RITES (RITE IN) – Q2FY27 Result Update – Exports slippage weighs on Q2 – BUY
Published on 05 Nov 2026
RITES reported a weak Q2FY27, with revenue up just 1.5% YoY and ~8% below our estimate, as dispatch of the first Bangladesh rake slipped by ~10-12 days into Q3, leaving export revenue at nil (vs INR 604mn in Q2FY26). EBITDA margin moderated to 21.9% (23.6% YoY) on a higher share of low-margin turnkey work (turnkey revenue up 66% YoY), and PAT fell 11.0% YoY to INR 971mn, 14% below our estimate. Company highlighted export shipment is expected in Q3FY27 and FY27E revenue growth is retained. Provisioning for the pay revision effective January 2027 will start in Q4FY27. The order book was broadly flat QoQ at INR 93.9bn (~3.8x TTM revenue), as ~INR 5bn of inflows offset execution, and RITES was declared L1 in a US$41mn (~INR 4bn) Sri Lanka order for five seven-coach train sets. Post the result we have marginally trimmed EPS estimate by 3%/1% for FY27E/28E but retain BUY with TP of INR265 (25x 1HFY29 EPS). RITES’ asset-light business model, negative working capital cycle and expected ~19% RoE by FY28E remain key positives. The stock also offers an div. yield of ~4-5%.
