Rites Ltd, a state-run railway engineering and consulting company, is making significant strides in expanding its operations in the international market. The company is close to finalizing contracts worth Rs1,000 crore to supply locomotives and wagons to Zimbabwe and Mozambique. Additionally, Rites is exploring consulting opportunities related to projects and rolling stock in neighbouring countries like Nepal, Bangladesh, and Sri Lanka, as well as Latin American countries, with a focus on Chile, which shares a similar broad-gauge railway system to India.
Despite a decline in revenue and profit in the first quarter, Rites is optimistic about its future prospects. The company plans to aggressively focus on exporting rolling stock to increase its share in total revenue. It is hopeful of two orders from Zimbabwe and Mozambique could generate substantial revenue for the firm. Rites has also been actively targeting Latin American countries for exports, seeking opportunities in markets with similar gauge and voltage requirements.
In addition to rolling stock exports, Rites is keen on expanding its high-margin international project consultancy operations. The company aims to increase its share in total consultancy revenues from the current 12% to over 20%. With ongoing and prospective projects in multiple continents, Rites’ strategic initiative, Rites Videsh, plays a crucial role in its international consultancy focus.
The Railways’ decision to empanel more firms for quality assurance and inspection services impacted Rites in the first quarter. As a result, the company is now looking for such business outside the railway sector. It has obtained independent safety assessment (ISA) credentials, making it the only public sector undertaking in India with this important credential. Rites has also entered into an MoU with the Norwegian entity DNV to explore international inspection opportunities.
Despite the challenges, Rites remains a strong player in the railway engineering and consulting sector. The company’s efforts to expand its global presence and diversify its revenue streams are likely to boost its growth and profitability in the long run.