RITES Q4 FY26: Strong revenue, stable full-year profits, and a record order book

RITES ended FY26 with a familiar mix of positives and trade-offs: faster execution and a surge in exports helped push revenue higher, while quarterly margins moderated due to a high base and a changing order mix. The company also reinforced its shareholder-return posture, with a 95.4% dividend payout on FY26 PAT and a final dividend recommendation of INR 2.75 per share.

On a consolidated basis, Q4 FY26 operating revenue rose to INR 768 crore from INR 602 crore in Q4 FY25. Total revenue increased to INR 799 crore from INR 626 crore. The full year was steadier: consolidated operating revenue grew 10.0% to INR 2,415 crore and total revenue grew 9.7% to INR 2,525 crore.

Profitability in the March quarter was softer year-on-year. Consolidated EBITDA declined to INR 172 crore from INR 189 crore, and EBITDA margin fell to 22.4% from 31.4%. Consolidated PAT was broadly flat at INR 139 crore versus INR 141 crore. Management attributed the year-on-year moderation in quarterly profitability to the realization of deferred fee in Q4 FY25, which had lifted the base. For FY26, consolidated EBITDA rose 7.7% to INR 568 crore, PBT rose 7.6% to INR 608 crore, and PAT rose 7.3% to INR 454 crore, with margins described as range bound.

Segment mix: consultancy steady, exports revived, turnkey remains low margin

Standalone segment disclosures show where FY26’s growth came from. Consultancy remained the largest revenue stream, but the sharpest change was exports, supported by delivery of locomotives to Mozambique.

For Q4 FY26 on a standalone basis, segment revenues were: consultancy INR 334 crore, lease INR 44 crore, export INR 190 crore, and turnkey INR 169 crore. Exports stood out because Q4 FY25 export revenue was only INR 3 crore. Management said this was driven by supply of six locomotives to Mozambique in the quarter.

For FY26, standalone consultancy revenue grew 6.1% to INR 1,185 crore. Leasing grew 14.5% to INR 172 crore. Export revenue increased to INR 316 crore from INR 11 crore in FY25, reflecting completion of the 10-locomotive Mozambique order during the year. Turnkey revenue declined 24.4% to INR 602 crore.

The profit profile continues to highlight the structural differences between segments. In FY26 standalone, consultancy reported margin of 33.7% and profit of INR 400 crore, leasing margin of 34.9% and profit of INR 60 crore, exports margin of 15.9% and profit of INR 50 crore, and turnkey margin of 1.6% with profit of INR 10 crore. Management clarified on the concall that RITES is primarily a project management consultancy, and that turnkey accounting can inflate reported revenue while keeping the underlying consultancy fee economics similar, leading to low reported margins in turnkey.

Financial summary (as disclosed)

Note: The presentation states revenues were restated in FY25 and Q4 FY25 due to reclassification of reversal of provisions from other operating income to expenses.

Order book: record INR 9,416 crore and a younger profile

The most important operating signal from the quarter was order book strength. As of 31 March 2026, the order book stood at INR 9,416 crore, the highest ever. Segment-wise, it comprised consultancy INR 2,754 crore (29%), exports INR 1,755 crore (19%), turnkey INR 4,581 crore (48%), lease INR 206 crore (2%), and REMCL INR 120 crore (1%).

Management linked its optimism for higher growth to the order book profile. It said more than 50% of the order book is young, around 12 to 18 months old, and that infrastructure projects typically begin generating higher revenue in their second and third years of execution. The company also highlighted its cadence of one order a day and one export order a quarter.

During Q4 FY26, RITES secured INR 958 crore of projects including extensions. The split disclosed was consultancy INR 393 crore, turnkey INR 293 crore, export INR 185 crore, and lease INR 87 crore.

Exports: Bangladesh deliveries and locomotive conversions are the next triggers

Exports were a key talking point in both the presentation and the concall, partly because FY26 marked a clear break from a period of muted export execution. Management highlighted that export income crossed INR 300 crore after a gap of nearly two years.

Looking ahead, management said the export order book is at an all-time high of INR 1,700 crore plus. The key near-term contributor is the Bangladesh order for 200 coaches. Management stated that prototypes have been approved, production has started, and the first rake of 20 coaches is targeted to be dispatched in about two months. It expects multiple rakes to be delivered in FY27, with production ramping after the first rake.

A second export pathway discussed was conversion of Indian Railways diesel locomotives to Cape Gauge for export to African countries. Management said the first two prototype locomotives are ready and should be dispatched in the coming few months, and it referenced an order of about 30 locomotives for this initiative.

Margins and guidance: competitive orders to dilute mix, but floors reiterated

Management’s key caution was margin dilution from a more competitive order mix. It stated that 63% of the order book is on competitive basis and fresh order inflows are about 70% plus competitive. As these newer orders contribute more to revenue, margins are expected to soften.

However, management reiterated clear margin floors: it guided that PAT margin of 15% and EBITDA margin of 20% would not be allowed to be breached, with ongoing monitoring of the mix of high-margin orders.

On the top line, management stated an aspiration to break the company’s all-time high revenue record in FY27, while also noting that breaking all-time high profit records would likely take at least two to three years because the blend will include more lower-margin revenue.

REMC Ltd: high profitability, looking beyond rail electrification

REMC Ltd delivered another profitable year. For FY26, it reported total revenue of INR 163 crore, EBITDA of INR 121 crore, PBT of INR 121 crore, and PAT of INR 90 crore. Management added that REMC provided dividend of about INR 42 crore to RITES.

It also acknowledged an important structural shift: with Indian Railways electrification nearing 100%, growth from rail-linked power procurement consultancy is likely to be limited to traffic volume growth. Management said REMC has started taking renewable energy consultancy orders from other clients in FY27 and is pitching for international orders, expecting to secure its first international consultancy order within FY27.

Takeaways

RITES finished FY26 with a clear operating momentum: revenue growth across most segments, an export revival anchored by Mozambique deliveries, and a record order book that management considers young enough to support faster execution in FY27. The key tension remains margin mix. Management has been explicit that competitive orders will dilute margins, but it has also reiterated non-negotiable floors for PAT and EBITDA margins. With exports set to be led by Bangladesh coach deliveries and a growing turnkey contribution, FY27 becomes a test of whether RITES can scale revenue without surrendering profitability discipline.