InvestorQ : Why did RITES report such sharp fall in profits in the Sep-20 quarter?
prachi Patwardhan made post

Why did RITES report such sharp fall in profits in the Sep-20 quarter?

sara Kunju answered.
6 months ago

RITES Ltd reported a 44% drop in its net profit for the Sep-20 quarter at Rs.132 crore. RITES consults for the Indian Railways and due to most rail services being shut for a better part of the period, it also led to limited business opportunities for RITES. Total revenues for the Sep-20 quarter also fell sharply to Rs.500 crore from Rs.888 crore in Sep-19 quarter.

EBITDA or the earnings before interest, taxes, depreciation, and amortization stood at Rs.189 crore while the profit after tax or PAT stood at Rs.132 crore. EBITDA and PAT margins were, however sustained at 37.9% and 26.5% respectively as in both the cases, the sales had also fallen proportionately, leading to holding of margins.

RITES managed to achieve its highest ever order book position of Rs.6661 crore, which assures of good traction in the coming quarters. This includes a massive order worth Rs.948 crore during the Sep-20 quarter. Despite the lower top line and bottom line on a yoy basis, the growth on a sequential basis is indisputable.

RITES management is confident of being able to take up implementation of projects as soon as normalcy is restored. In terms of guidance of business, the company is optimistic about a moderate growth in FY21. Rites specializes in the area of transport consultancy and engineering services to the Indian Railways.