RITES (RITE IN) – Q1FY27 Result Update – Exports deferred to Q2; growth story intact – BUY
Published on 05 Aug 2026
RITES delivered an in-line Q1FY27 performance, with revenue growing 9% YoY, while EBITDA margin moderated to 21.5% (23.0% YoY), largely due to a higher share of low-margin turnkey projects. Export revenue remained muted at INR 10mn as rake-based revenue recognition shifted to Q2FY27, with the first Bangladesh rake scheduled for dispatch shortly. The order book reached a record ~INR 94.5bn (~4x TTM revenue), rising sequentially despite execution, supported by INR 6.7bn of order inflows during the quarter. Management remains on track to achieve its INR 100bn order book target in FY27E and reiterated guidance of double-digit revenue growth, with consolidated EBITDA/PAT margins of at least ~20%/~15%. RITES’ asset-light business model, negative working capital cycle and expected ~19% RoE by FY28E remain key positives. We expect revenue to clock a 16% CAGR over FY26-28E, a sharp improvement from flattish growth over FY24-26. Factoring in the impact of the 4th Pay Commission revision effective January 2027, we cut our FY28E EPS by 3%. We maintain our 25x FY28E P/E multiple and retain BUY with a revised TP of INR 267. The stock also offers an attractive dividend yield of ~4-5%.
