RITES soars 9% on huge volumes on securing $35.8 mn overseas work order

RITES announced that it has secured a major international contract from South Africa-based Volantis Asset Finance (Pty) Ltd valued at over USD 35.8 million (~₹3,400 crore).

RITES share price movement

 

Shares of RITES surged 9 per cent to ₹235.95 on the BSE in Tuesday’s intra-day trade amid heavy volumes after the company sid it secured a major international contract from South Africa-based Volantis Asset Finance (Pty) Ltd.

 

In the past month, the stock price of the civil construction company outperformed the market by soaring 16 per cent, as compared to 7 per cent rise in the BSE Sensex. The stock hit a 52-week high of ₹287 on July 7, 2025.

 

At 10:15 AM, RITES quoted 8 per cent higher at ₹233.20, as against 0.27 per cent rise in the BSE Sensex. The average trading volume at the counter more than doubled with a combined 26.07 million equity shares changing hands on the NSE and BSE.

 

 

What’s driving RITES share price?

 

RITES announced that it secured a major international contract from South Africa-based Volantis Asset Finance (Pty) Ltd. The agreement involves the supply and commissioning of 4000 HP Cape Gauge Diesel Electric Locomotives. 

 

Valued at over $35.8 million (~₹3,400 crore), the contract is scheduled to be executed within a time period of 20 months. RITES confirmed that a formal Contract Agreement will be signed following mutual due diligence, after which the project will officially be added to the company's order book. 

 

Additionally, the company clarified that its promoter group holds no interest in the awarding entity, and the transaction does not fall within related party transactions.

 

Earlier, on July 1, RITES informed stock exchanges it received work of Project Management Consultancy (PMC) services for planning, design and development of infrastructural facilities and other related works in campus of Babasaheb Bhimrao Ambedkar University (BBAU) on cost plus PMC Fee basis. Total project cost was ₹175.41 crore excluding GST (including RITES Fees) approximately, the company said. The project has to be executed within 30 months for initial work or till the completion of allotted work whichever is later from the date of signing of agreement. 

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RITES - CareEdge Ratings rationale

 

CareEdge Ratings assigned CARE AAA; Stable / CARE A1+ ratings for RITES’ long-term / short-term bank facilities.

 

Ratings assigned to bank facilities of RITES continue to be supported by its strong managerial and financial linkages with the Government of India (GoI), which held a 72.20 per cent ownership stake in the company as on March 31, 2026. Ratings factor in RITES’ healthy and diversified order book of ₹9,416 crore as on March 31, 2026, which translates to 3.9x its FY26 operating income and provides medium-term revenue visibility, the rating agency said in its rationale.

 

Sustained profitability reflects strong execution capabilities, established client relationships, and positioning in technically complex projects. CareEdge Ratings anticipates operating profitability to remain stable in the near-to-medium term, despite with moderate pressure from competitive intensity.

 

The competitive and fragmented nature of the infrastructure consultancy and engineering, procurement, and construction (EPC) industry exerts pressure on margins. RITES undertakes turnkey projects primarily in the railways and building segment. 

 

CareEdge Ratings understands that these projects are executed on a back-to-back sub-contracting basis, with pass-through of performance risk to subcontractors through performance and financial guarantees. In such projects, RITES continues to provide consultancy services and mainly acts as a project management consultant, serving as a single point of contact for clients.  

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Management has articulated that the company does not intend to increase its exposure to state government projects and does not plan to undertake material turnkey projects outside the railways and buildings segments, the rating agency said.  ================================================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.