RITES Share Price Surges Over 5% After Securing ₹27.96 Crore Project LoA

RITES' share price saw a sharp rise of over 5% during early trading on Friday following the announcement of a Letter of Acceptance (LoA) for a ₹27.96 crore project. The PSU railway stock climbed as much as 5.6%, reaching ₹224.80 per share on the BSE, reflecting strong investor confidence in the company’s growth prospects.

At 10:00 AM, RITES share price was trading 3.67% higher at ₹220.60 per share on the BSE, with a market capitalization exceeding ₹10,602 crore.

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New Project Details

The state-owned company received the LoA from South Central Railway for a project valued at ₹27.96 crore, excluding GST.

According to RITES' regulatory filing on March 6, the LoA pertains to conducting a Final Location Survey, which includes the preparation of a Detailed Project Report (DPR), final alignment design, traffic survey report, ROR calculations, cost estimation, and the development of EPC documents for a High-Speed Elevated Rail Corridor between Hyderabad-Bengaluru and Hyderabad-Chennai. The survey will utilize advanced techniques such as Airborne or Terrestrial LIDAR, which ensures precision and efficiency in railway infrastructure planning. A formal agreement will be executed in due course, the company stated.

The project is expected to be completed within eight months.

Strong Order Book and Growth Outlook

As of December 31, 2024, RITES reported its highest-ever order book at ₹7,978 crore, marking a significant increase from ₹5,690 crore in December 2023. This indicates a robust pipeline of projects, highlighting the company’s growing role in India’s railway infrastructure development. The PSU currently has 700 ongoing projects, including key strategic assignments for the government, strengthening its position as a major player in the sector.

With an increasing focus on rail infrastructure modernization, RITES is expected to benefit from government initiatives aimed at enhancing connectivity and transportation efficiency. The company has been consistently securing new projects, reinforcing its long-term growth prospects.

RITES Stock Performance

Despite the positive development, RITES’ share price has witnessed a decline of 4.5% over the past month and is down 25% on a year-to-date (YTD) basis. Over the last six months, the stock has fallen by 33%, and in the past year, it has dropped by 40%.

However, in the long run, RITES has demonstrated resilience. Over the past two years, the stock has gained 26%, and in three years, it has delivered an impressive 81% return. This reflects the company’s ability to navigate market fluctuations and generate long-term value for investors.

Market Sentiment and Future Prospects

The surge in stock price suggests that investors have responded positively to the new project announcement, expecting it to contribute to revenue growth and profitability in the coming quarters.

Market experts believe that RITES, with its diversified portfolio and government-backed projects, is well-positioned to benefit from India's expanding railway and infrastructure sector. The company’s adoption of advanced survey techniques, such as LIDAR, also places it at the forefront of technological advancements in railway planning and execution.

Going forward, the company’s ability to secure more high-value contracts, execute projects efficiently, and maintain a strong order book will be key factors driving its stock performance and market valuation.