RITES Ltd to Restart High-Value Exports to Bangladesh, Targets Growth in Africa and Middle East

RITES Ltd, the export arm of Indian Railways, is set to resume its major rolling stock exports to Bangladesh next fiscal year, marking a recovery from recent political unrest in the neighboring country. The Navratna PSU also sees growing export opportunities across African nations, including South Africa, as it ramps up project execution both domestically and internationally.

According to Rahul Mithal, Chairman and Managing Director of RITES Ltd, the company is seeing steady improvement in India and anticipates a stronger performance in the second half of the fiscal year. Export orders have begun to recover, with at least one new international order each quarter following a four-year hiatus.

A key project back on track is the Bangladesh order, which involves the supply of 200 passenger coaches at a cost of ₹915 crore, funded by the European Investment Bank. Prototype development is underway, with the first exports expected early next fiscal and revenue recognition starting from FY26.

In South Africa, RITES has secured rolling stock orders to convert diesel locomotives to cape-gauge (1,067 mm), utilizing locomotives made in India that are no longer in use due to railway electrification. If initial trials of the first six redesigned locomotives succeed, RITES anticipates additional orders, potentially expanding its footprint to a dozen neighboring African countries.

The company is also negotiating a rolling stock order worth ₹650 crore with the National Railways of Zimbabwe, pending approvals from the African Export Import Bank. “Once clearances are in place, we’ll move ahead with the supplies, though timing remains uncertain,” said Mithal.

International expansion is also underway in the consultancy space. RITES is focusing on competitive bidding, with nearly 70% of new orders in H1FY25 coming through this route, a reversal from previous quarters. This strategic shift has allowed the company to pursue high-margin contracts and build its international consultancy division, RITES Videsh, particularly in the Middle East.

Looking ahead, Mithal expects steady growth for RITES, with EBITDA margins maintained at around 20% as FY25 serves as a consolidation year. The consultancy segment recorded a margin of 29.6% in Q2, with leasing achieving 31.9%, underscoring the company’s focus on high-margin opportunities across its expanding global footprint.

HBL