Debt-Free Navaratna Stock To Hit Ex-Date This Week For Rs. 4.75/Share Dividend: Buy?

Construction firm Rites Ltd. ended Friday's closing session with a market valuation of Rs 16,787.49 Cr. Under the Ministry of Indian Railways, RITES Ltd. (previously known as Rail India Technical and Economic Service Limited) is a central public sector enterprise categorized as a Navaratna CPSE. In India, RITES is a debt-free major force in the engineering and transportation consultancy sectors. The firm is one of the top 500 listed companies in India based on its market valuation. This week, investors will likely be paying close attention to the Navaratna stock because it will trade ex-dividend on February 09, 2024.

RITES Dividend

"Pursuant to Regulation 30 read with Regulation 42 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, this is to inform you that the Board of Directors at their meeting held today i.e. on Thursday, February 01, 2024 have declared Third Interim Dividend for the Financial Year 2023-24 at the rate of Rs. 4.75 per share (47.5% of paid up share capital of the company). Further, as intimated earlier vide our letter no. RITES/SECY/NSE, dated 17.01.2024, the Record Date set for the purpose of payment of Third Interim Dividend for Financial Year 2023-24 is February 09, 2024," said RITES in a stock exchange filing.

RITES Financials

In a filing to the BSE on Thursday, RITES Ltd. reported a 12.5% decrease in consolidated profit for the quarter that ended on December 31, 2023, to Rs. 128.78 crore, down from Rs. 147.18 crores for the same time the previous year. Consolidated RITES operating revenue (consolidated), excluding other income, increased by 0.8% to Rs 683 crore in Q3FY24 from Rs 677 crore in Q3FY23. Compared to Rs 703 crore in Q3FY23, total revenue was Rs 700 crore in the quarter under review. According to the company, income decreased to Rs 699.85 crore in the December 2023 quarter from Rs 703.38 crore during the same period last year. Its EBITDA reached Rs 171 Cr with margins of 25.0%.

Mr. Rahul Mithal, Chairman and Managing Director, RITES Limited, said, "The sequential progress is in line with the direction that we had strategized in the beginning of the FY, in having received an export order after a long gap, sustained growth in our project consultancy revenue and steady growth in our EBITDA."

On the growth prospects, Mr. Mithal said, "Having achieved the milestone of being a one order a day company, we will continue to aggressively grow across all sectors and effectively leverage the Capex push on infrastructure development, in our journey of being the 'Go-To Infrastructure Consultancy Company'."

"The company has secured more than 100 orders (including extension of works) worth more than Rs 612 crore in Q3FY24, thereby achieving the target of being a one order a day company. The quarter ended with a healthy order book of Rs 5496 crore," said RITES in an exchange filing.

RITES Share Price Target

Deven Mehata - Equity Research Analyst at Choice Broking said in the current market scenario, RITES is positioned at Rs 665, undergoing a minor pullback and a healthy correction is evident in the stock. RITES is trading above important moving averages, including the 20-day, 50-day, and 100-day Exponential Moving Averages (EMA), signalling a promising potential for further upward movement, with a targeted peak at Rs 800.

Emphasizing this positive trajectory is the substantial support zone discerned near Rs 600-620 on the downside. A key observation is RITES's current trading position above critical Exponential Moving Averages, including the 200-day EMAs.

In terms of risk management, market participants are advised to set a stop-loss at Rs 545, offering a protective shield for their investment. A strategic approach involves actively exploring buying opportunities during market dips, enhancing the potential for optimal entry points. Upon scrutinizing the technical indicators and evaluating prevailing market conditions, RITES emerges as a promising buying prospect.

With a target price set at Rs 800, contingent upon the implementation of prudent risk management measures, this stock presents an attractive proposition for investors seeking potential gains in the current market environment. The observed support levels, combined with the bullish momentum, contribute to a positive and promising outlook for RITES in the dynamic landscape of technical analysis.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.