RITES Limited, a public sector railway company, recently secured a significant order from an African rail firm, a deal that underscores its long-term financial growth and strong shareholder returns despite recent stock fluctuations.
Boosting African Rail Networks
RITES Limited has announced a new contract with an African Rail Company. This order involves supplying two fully overhauled ALCO locomotives, intended for use across Zimbabwe, Mozambique, and Botswana.
The contract is valued at 3.6 million USD (CIF), marking a substantial international project for the Indian PSU. RITES aims to complete and deliver this order within the next nine months.
What the Order Entails
The agreement specifies the supply and commissioning of “in-service Cape Gauge ALCO Diesel Electric Locomotives.” These locomotives will be fitted with new Cape Gauge Bogies, Traction Motors, and a modern Control System, along with upgraded air brakes.
RITES will oversee the overhaul process at a nominated facility. Additionally, the company will provide warranty support and deploy a technical team to ensure smooth integration and operation of the locomotives.
RITES Share Performance
On Friday, July 4, shares of RITES Limited experienced a slight dip, closing down 0.65 percent at Rs 284 apiece. The company’s total market capitalization currently stands at Rs 13,649.15 crore, as per NSE data.
Looking at short-term performance, the stock has shown positive movement, gaining 1.75 percent in the last week and 4.40 percent over the past two weeks. However, it has seen a decline of 23.73 percent over the last year.
Despite recent short-term fluctuations, RITES has delivered impressive returns over longer periods. Over the past two years, the stock has climbed 55.05 percent. More notably, it has soared by 138.49 percent in the last three years and 117.10 percent over the last five years.
Rewarding Shareholders
RITES Limited has a consistent history of rewarding its shareholders. In January, the company paid a dividend of Rs 1.90 per share.
Last year, shareholders received multiple dividends: Rs 4.75 in February, Rs 2.50 in August, Rs 5 in September, and Rs 1.75 in November. The company has also issued bonus shares, with a 1:4 ratio in 2019 and a 1:1 ratio in 2024.
- RITES secured a $3.6 million order to supply two overhauled ALCO locomotives to an African rail company for deployment in Zimbabwe, Mozambique, and Botswana.
- The contract is expected to be executed within nine months.
- Despite a recent slight dip, RITES shares have delivered impressive long-term returns, including a 138% gain over three years.
- The company has a strong record of shareholder returns through consistent dividends and bonus issues.
This new international order highlights RITES’ growing presence in the global railway sector and its commitment to contributing to railway infrastructure development beyond India.
