Rites, a railway-related stock, has been witnessing severe beating from Dalal Street investors as its losses extended into the fifth straight month in November, losing a cumulative 13% of its value, reaching ₹244.40 apiece.
Though the stock made a sharp reversal in March, ending its prolonged downturn and continuing to trade higher for the next couple of months, it resumed its losing streak in July.
The company is a multidisciplinary engineering and consultancy organization, providing a comprehensive range of services from concept to commissioning in all facets of transport infrastructure and related technologies.
Axis Securities says improving earnings and a strong order book could end the bearish trend
Domestic brokerage firm Axis Securities expects that the stock may end its long bearish trend, citing improvement in the company’s earnings amid a robust order book and high-margin projects.
The company secured over 150 new orders worth ₹851 crore, taking the total order book to ₹9,090 crore and ensuring strong revenue visibility for the next 2–2.5 years.
Notably, the brokerage highlights that 34% of the order book comprises the high-margin consultancy segment, underscoring its profitability profile. Backed by a robust pipeline and increasing opportunities across the infrastructure space, the company remains well-positioned to deliver sustainable long-term growth, said the brokerage.
On the export front, the company has orders worth ₹1,541 crore, with revenue contribution from exports improving since Q2FY26. Given this momentum, Axis Securities expects the company to grow at a CAGR of 23% over FY25–FY27E.
"Turnkey projects account for 46% of the company’s order book and are expected to be a key driver of revenue growth. Although turnkey sales have currently seen a decline as most projects are in the initial stages, execution progress and transition to advanced stages are likely to accelerate revenue momentum going forward," said the brokerage.
Thus, the brokerage keeps its 'buy' rating on the stock with a target price of ₹271 apiece, which indicates an upside potential of 11% from the stock's previous closing price.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
