⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
RITES - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | RITES | Market Cap | 10,496 Cr. | Current Price | 218 ₹ | High / Low | 316 ₹ |
| Stock P/E | 26.4 | Book Value | 52.4 ₹ | Dividend Yield | 3.46 % | ROCE | 20.0 % |
| ROE | 15.1 % | Face Value | 10.0 ₹ | DMA 50 | 233 ₹ | DMA 200 | 250 ₹ |
| Chg in FII Hold | -0.05 % | Chg in DII Hold | -0.03 % | PAT Qtr | 102 Cr. | PAT Prev Qtr | 66.6 Cr. |
| RSI | 39.8 | MACD | -3.88 | Volume | 18,83,709 | Avg Vol 1Wk | 9,97,049 |
| Low price | 192 ₹ | High price | 316 ₹ | PEG Ratio | -3.11 | Debt to equity | 0.00 |
| 52w Index | 21.1 % | Qtr Profit Var | 18.9 % | EPS | 8.29 ₹ | Industry PE | 16.9 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT at ₹102 Cr, up from ₹66.6 Cr, showing strong sequential growth. EPS at ₹8.29 indicates moderate earnings power.
- Margins: ROE at 15.1% and ROCE at 20.0% reflect healthy efficiency and profitability.
- Debt Ratios: Debt-to-equity at 0.00 shows a debt-free balance sheet, enhancing financial stability.
- Cash Flows: Strong operating cash flows implied by consistent profitability and zero leverage.
💹 Valuation Indicators
- P/E Ratio: 26.4, higher than industry average of 16.9, suggesting premium valuation.
- P/B Ratio: Current price ₹218 vs. book value ₹52.4 → ~4.16x, expensive relative to assets.
- PEG Ratio: -3.11, negative, reflecting weak growth-adjusted valuation despite profitability.
- Intrinsic Value: Current valuation appears stretched, offering limited margin of safety.
🏢 Business Model & Competitive Advantage
- RITES Ltd operates in engineering consultancy, transport infrastructure, and project management.
- Competitive advantage lies in government contracts, expertise in railways, and debt-free structure.
- Business model benefits from infrastructure expansion and public sector support.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between ₹200 – ₹210, near 52-week low and below DMA50.
- Long-Term Holding: Suitable for conservative investors seeking stable dividends and government-backed projects, though valuation is currently high.
✅ Positive
- Debt-free balance sheet ensures financial resilience.
- Strong ROCE (20%) and ROE (15.1%).
- Dividend yield of 3.46% provides steady income.
⚠️ Limitation
- P/E ratio of 26.4 is expensive compared to industry average.
- Negative PEG ratio (-3.11) indicates weak growth-adjusted valuation.
- Stock trading below DMA200 suggests weak momentum.
📉 Company Negative News
- Minor decline in institutional confidence with FII (-0.05%) and DII (-0.03%) holdings reduced.
- Valuation premium may limit near-term upside.
📈 Company Positive News
- Quarterly PAT improved from ₹66.6 Cr to ₹102 Cr.
- Dividend yield of 3.46% adds investor appeal.
- Debt-free structure continues to attract investors.
🏭 Industry
- Engineering consultancy and infrastructure sector trades at industry PE of 16.9, lower than RITES’ 26.4, showing premium valuation.
- Sector growth supported by government infrastructure push and railway expansion.
🔎 Conclusion
- RITES Ltd is financially stable with strong return ratios and a debt-free balance sheet.
- Valuation is stretched, limiting near-term upside, but long-term prospects remain positive given government-backed projects.
- Best suited for long-term conservative investors, with entry around ₹200 – ₹210 offering a reasonable margin of safety.
Would you like me to also prepare a comparative HTML snapshot of RITES versus IRCON International to highlight valuation and profitability differences in the railway consultancy sector?