Rahul Mital, Chairman and MD of RITES, Celebrate Company's First Export Order in Four Years
Transcript
00:00 Talking about rights this morning on India market open an interesting company railway consultancy
00:06 Has had a great run-up, but recently a bit of pressure coming in
00:13 What's the outlook looking like is that?
00:15 Are you know going to pick up again for the space post elections to speak on all of this and more?
00:19 Our metal chairman and managing director rights is with us on the show very good morning
00:23 To you and thank you for speaking with us today on NDTV profit now
00:28 I want to start with what your q3 look like where you had on an average and order a day a total of
00:34 612 crores has that Peter doubt in q4 before an election season. What is the outlook there?
00:42 morning
00:44 you see we have a
00:46 Unique place that maybe we are the only infrastructure consultancy company
00:52 Whether as a PSU or or a private company which does infrastructure consultancy across all areas of infrastructure
01:00 Except maybe oil and natural gas. So whether it is rail and from airports sports highways, etc
01:06 and and that's the very reason which are you know, our
01:09 Mission or our our milestone of wanting to be a one order a day company
01:14 that team got realized in q3 where we could get hundred plus orders to think about six hundred and twelve crores and
01:21 And considering that we have a presence both in the domestic and the international arena across all sectors
01:27 The q4 trend is continuing in that
01:30 So I would consider that over a period of time on a six month or an annual basis
01:36 We would definitely be able to maintain this trend of a one order a day company
01:41 Thank you for q4 will also see one order a day how much of that is going to be export oriented?
01:47 Because you sort of after a lull of four years started to get international orders Mozambique and
01:54 Bangladesh only recently do you see that building up and contributing to margins which have been under a bit of pressure?
02:01 Yes, you're right. That was one of our biggest challenges that in about two years of forward and post that about a year and a half
02:10 so
02:11 One of our major streams of revenue that is export of rolling stock. We didn't get any order
02:17 And and that was a major breakthrough which we had again in q3
02:22 We got a first order as you said directly of about 300 crores from Mozambique
02:26 We've been declared L1 in a Bangladesh order for 200 coaches of 4900 crores and the way the things are
02:33 Progressing in this sector. We have bid for a number of opportunities
02:37 across various geographies
02:39 And I'm sure that these will mature in the coming quarters into some orders and these orders as they start
02:47 generating revenue in the coming FY
02:49 These export stream of revenue being a high margin stream of revenue
02:54 I'm sure that we're going to be able to recover the lost ground that you have had in this FY
02:59 Hi, Mr. Mithal. It's also Samina joining in a follow-up
03:03 Question to your orders in Mozambique and Bangladesh
03:07 When can we expect that to mature into revenue?
03:10 Is there a possibility this could be seen in the next financial quarter?
03:14 And also I believe that the order in Zimbabwe there was some financial turmoil there and hence there was a delay
03:19 But can we expect closure in the last quarter of this year there too?
03:23 Yes, you see the Mozambique order is for 10 locomotives and normally locomotives take a longer time for
03:31 Manufacture something from about 9 to 12 months and other revenue gets booked when actually the locomotives gets shipped out
03:41 So I would definitely consider that by end of this FY
03:45 25 the revenue from this order would start maturing in
03:49 The Bangladesh is an even declared L1 in a global tender for 200 coaches
03:55 And we are looking forward to that getting converted to a finite LOI in the coming weeks
04:00 coaches by nature have a
04:03 relatively shorter time of manufacture and even if this matures into an LOI in the coming weeks
04:10 It would definitely be able to contribute revenue in the latter part of FY 25
04:15 As far as the Zimbabwe order is concerned
04:18 Yes, this is in about few months now where the the the MOU the agreement was signed
04:24 However, we have not added it to our order book since as you correctly said there were some funding issues at their end
04:31 It's moving in the right track. We've been constant touch with them and and we are looking forward to that also
04:38 Becoming a finite order in the coming quarter
04:41 Just one point on
04:45 You know a risk to your margins
04:47 Mr. Mithal is coming from competition as more and more companies are coming into the space and I want to understand how you see that
04:55 Headwind and how you will overcome it while increasing the share of your consultancy business, which is
05:01 You know the highest in your margins
05:04 Yes, for sure. You see the there all across the various I have about 13 different verticals across various
05:11 sectors of infrastructure and in the last few years across all these
05:16 Verticals there has been a more and more shift towards
05:21 Competitive bidding in fact in the last few months
05:26 Roughly about more than two-third of our orders are on a competitive bidding board
05:32 So why will we take this as a challenge but also as an opportunity?
05:36 Vis-a-vis many of our peer PSUs who maybe are not geared up to tackle this competitive, you know environment
05:43 Yes
05:43 But then definitely these have an impact on the margins as the figures would show you quarter and quarter
05:51 but yes
05:52 what we are aiming as that we get more and more orders and that's the very reason of our
05:57 Wanting to stabilize on one order a day company so that at least in terms of absolute
06:03 EBITDA you see a substantial growth even though the margins
06:08 Show a little stress. All right. Thank you so much for speaking with us
06:13 That was the management of rights are talking about sticking to their one order a day
06:18 You
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