We are the first question from the line of Parimal Mitani from Credential Investments. Please go ahead. Good
Questions and Answers:
Parimal Mitani
Morning, sir.
Rahul Mithal
Morning Parimal, Go ahead.
Parimal Mitani
Can you hear me properly?
Rahul Mithal
Yes, yes, morning Parimal. Go ahead. I can hear you.
Parimal Mitani
So I just wanted to know, you’ve been mentioning the disruptive growth in your personalization last two quarters.
Rahul Mithal
Yes.
Parimal Mitani
Can you highlight the reason for this optimism in terms of considering the geopolitical headwinds right now? And also if you highlight across your businesses, how do you see it going forward, starting with consultancy, sir, really helpful for us.
Rahul Mithal
Yes. So why we are saying this is that the order book profile that you see and if you see the trend of growth of order book in the last seven, eight trailing quarters, it has been showing upward swing and there’s been a substantial increase, especially in the last 18 months or so, there’s been a incremental jump in a big way. So the order book currently of 9,400 crores, a substantial portion, more than 50% of it is very young, which is about as I said, 12 to 18 months old. And these are the order, these are the orders which will start generating revenue in this year in this fy.
And that’s why in fact in the last quarter of the FY26 also you saw an increased revenue of 750 odd crores. So that’s why the young order book, normally an infrastructure project has a time span of three to four years and this is the second and third year where it starts generating more revenue. So that gives us the confidence across all our streams of revenue and that we will Start generating revenue. Whether it is consultancy where we get a percentage fee of the infrastructure cost. Whether it’s the turnkey, where we get the entire revenue in our top line or whether it is the export order book which has been an all time high of 1700 crores plus which despite the 300 crores execution in this last FY will generate more revenue.
Because the Bangladesh delivery will also start in this fy.
Parimal Mitani
Okay, sir. And so we expect to maintain this margins going ahead which we have maintained for this entire year.
Rahul Mithal
No, the margins these as these competitive orders which I said will start generating revenue. If you again compare every year ending the mix of the order book. In fact now it’s ended this financial year on the 31st of March is 63% on competitive. That’s the breakup of the the order book. If you count the fresh order inflow, it is about 70% plus. So the margins all across our streams, the margins on the new orders are much lesser. So as these new orders generate more revenue in the mix of the total revenue, the margins will definitely go down.
Yes. But as we have been giving a guidance that the red line of PAT margins 15% and EBITDA margins of 20% that in no condition will we allow that to be breached by suitably, you know, monitoring the high margin orders.
Parimal Mitani
Okay. Thank
Rahul Mithal
You. Thank you.
Operator
Thank you. Ladies and gentlemen, if you have a question please press star and one on a telephone keypad. I repeat, ladies and gentlemen, if you have a question please press star n1 on your telephone keypad. The next question comes from the line of Lakshmi Narayanand GK from Shema well Private limited. Please go ahead.
Unidentified Participant
Able to hear me?
Rahul Mithal
Yes, go ahead.
Unidentified Participant
Sir, could you throw some light on turnkey construction projects that I see the margins are very low for it. So I just want to understand some nature of this business. Because I’m new to new. New for covering the company.
Rahul Mithal
Yeah, sure. So let me be clear. We are not a construction company. We are a project management consultancy company. So what you see in a while the order size in a turnkey is large. That’s why it is a large portion of the order book. Our scope of work remains the same. To be able to explain to you an example. Let’s see. Our. Let’s say our fees is 5%. So if in a 100 crore project our fee is 5 crores. In a consultancy mode the client gives us an order of 5 crores. In a turnkey mode he gives us an order of 105 crores.
Our scope of work remaining same. So we are, our role remains the same. Certain clients like educational institutions etc. Primarily building projects like to deal with a single window. So they give us in the turnkey mode. That is why the denominator being large in turnkey projects, while the scope of work and our revenue remain, you know, the revenue remaining same, the margins are much lesser in turnkey. But to be able to reiterate the key point, our role is that of a consultant. Whether the mode of order is in a consultancy mode or a turnkey mode, it’s just a difference in the method of accounting.
Unidentified Participant
Yeah, I got it. Thank
Rahul Mithal
You.
Operator
Thank you. We have the next question from the line of Dashika Kemka from Amy Fincock. Please go ahead.
Dashika Kemka
Hi. Thank you for the opportunity. I have a couple of questions. Firstly, could you help us with the impact that the competitive projects will have on the working capital position of the company? Would it in any way dilute the working capital position or it would not have an impact.
Rahul Mithal
So ma’, am, our working capital requirement is barely minimal. That’s the way we structure all our orders of consultancy. So there is no really going to be impact, significant impact in any way because as a business model our working capital requirement is hardly any.
Dashika Kemka
All right. And apart from that, do you see any raw material related headwinds impacting the margins going ahead apart from the competitive portion already having a minor impact?
Rahul Mithal
Again, the contracts that we give for execution of the CDR about 700 plus live consultancy order that we are executing, the contracts that we give for execution, they all of them, most of them have a price variation clause for the execution agency. Our fee as a consultant is a percentage of the infrastructure cost. So in terms of the impact on fuel or raw material costs etc. We don’t see any major risk coming to our margins or.
Dashika Kemka
And there is no execution. Would you expect any execution risk as well?
Rahul Mithal
Not really. Not really. The infrastructure construction projects across our various. We have 13 different verticals. We don’t foresee any, any major risk in any of the sectors in terms of terms of execution. We just have to keep a watch on the. Some of the costs like travel costs etc, because being a consultants and I said 700 plus live project, we have travel costs, an important cost both for our domestic and a lot of international projects also. That’s the only element which we have to keep a close watch on to keep a close watch on the margins.
Dashika Kemka
Thank you so much.
Rahul Mithal
Thank you. Thanks.
Operator
Thank you. Ladies and gentlemen. If you have a question, please press star and one on a telephone keypad. We request the participants to restrict yourself to one question in the initial round and join back the queue for more questions. Next question comes from the line of Viraj Mithai from Jupiter Financial. Please go ahead.
Viraj Mithani
Yeah, good morning sir. My question is. Other expense have gone up in this quarter and the year. Why is that? What is the reason for that?
Rahul Mithal
Which specific figure are you referring to?
Viraj Mithani
Other expenses. Other expenses. When you see the number.
Rahul Mithal
So basically yes. So there are two major contributions to these other expenses. One is the. We have moved these 10 locomotives of Mozambique, right. And especially if you see six in the. In the last quarter. So the logistics for this movement is also is also an important similarly for the warranty provisions which we make. So these are two important elements which are the related. You know, execution of our export order. And since these 10 locomotive the entire order was executed in this FY. This has seen a comparison YOY.
This has seen.
Viraj Mithani
Hello.
Rahul Mithal
Yes. Did you get that? Yes. I said because this entire 10 locomotives Mozambique export order was executed in this year. That’s why these two elements which are related to an export order execution see an increase yoy.
Viraj Mithani
Okay. So will be the same feature. Because going forward also this can expense will be higher or they’ll be plateauing down this year.
Rahul Mithal
So as because the execution of export orders will be much higher this year there will be a slight increase. But we will since Bangladesh. The major quantum of export contribution this year will be primarily from Bangladesh order which. Which will have lesser logistics cost because it has to move by rail. So to that extent it may get slightly neutralized. Increase will not be substantial. Even though there will be an increase in the export revenue.
Viraj Mithani
I’m very sorry to interrupt.
Operator
Please join back like you saw.
Viraj Mithani
Yeah. Okay, I’ll do that.
Operator
Thank you. The next question from line of Hashit Kapadia from LR Securities. Please go ahead.
Hashit Kapadia
Yeah. Hi. Congrats sir on a good numbers on revenue terms. Just few questions from my side. So on consultancy. Sir, can you give the breakup between quality assurance and what is the consultancy. Because it was a flat in this quarter. That’s the first question.
Rahul Mithal
Morning Arshit. Thank you. So the overall consultancy YOY has seen a growth of 6%. And this is a year of real redemption for us in our quality assurance vertical. We have crossed. We have reached. When this hit hit of the competitive quality assurance for the railway sector of business started hitting us in the year 2324. We reinvented the entire business. And there has been a 16% increase in our QA business within this overall consultancy. And we touched an all time again revival and came back crossed the figure of the QA business revenue, quality assurance revenue which were there in 23:24.
So all in all the contribution of QA has come back to the same levels which it was at the beginning of 2324.
Hashit Kapadia
That would be what? 70 odd crore, sir?
Rahul Mithal
No, it is much, much more. It has different elements which get interspersed in the various consultancy verticals. So it’s very difficult to give a separate head wise breakup of the entire. Because consultancy revenue of total 1185 crores comes from 13 different verticals. But the account of our various orders from our quality assurance vertical has shown that we have come back to the levels which we were there at least in terms of revenue contribution, even with a tighter margin where the hit started about two years back.
Hashit Kapadia
So you have back to FY24 numbers. Okay, great. Yes, FY24 numbers.
Rahul Mithal
In terms of. In fact with the key variation that we call a diversification of our QA business where it used to be about 55% of the IR element in our QA revenue, now it is about reverse. The non IR element is roughly about 60% plus.
Hashit Kapadia
Okay, okay, I have few more questions. I’ll join back in the queue, sir. Thank you. Thank
Rahul Mithal
You.
Operator
Thank you. The next question comes from Vishal Perival from PL Capital. Please go ahead.
Vishal Perival
Yes sir. Thanks for the opportunity. In terms of our export, can you give some color like how exactly the execution of pending order book will be? Say for example, we have done 10 coach. I mean like you know, the Mozambique order we have already supplied. So what is the spending? And then for the Bangladesh also, if you can just give some color around that, sir.
Rahul Mithal
Yes. So with this execution of the Mozambique order, with the 1750 export order balance, one of the key elements of this is the 200 coaches of Bangladesh and they are fully on track which as we have been indicating the first rake of 20 coaches we are definitely trying to send. The prototypes have been approved, the final production has started, they are in the finishing stage. So the first rake should definitely go in two months time. And with that once the first rake goes, we should be able to maximize as many rakes with gaps of at least 3, 4 weeks minimum in this FY.
Try to step it up after the production rates will increase after the delivery of the first week. And this is the main contributor which is going to be there for the export revenue. Export of rolling stock revenue in this fy. Besides, as I had indicated in the last quarter, we have a very important developmental exercise where we Are converting the in service diesel locomotives, the spare diesel locomotives of Indian Railways and converting them to Cape Gauge and proposing to export to African countries.
So the first two locomotives also again the prototypes are ready and we should be able to push them in the coming few months. Once that the first two goes the opportunity for sending more. Because we have an order of about 30 locomotives motor for the in service locomotive. And we should be able to definitely keep pushing them.
Vishal Perival
Okay, so just maybe one continuation with that. So the order that we have of almost like 1700 odd crores. So what sort of execution that one can see out of that in FY27?
Rahul Mithal
You see we did about 300 crores in FY26 and I V are aiming definitely much above the levels of 300. As I said it will be. It will be premature to peg a real number. But what I can safely say is with the first rake, once the first rake moves out because this is the first rake after approval of the prototypes which happened recently, this month itself, it will give a clearer picture in the number. Each rake consists of 20 coaches. So there are about 2, 200 coaches which have to be sent in the next two, three months.
The exact number of rakes which we can send in this FY will become a better clarity. So maybe at the end of Q1 I will be able to give a clearer number in terms of the growth vis a vis 300 crores. But this is for sure it will be much higher than 300 crores.
Vishal Perival
Okay. Sure sir. I’ll come back in the queue sir.
Operator
Thank you. We have our next question is a follow up question from Viraj Mithai from Jupiter Financial. Please go ahead.
Viraj Mithani
Yes sir. So now since most of the good amount of orders will be getting executed in this two year what should be the earning trajectory of of the rights? Like if you can just give some color on that.
Rahul Mithal
See Viraj, what we are pitching now for this FY as an ambitious target is to break the records of our revenue. All time high revenue. We will definitely try and that’s our aspiration for this year. So once we. But as you would appreciate the related EBITDA in those years and this was achieved were very much higher compared to what we are now. Similarly the blend will also be slightly different in this year with turnkey starting to contribute more which will be a lesser margin. So while we will aspire for definitely breaking the record for an all time high revenue in this fy the profits while we are aiming to have a growth but will not be able to break the all Time high records of profit that may take a subsequent at least minimum two to three years to break those records.
Because these revenue will have to grow substantially, substantially much higher with these lower margins to break the profit records also. So that gives a bigger picture of the next 23 years time frame.
Viraj Mithani
So the all time high profit was net profit of 633crores. You take out two all time high net profit for the company in last 10 years would be 633 crore which I can see from the table here.
Rahul Mithal
All time high profit for the consolidated profit all time high has been 571 crores.
Viraj Mithani
Okay, so that will take time to be breaking on because of competition.
Rahul Mithal
Yes. And definitely the margins in the blend mix in the total revenue. So while the revenue will definitely try to try and cross the all time high but the profits will not be able to cross the all time high they said.
Viraj Mithani
But will the profit grow by some 1020 double digit margins or that will be also a bit difficult for company to maintain?
Rahul Mithal
Profits will grow. To give a exact number is too premature. But profits will grow.
Viraj Mithani
Okay. Okay. Thank you and all the best.
Rahul Mithal
Thank you. Thank you.
Operator
Thank you. Ladies and gentlemen. If you have a question please press star and one on a telephone keypad. The next is a follow up question from Parimal Mitani from Credential Investments. Please go ahead.
Parimal Mitani
Can you hear me? Hello.
Rahul Mithal
Yes, go ahead Parimal.
Parimal Mitani
Sir, in terms of your RMCL business we reach around 163 crores of revenue. And that is almost close to 90 crores. So how do you see this business since you know with terms of diesel consumption being government tried to reduce the diesel consumption, do you think this business will be getting more traction going on?
Rahul Mithal
Yes. So RMCL as you correctly said has grown by 16% and the profits have grown by 19%. So it’s about 163 crores. The total revenue and profit has been 90 crores. And it’s given a substantial dividend to us of about 42 crores. You see the electrification having nearly reached reached about 100% on the Indian railway system. The growth in the consultancy revenue from this stream of power purchase will be limited to only the growth in the volumes of traffic on the IR network. So what RMCL is doing for further charting out a growth in the coming years is already started taking in this FY other consultancy orders in the renewable energy business from different clients.
And also started taking pitching for taking international orders. So in the coming FY and the coming FY’s besides these growth steady Growth from the Indian railway stream of business. We see RMCL getting revenue from these two new streams of revenue that is which they have already started getting ordered and which will grow. As a consultant expert with this experience of about 1112 years in the renewable energy business as well as getting some international orders which we definitely, we are sure in this FY itself we will get our first international consultancy order for rmcl.
Parimal Mitani
Okay sir. And so second question if I can answer.
Rahul Mithal
Please join back with
Operator
Qso.
Parimal Mitani
Okay,
Operator
Thank you. Next is a follow up question from Hashad Kapadia from LRA Securities. Please go ahead.
Hashit Kapadia
Yeah, thanks for the opportunity again sir. On the macro side I just wanted to understand. So there’s been a decent rise in the railway budget in this year as well, you know and looking at the macro headwinds, you know there has been a talk that the capex is what has to come down if the government wants to ensure that the country spending remains to be in the healthy situation. So there are other spending which are required. Do you think there would be some delay in spending on railway contracts or railway budget or infrastructure capex or are you getting a sense from them that it’s not going to get cancelled but there could be some delays or you will see second half to be better than the first half.
Something that you can give a sense about sir.
Rahul Mithal
So Arshit, our assessment of our order book and the opportunities we are getting, we are since we have order book across all various domains and each one of them as you said has got a success, substantial contribution in the CapEx overall CapEx budget of the government I don’t see any major impact on our consultancy whether it’s fresh orders or for the progress of the construction. So that our fee as a consultant, you know, getting the requisite fee from various milestones. So in fact if you see the recent orders which we have been getting and even in this quarter in the last one and a half months we have been getting fresh orders across whether it is railways from various PSUs, private sidings, Indian railways from highways, ports, bridges, airports.
You have got a recent big order for airport consultancy, another one for shipbuilding cluster from Kandla. So I don’t see our strike rate of fresh orders as well as the execution going down and if the execution is progressing at its normal pace, our related milestone consultancy fee continues to come at a regular rate.
Hashit Kapadia
Understood? Very well explained sir. Thank you sir.
Rahul Mithal
Thank you.
Operator
Thank you. Ladies and gentlemen. If you have a question please press star and one on a telephone keypad. We have a follow up question from Parimal Mitani from Credential Investments. Please go ahead.
Parimal Mitani
Hello sir, the previous colleague answered the question. So you answered them. Thank you. Thank
Vishal Perival
You.
Operator
Thank you. Ladies and gentlemen, if you have a question please press star and one on the telephone keypad. I repeat ladies and gentlemen if you have a question please press star and one on your telephone keypad. Next we have a follow up question from Hashit Kapadia from LRS Securities. Please go ahead.
Hashit Kapadia
Thanks for the question again sir. So just on the turnkey projects, just wanted to you know check sir, though you know the decline has come down but we have still not, you know reached the last year’s number. When do you think will be able to reach last year’s number? So if you can give us a you know, status on the projects, you know, where are we? Are they, you know reaching the milestone phase now or they are still some time away?
Rahul Mithal
Yes Harshit. So the turnkey revenue got is lesser by about 200 crores. And the order book of 4580 crores of turnkey substantial, substantial portion of it is at the now the young stage. It is in the times frame of 1 to 2 years window and that’s the time where the contracts are in place, the execution has started and in fact these 1 or 2, 3/4 they will start generating revenue in a substantial way. So since the order book is here young nearly about 2/3 of it of the turnkey order book and considering as I said a time span of three to four years for a turnkey project the most the real time when it starts generating a revenue is from the second year onward.
So many of our projects, the IITs and IIMs etc the building vertical, some of our rail infra with siding projects which we have taken on the turn mode. These will start generating revenue in this FY and we foresee that we should definitely be able to come back our projections based on the execution of each of these big projects to at least the turnkey revenue levels of last year.
Hashit Kapadia
Understood sir. Fair enough. Wishing you all the best sir. Thanks. Thank
Rahul Mithal
You. Thank you.
Operator
Thank you. Ladies and gentlemen, if you have a question please press star and one on a telephone keypad. Ladies and gentlemen, if you have a question please press star and one on a telephone keypad. I repeat ladies and gentlemen if you have a question please press star and one on a telephone keypad. As there are no further questions I would like to hand over the call to the management for their closing comments.
Rahul Mithal
Yes, thank you. So as I said at the outset the foundation for Growth year Building up on the growth of FY26 has already been created as you can see from the numbers and the breakup of the order book. And the one of the strongest signal from the result was you see not just the rise in revenue and profits, but the underlying the growth emerging from all the three elements of high margin, I.e. Consultancy, leasing being an all time high and exports. So all of these three streams of revenue contributed to the growth both in top and bottom line.
So this fy, while these will continue to grow and as I summarize in the term turnkey segment which will also contribute, the key focus of ours will be to continue to focus on, you know, the a mix of higher margin projects and the turnkey project. So that while maintaining a growth on the top line, we secure our PAT and EBITDA margins as per the guidance that we’ve given. So we are sure that we will definitely grow in this FY and our basic model of rewarding our shareholders with a high dividend payout ratio.
That model is going to continue. Thank you. Thank you very much.
Operator
Thank you sir. Thank you all for being a part of this conference call. If you need any further assistance or information or clarification, Please email@investorsright.com Ladies and gentlemen, this concludes your conference for today. Thank you.