RITES Ltd., a government-owned engineering consultancy firm, witnessed a rise in its stock price on Tuesday, June 3, 2025, following the announcement that it had emerged as the lowest (L1) bidder for a significant infrastructure consultancy project worth ₹28 crore floated by the Gujarat Urban Development Company Limited (GUDC).

This development adds to RITES’ growing list of project wins, reinforcing its position as a key player in the infrastructure consultancy space.

Details of the Gujarat Project Win

In its stock exchange filing, RITES stated that it had emerged as the L1 bidder for a Quality and Cost-Based Selection (QCBS) tender issued by GUDC. The scope of the project involves:

• Appointment of a Third-Party Inspection (TPI) agency for Water Supply Schemes (WSS), Underground Drainage (UGD), and Sewage Treatment Plant (STP) projects.

• These fall under Amrut 2.0 and SJMMSVY schemes meant to improve urban infrastructure across municipalities in Gujarat (ULBs of Gujarat).

• The entire contract is expected to be executed over 60 months from the date of issue.

This strategic win highlights RITES' expertise in delivering critical project consultancy services, especially in public sector urban infrastructure projects.

Positive Stock Market Reaction

Following this announcement, RITES shares saw a 2.18% increase, hitting an intraday high of ₹285.4 apiece on the Bombay Stock Exchange (BSE). By 12:30 PM, the stock was trading 0.55% higher at ₹280.85 apiece.

Importantly, the stock has gained 23.23% in the past month, reflecting investor confidence in the company’s project execution capabilities and robust order book.

Strong Q4 Financial Results Bolster Confidence

RITES also recently reported its fourth-quarter (Q4 FY25) financial results, which add further strength to its market performance:

• Net profit rose 3.4% YoY to ₹141 crore, showing stable earnings growth.

• Revenue, however, fell by 4.3% YoY to ₹615 crore, indicating some topline pressure.

• Despite this, EBITDA rose 5.4% to ₹185.5 crore, reflecting strong cost control and operational efficiency.

• EBITDA margin expanded by 564 basis points, reaching an impressive 30%, showcasing financial discipline.

Such margin expansion, despite revenue contraction, demonstrates the company’s ability to maintain profitability through internal efficiencies.

Dividend Declaration

Alongside its Q4 results, RITES announced a final dividend of ₹2.65 per share for FY2025, subject to shareholder approval during the upcoming Annual General Meeting (AGM).

• The record date for the dividend is yet to be announced.

• This consistent dividend payout pattern underlines RITES’ strong cash reserves and shareholder-friendly policies.

Past Project Wins Add to Strong Order Pipeline

This Gujarat project is not the only contract RITES has secured recently. In April 2025, the company also bagged an order from Mahanadi Coalfields, worth ₹28 crore, for detailed engineering and project management consultancy services.

This order further diversified RITES’ portfolio and reaffirmed its stronghold in project management consultancy across various sectors, including energy and urban infrastructure.

Outlook and Strategic Positioning

RITES continues to consolidate its role as a leading consultancy and project management firm in India, particularly in railways, urban infrastructure, and coal sectors. With a consistent inflow of orders and disciplined execution, the company remains a preferred choice for government and PSU contracts.

The latest Gujarat project win signals:

• Continued trust in RITES by government agencies.

• Increasing relevance of RITES in executing mission-mode programs like Amrut 2.0.

• Strengthened financials leading to better dividend yield and potential capital appreciation.

Conclusion: RITES Building a Strong Foundation for Future Growth

RITES’ emergence as the lowest bidder in a ₹28 crore Gujarat Urban Development project, combined with its recent financial performance and additional order wins, reflects a positive trajectory for the company.

The stock market response, strong EBITDA margins, and dividend payout all point to a healthy balance sheet and growth outlook. With increasing focus on urban infrastructure and sustainable city development under government schemes, RITES is well-positioned to capitalise on future opportunities in the infrastructure consultancy space.

Investors, analysts, and market watchers will keep a close eye on:

• Final contract award confirmation from GUDC.

• Execution timeline and compliance.

• Order inflow momentum for FY26.

• Dividend payout confirmation and yield.

• Broader market sentiment for PSU engineering and consultancy stocks.

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