RITES Ltd.
ISIN: INE320J01015 • Market Cap: ₹10,415 Cr
The 5-Pillar Quality Audit for RITES Ltd.
Evaluated across Profitability, Financial Health, Historical Compounding, Valuation Safety, and Ownership Governance:
1. Profitability & Capital Efficiency
Weight: 25%Measures operating margins (22.6%), Return on Capital Employed (19.2%), and equity compounding (14.6%).
2. Financial Health & Solvency
Weight: 25%Debt-to-Equity is 0.00 with comfortable interest coverage and clean working capital.
3. Growth & Compounding Track Record
Weight: 20%Historical 3Y Sales CAGR (-2.2%) and 3Y PAT CAGR (-6.4%).
4. Valuation Multiple & Margin of Safety
Weight: 15%Trades at P/E of 24.95 vs PEG of 2.97 and Dividend Yield of 3.7%.
5. Ownership Quality & Governance
Weight: 15%Promoter holding stands at 72.2%, backed by 12.2% institutional ownership.
Key Fundamental Strengths
Fortress Balance Sheet (D/E: 0.00)
The company operates virtually debt-free, shielding net margins from interest rate cycles and monetary tightening.
Consistent Market Standing (Mid Cap)
Established player in the Construction sector with an overall fundamental quality score of 65/100.
Areas to Watch & Potential Risks
Topline Stagnation (3Y Sales CAGR: -2.2%)
Revenue growth has slowed below inflation rates, indicating cyclical demand slowdown or saturated core markets.
Sectoral & Macro Headwinds (Construction)
Subject to broader cyclical demand, raw material price shifts, and regulatory frameworks governing the Construction space.
Quantitative Strategy Eligibility
Checking RITES against established Indian wealth creation frameworks:
Coffee Can Investing Framework
Fails 10%+ revenue growth or 15%+ minimum capital return benchmark over historical periods.
Quality Factor Screener (High RoIC + Low Debt)
Scorecard of 65/100 or leverage profile sits below strict quality index hurdles.
GARP / Value-Growth Blend
Provides balanced valuation margin with strong profitability scores.
Construction Sector Peer Comparison
Compare RITES directly against top industry peers by market capitalization:
| Company | 5-Pillar Score | Market Cap | P/E | ROCE | D/E | Scorecard |
|---|---|---|---|---|---|---|
| RITES Ltd. (RITES)Current | 65/100 | ₹10,415 Cr | 24.95 | 19.2% | 0.00 | — |
| Larsen & Toubro Ltd. (LT) | 69/100 | ₹5.54 Lakh Cr | 33.42 | 17.9% | 1.12 | View |
| Rail Vikas Nigam Ltd. (RVNL) | 48/100 | ₹46,517 Cr | 51.71 | 10.3% | 0.49 | View |
| NBCC (India) Ltd. (NBCC) | 79/100 | ₹23,571 Cr | 31.74 | 38.8% | 0.00 | View |
| Kalpataru Projects International Ltd. (KPIL) | 76/100 | ₹23,516 Cr | 20.69 | 22.9% | 0.43 | View |
| IRB Infrastructure Developers Ltd. (IRB) | 70/100 | ₹22,912 Cr | 24.01 | 6.0% | 0.96 | View |
Frequently Asked Questions: RITES Ltd.
Q:What is the 5-Pillar Fundamental Score for RITES Ltd. (RITES)?
RITES Ltd. has a RupeeTools Fundamental Score of 65/100, placing it in the 'Solid & Healthy' category. Its pillar scores are: Profitability (76/100), Financial Health (83/100), Growth (18/100), Valuation (70/100), and Ownership Quality (72/100).
Q:Is RITES fundamentally strong for long-term investment?
RITES currently holds a moderate quality rating of 65/100. While it operates in the Construction sector, investors should monitor its profit margins before initiating long-term positions.
Q:Does RITES pass the Coffee Can Investing filter?
No. RITES does not currently meet the strict 15% ROCE and 10% sustained topline compounding threshold mandated by the Coffee Can investing framework.
Q:How does RITES compare against other Construction peers?
Within India's Construction sector, RITES trades at a P/E of 24.95 and generates an ROCE of 19.2%. Compare its 5-Pillar score of 65/100 against top sector peers like Larsen & Toubro Ltd. (69/100), Rail Vikas Nigam Ltd. (48/100).
Regulatory & SEBI Research Analyst Compliance Disclaimer:
This 5-pillar fundamental score is an automated quantitative health check generated purely from historical public financial statements, corporate filings, and exchange disclosures for educational and informational purposes only. It does NOT constitute investment advice, a stock recommendation, or a solicitation to buy or sell securities. RupeeTools is not a SEBI-registered Research Analyst. Please consult a SEBI-registered financial advisor before making investment decisions.