Mehta Equities has come out with its report on RITES. The research firm has recommended to "Subscribe " the IPO in its research report as on June 19, 2018.
RITES Limited (“RITES”) is a wholly owned Government, a Miniratna (Category – I) Public Sector Enterprise and a leading player in the Transport Consultancy and Engineering sector in India. RITES has an experience spanning more than 4 decades and has undertaken projects in over 55 countries including Asia, Africa, Latin America, South America and Middle East regions. RITES is the only export arm of Indian Railways for providing rolling stock overseas (other than Thailand, Malaysia and Indonesia). RITES has a significant presence as a transport infrastructure consultancy organization in the railway sector. However, they also provide consultancy services across other infrastructure and energy market sectors including urban transport, roads and highways, ports, inland waterways, airports, institutional buildings, ropeways, power procurement and renewable energy.Valuation and Outlook
We believe RITES is well placed in Design, engineering and consultancy services and enjoys the benefit of being associated with the Indian Railways. Over the years, RITES has developed specialized expertise in providing consultancy services across major market segments in the transport infrastructure sector including railways, urban transport, roads and highways, ports, inland waterways, airports and ropeways. On valuation perse the issue is well priced and is being offered at 11x FY18 Price to earnings vs Avg 20x peers and on P/BV issue is 0available of 1.9x vs Avg 3x peers. However, in the view of the reasonable valuations, buoyant outlook on railway capex, Debt Free and robust order book, we recommend investors to ‘SUBSCRIBE’ on the issue while looking at the volatility in the market, investors may see muted listing gains, with long term perspective stock can deceiver healthy returns.
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