RITES Q3 FY26 earnings call.
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Revenue
₹609 Cr
verified against source
Revenue YoY
—
reported change
EBITDA
Pending
latest reported figure
Source
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Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
RITES delivered a solid Q3 FY2026 with sequential improvement across all metrics, maintaining EBITDA margins at ~24% (vs 20% red line) and PAT at ~18% (vs 15% red line). The order book reached an all-time high of INR 9,262 crore, with 140+ orders secured at a 1.5 orders/day strike rate. Export segment gained traction with 2 orders totaling INR 350 crore, taking the international order book to INR 1,900 crore. Turnkey execution began ramping with INR 60 crore sequential growth, though full revenue recognition from the young order book (65% of INR 4,500 crore turnkey book is ~1 year old) will accelerate from Q4 onward. The Bangladesh coach order (200 coaches, INR 900 crore) remains on track for first rake delivery in early FY2027. Management targets double-digit YoY revenue growth for FY2026 and projects FY2027 as a year of disruptive growth as export and turnkey execution ramps significantly. Risk: turnkey margins are structurally lower (~1.8% vs consultancy's 35.4%), and margin compression is inevitable as turnkey scales to ~49% of the order book.
Colored figures show movement against the previous available record.
Guidance to track
- Management reiterated guidance for double-digit YoY revenue and profitability growth, with Q4 expected to be significantly higher than Q3 as export shipments (4 locomotives) and turnkey execution accelerate.
- With INR 9,262 crore order book (65% less than 1 year old) and all-time high international order book of INR 2,150 crore, management projects significantly higher growth in FY2027 as export and turnkey revenue ramps.
- Turnkey execution has started picking up (INR 60 crore sequential growth in Q3). Management targets at least double-digit sequential growth in Q4, with the young order book now in the 12-18 month execution window.
- Based on 4 additional Mozambique locomotives to be shipped in Q4 (vs 4 shipped in 9M), minimum INR 120 crore export revenue is expected in Q4. Bangladesh coach deliveries to start from early FY2027.
- Management reaffirmed the high dividend payout policy, stating no surprises and commitment to returning capital to shareholders.
Risks flagged
- Turnkey margin is significantly lower at 1.8% vs consultancy's 35.4%. With turnkey constituting 49% of the order book, there is structural risk of consolidated margin compression as these projects scale up. Management maintains 20% EBITDA margin red line through strategic revenue mix management.
- Export margins have compressed to ~13.5% from historical ~25% due to competitive bidding on global tenders. While management states this is the sustainable range, any further competitive pressure could squeeze margins.
- While Q4 will grow sequentially vs Q3, FY2026 turnkey revenue will likely decline YOY as older high-revenue orders wind down before newer orders fully ramp. This gap period creates YOY headwinds.
- Analyst raised concerns about Bangladesh country-level relationships affecting the 200-coach order (INR 900 crore). Management responded the order is EIB-funded with advance received and prototypes approved, dismissing concerns.
Key quotes
- Our assessment is that we are very frankly on a roll. Our performance in Q3 is completely in line, in a steady and focused manner in all the points and the roadmap which we had identified.
- FY 2027 is going to be a year of disruptive growth. We are poised now to extract the maximum from these orders, and that's why Q4, Q1 onwards, even more, well, Q2, Q3 has been higher than Q2 in all parameters.
- In terms of export stream of revenue... the margins are tighter than the margins of historical margins of export. And the levels that you see now are as the last two quarters... in this range, it will settle down on a quarterly or a half yearly basis.
- It's not really realistic to take one quarter to be an indicator. But yes, definitely it'll be above fifteen [PAT margin] and above twenty [EBITDA margin] on an average six monthly or an annual basis.
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