Buy Rites, target price Rs 330: Axis Securities

Axis Securities has buy call on Rites with a target price of Rs 330. The current market price of Rites Ltd. is Rs 291.55.
Time period given by analyst is one year when Rites Ltd. price can reach defined target.
Rites Ltd., incorporated in the year 1974, is a Mid Cap company (having a market cap of Rs 7084.10 Crore) operating in Services sector.

Rites Ltd. key Products/Revenue Segments include Consultancy Income, Turnkey Project, Other Services, Lease Rentals and Sale of Products for the year ending 31-Mar-2021.



Financials
For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 788.85 Crore, up 109.10 % from last quarter Total Income of Rs 377.26 Crore and up 57.88 % from last year same quarter Total Income of Rs 499.66 Crore. Company reported net profit after tax of Rs 174.40 Crore in latest quarter.

Investment Rationale
With a strong order book position, efficient execution prowess, and a clean balance sheet, the brokerage expects the company’s Revenues/EBITDA/APAT to grow at a CAGR of 25%/21%/20% respectively over FY21-23E. It maintains a BUY on RITES and value the company at 12.5x FY23E EPS with a target price of Rs 330, implying an upside of 12% from CMP.

Promoter/FII Holdings
Promoters held 72.2 per cent stake in the company as of 30-Sep-2021, while FIIs owned 1.11 per cent, DIIs 16.52 per cent.