RITES Stock Touted as a Buy with a Target Price of Rs 275 by Prabhudas Lilladher

RITES Delivers Strong Q4FY26 Performance, Reiterates Confidence in Double-Digit Revenue Growth

RITES, a leading rail infrastructure company, has reported a healthy performance in the fourth quarter of fiscal year 2026 (Q4FY26), with revenue growth of 24% year-over-year (YoY). Despite a decline in Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of 9% YoY, the company's EBITDA margin stood at 22%, a marginal decline from the previous quarter's 23%.

The company's order book has reached a record high of approximately INR94 billion (~4x trailing twelve months revenue) at the end of FY26, up from INR89 billion last year. This significant increase in order book provides strong revenue visibility for the company. Management has highlighted an improving trend in order inflows over the past month, indicating a positive outlook for the company's future growth.

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RITES' asset-light business model, negative working capital cycle, and expected return on equity (RoE) of ~19% by fiscal year 2028 (FY28E) remain key positives for the company. The research report by Prabhudas Lilladher models a 16% revenue Compound Annual Growth Rate (CAGR) over FY26-28E, compared with flat revenue growth during FY24-26.

Outlook and Recommendation

The research firm has maintained its 25x FY28E Price-to-Earnings (P/E) valuation and retains a BUY recommendation with a target price of INR275. Additionally, the stock offers an attractive dividend yield of ~3.5–4%.