RITES Wins ₹50 Cr Road Development Order From Assam Govt

Railway engineering firm RITES has bagged a major order from the government of Assam, the company said on Tuesday.

What Happened: The Public Works Roads Department of the Assam government has given RITES the letter of acceptance for third-party monitoring and quality control for 47 roads, stretching for up to nearly 1000 kilometres, across the northeastern state.

The contract, worth ₹50 crore will be completed within 18 months. It has been awarded under the Asom Mala 2.0 scheme for the year 2023-24.

Earlier this year, the Indian Prime Minister laid the foundation for the second leg of the scheme. It will undertake road upgradation projects worth over ₹3,444 crore. Under this scheme, 43 roads, including 38 bridges will be upgraded as part of the South Asia Subregional Economic Cooperation Corridor Connectivity.

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RITES has received a spree of orders in the past month. Earlier in July, it received an order from Karnataka Mining Environment Corporation for the construction of railway private freight terminals. In June, RITES signed major partnerships with firms like Damodar Valley Corporation and Delhi Metro Rail Corporation. 

Brokerage Bearish on RITES: Axis Securities in its earnings preview for the first quarter of FY25 for the roads and infrastructure sector, delivered a bearish forecast earlier this month for the firm's key financial metrics for the period.

Axis forecast the firm’s revenue to decline 17% to ₹533 crore from last quarter when its revenue stood at ₹643 crore. This marks a 2% decrease year on year. Gross profit is expected to go down by 6% to ₹329 crore, the brokerage added.

Price Action: Shares of RITES were almost flat on Tuesday morning. The company was trading 0.10% lower at ₹758.90.

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