Navaratna PSU giant, RITES Ltd fell by nearly 16% since its stock split on stock exchanges. One of the key reasons for the downfall could be the overall bearish market trend. Currently, RITES is below Rs 320 levels. The stock is in focus after signing an MoU for Delhi Metro Rails. Overall, the consensus on RITES stock is Hold.
RITES Ltd Share Price:
The stock ended at Rs 317, down by 1.20% on NSE with a market cap of Rs 15,235.14 crore. The midcap stock is down by 15.68% from its ex-split date which was on September 20, where the share was closed at Rs 375.95 apiece.
Before the ex-split, RITES stock used to trade between Rs 680 to Rs 700 levels.
YTD, the stock is still up by 26.4% on BSE. The stock's adjusted 52-week high and low are at 412.98 apiece and Rs 216.15 apiece respectively.
RITES New Deal:
Earlier this week, on October 3, RITES announced that it has signed a Memorandum of Understanding (MoU) with Delhi Metro Rail Corporation (DMRC), which is renowned for operating and maintaining Delhi's extensive metro rail network.
Through this MoU, both organizations will combine their strengths to identify, secure, and execute metro projects in India and abroad.
According to the regulatory filing, this strategic collaboration will focus on offering services in areas including General Consultancy, Project Management, Detailed Design, Feasibility Studies and others. The partnership aims at tapping opportunities in the urban transit system space, delivering world-class solutions for both domestic and international projects.
Also, the alliance syncs with RITES' ongoing efforts to expand its global footprint under its 'RITES Videsh' initiative. With DMRC's extensive experience in metro rail operations and RITES' proven expertise in transport infrastructure, both entities are well-positioned to pursue emerging opportunities, it said.
RITES Bonus Issue:
RITES turned ex-bonus on September 20, for its bonus issue of 1:1 ratio, meaning, the company allotted 1 free share on existing 1 equity share. The company allotted 24,03,01,887 (Twenty-Four Crore Three Lakh One Thousand Eight Hundred and Eighty-Seven) fully paid-up Bonus Equity Shares of the face value of Rs. 10/- each in the ratio of 1:1.
With a 1:1 bonus issue, the paid-up share capital has doubled to 48,06,03,774 shares, with a face value of Rs 10 each, for Rs 480,60,37,740.
RITES has a strong track record of bonus issues and dividends. The first bonus issue by the company was 1:4 in August 2019. As per Trendlyne data, the company has delivered 23 dividends since September 2018. With a current dividend yield of 2.64%, the stock has delivered up to Rs 16.75 dividend per share in the last 12 months.
BUY/SELL RITES Share:
As per Trendlyne data, the consensus recommendation from 4 analysts for Rites Ltd. is HOLD. EPS is expected to grow by 1.8% in FY25. The 1-year average target price on RITES is at Rs 354.38, hinting at a potential 11.70%.
About RITES Ltd:
RITES Limited is a Navratna Public Sector Enterprise and a leading player in the transport consultancy and engineering sector in India, having diversified services and geographical reach. The company has experience spanning 50 years and has undertaken projects in over 55 countries in Asia, Africa, Latin America, South America, and the Middle East region.
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