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Informist, Tuesday, Aug. 4, 2026

By Upasika Singhal

MUMBAI - RITES Ltd. is expected to see a healthy rise in profit and revenues for the June quarter, supported by execution of a healthy order book, brokerages tracking the company said. However, the company's earnings margin is likely to be weighed down due to higher operating costs and lower number of order inflows in the quarter, brokerages said.

The state-run engineering consultancy and transport infrastructure company is expected to report a net profit of INR 918 million for the June quarter, according to the average of estimates from four brokerages. This will be up 15% from INR 801 million in the year-ago quarter. However, on a sequential basis, the net profit of the company will be down 29%. The highest estimate for the company's profit is INR 940 million from Axis Securities Ltd. and the lowest is INR 887 million from 360 ONE Capital Market Pvt. Ltd.

The company is expected to report revenues of INR 5.50 billion for the June quarter, according to the estimates, up 12% on year from INR 4.90 billion. However, sequentially this will be a 28% decline in revenues. The highest estimate for revenue in the June quarter is INR 5.82 billion from Axis and the lowest is INR 5.16 billion from Elara Securities Pvt. Ltd. The company's revenue growth is supported by the large executable order book, Axis Securities said.

The quarter-on-quarter decline in net profit and revenues is mostly due to a slow start to the financial year and negligible inflow due to a lower number of projects being awarded, Prabhudas Lilladher Pvt. Ltd. said. The company has set itself an order inflow target of INR 100 billion for the current financial year but order inflows in the June quarter were only around INR 2 billion, the brokerage said. Since RITES is a company with a diversified portfolio, its performance will recover in the coming quarters, Axis Securities said.

RITES is expected to post earnings before interest, tax, depreciation, and amortisation of INR 1.2 billion for the June quarter, up over 42% from the year-ago quarter, according to four estimates. Higher sales are likely to boost EBITDA but the EBITDA margin will fall due to an increase in costs, Axis Securities said. The highest estimate for the company's June quarter EBITDA is INR 1.27 billion from Axis Securities and the lowest is INR 1.15 billion from Elara Securities. The EBITDA margin will decline to around 21-22% from 23.3% a year earlier, though it would remain above the company's guided range of 18-20%, brokerages said.

The infrastructure sector suffered from subdued execution in the June quarter as project awards remained low and road construction slowed first due to an extended summer and then due to the onset of the monsoon. Engineering, procurement, and construction companies relied largely on existing order books in the June quarter, brokerages said. However, analysts expect diversified infrastructure companies with healthy balance sheets and strong execution capabilities to benefit as project awards pick up in the second half of financial year 2026-27 (Apr-Mar).

Despite a muted first half, the outlook for the infrastructure sector remains positive, supported by sustained government capital expenditure, healthy order books and an expected recovery in highway project awards, and improved execution in the second half of FY27, brokerages said.

RITES Ltd. is a public sector enterprise under the Ministry of Railways. The company provides consultancy, engineering, and project delivery services for railways, highways, metro railways, tunnels, bridges, as well as for urban development, buildings, airports, and ports among others. The company will detail its June quarter earnings Tuesday. Investors will look out for signs of continued government spending on roads, railways, urban infrastructure and power transmission, although competitive bidding, execution delays, and elevated working capital requirements remain key risks.

At 1302 IST, shares of the company were traded at INR 217.50 apiece on the National Stock Exchange, down marginally. The stock has risen over 6% since the company announced its earnings for the March quarter.

Of the four research reports on the company available with Informist, three have a "buy" recommendation on the stock, with an average target price of INR 263, which is 21% higher than the current market price. One brokerage has a "hold" call on the stock with an average target price of INR 284.

Following are the June quarter earnings estimates for RITES Ltd. from four brokerages, in descending order of the estimate of net profit, in INR million:

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Edited by Pankaj Aher

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