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RITES Limited

Railway engineering, project management and India’s rolling-stock export arm.

India exports trains. This is one of the companies behind those deals. When Bangladesh buys railway coaches from India or an African railway needs Indian locomotives, RITES often appears behind the deal. But exports are only one part of the story. RITES also designs infrastructure, inspects railway equipment, manages projects and leases locomotives. The headline order book is enormous relative to annual revenue. The catch is just as important: not every rupee of that order book carries the same profit margin.

The one thing to remember: A bigger order book is not automatically better. What is inside it determines the margin.

How the business works

Think of RITES as an engineering brain, project manager and railway exporter rolled into one. Consultancy is relatively asset-light and profitable. Turnkey execution can create much more revenue, but at far thinner margins. Exports and locomotive leasing add two more earnings engines. The mix between these businesses matters almost as much as total growth.

FY2025-26 snapshot

Revenue

₹2,525 crore

Net profit (PAT)

₹454 crore

Year-end order book

about ₹9,416 crore

FY26 dividend

₹7.95 per share

Balance sheet

debt-free / net-cash profile

Figures are for the financial year 2025-26 as reported by the company. Educational context only.

Where the money comes from

Consultancy - design, engineering, inspection and project management Turnkey projects - end-to-end infrastructure execution Exports - locomotives, coaches and railway equipment Leasing - locomotive rental income

What could make it much bigger?

India’s rail, metro and transport capex can keep work flowing. Rolling-stock exports can become a much larger revenue contributor. Expansion into urban transport, water, ports and green energy broadens the opportunity.

What can go wrong

Low-margin turnkey work can dilute profitability even while revenue grows.

Large projects and export orders can be delayed.

Government infrastructure spending and decisions influence order flow.

5 things to watch

  1. Order-book growth

  2. Consultancy versus turnkey mix

  3. Export deliveries and collections

  4. Operating-margin trend

  5. Cash conversion and dividend payout

Ramsam Takeaway

RITES is easiest to understand as a seller of railway and infrastructure expertise. Its unusual advantage is decades of engineering experience plus a privileged role in taking Indian rolling stock overseas. The key question is not whether it can win more work; it is whether that work is profitable enough. Do not stop at the order-book number. Watch what kind of orders are filling it.

This profile is educational context only. Ramsam does not rate companies or suggest whether to buy, hold or sell anything.