RITES Ltd. delivered significantly improved June-quarter results with consolidated net profit rising 7.7% year-on-year to ₹97.78 crore from ₹90.89 crore in the corresponding quarter last year. According to latest reports from Business Standard, the state-run engineering consultancy achieved revenue from operations growth of 8.67% to ₹532.20 crore compared with ₹489.70 crore in the year-ago period. The company's profit before tax (PBT) increased 7.37% YoY to ₹130.56 crore in Q1 FY27 from ₹121.59 crore in Q1 FY26. Most notably, the company's board of directors declared its first interim dividend at ₹1.40 per share, representing 14% of the paid-up share capital for FY27. As per Business Standard, shareholders on record as of 10 August 2026 will be eligible for the payout, which is scheduled to be completed on or before 2 September 2026.
Following the earnings announcement, RITES is preparing to open much larger export markets for Indian Railways' surplus diesel locomotives by developing standard-gauge versions of the country's in-service locomotives. According to Mint, RITES chairman and managing director Rahul Mithal confirmed that the company is developing a prototype of a standard-gauge version of the in-service diesel locomotive for an Australian customer, with the prototype expected to be ready shortly for testing and validation. This initiative addresses a critical market gap, as most railway networks around the world use the 1,435-mm standard gauge while India operates on the 1,676-mm broad gauge, historically preventing Indian Railways' locomotives from being exported without extensive modification. The company has already demonstrated success with Cape gauge variants of Indian Railways' broad-gauge diesel locomotives for South Africa, with prototypes of two such locomotives ready and plans to ship them to buyers in the next month or two.
The company faced significant margin compression during the quarter, with EBITDA margin contracting to 21.54% from 23.31% in the corresponding quarter last year, as reported by Business Standard. This 80 basis points decline in operating margins indicates pressure on profitability despite the revenue growth. The margin compression suggests that while RITES maintained steady top-line expansion, rising costs weighed on operational efficiency during the quarter. Total expenses of the company during the quarter rose 10.82% to ₹434.94 crore over ₹392.46 crore in the year-ago period, contributing to the margin pressure. The March quarter had already signalled improving business momentum, with revenue rising sharply even as profitability came under pressure due to margin contraction.
On a standalone basis, RITES reported strong performance across key segments during Q1 FY27. Domestic Consultancy revenue stood at ₹284 crore, up 4.29% YoY from ₹272.31 crore in Q1 FY26, while Turnkey Construction Projects contributed ₹176.40 crore with 18.87% YoY growth from ₹148.40 crore. Domestic Leasing business increased 14.42% YoY to ₹48.73 crore from ₹42.59 crore, and Power Generation revenue rose 15.49% YoY to ₹6.04 crore from ₹5.23 crore. However, overseas consultancy revenue declined 10.21% YoY to ₹16 crore from ₹17.82 crore, and export sales fell significantly by 69.25% YoY to ₹1.03 crore from ₹3.35 crore. The company also provided important updates during the quarter, including no exceptional items reported during Q1 FY27. Additionally, IRSDC, a joint venture of RITES, received an interim payment of ₹47.04 crore on July 30, 2026, with management stating there is no impairment in the carrying value of its ₹48.00 crore investment given IRSDC's net worth of ₹251.01 crore. RITES also reported that overseas associate MMG (Israel) was struck off, with no impact on the Profit and Loss account.
Beyond exporting reconditioned diesel locomotives, RITES has secured significant international orders and is expanding its global footprint. The company has completed deliveries of locomotives to Mozambique and secured additional locomotive orders from the African nation, while preparing to begin supplies of railway coaches to Bangladesh in a week after receiving approval for the prototype of the first batch. According to Mint, RITES has also secured an order to supply nine new 4,000-hp diesel locomotives to South Africa and is developing a standard-gauge export variant of the semi-high-speed Vande Bharat train. The company closed FY26 with an all-time high order book of ₹9,416 crore, of which nearly ₹2,100 crore comprised export orders, with rolling stock accounting for the bulk of overseas business. Management's broader focus remains on expanding its international footprint, with the strategy receiving another boost in July when RITES secured a $35.82 million export order from South Africa-based Volantis Asset Finance (Pty) Ltd. to supply and commission 4,000 HP Cape Gauge diesel-electric locomotives.
