Good morning, ladies and gentlemen. I'm Catherine, moderator for this conference. Welcome to the conference call of RITES Limited to discuss its Q3 FY 2026 results. We have with us today Mr. Rahul Mithal, Chairman and Managing Director, Dr. Deepak Tripathi, Director, Technical and Director, Projects, Additional Charge, and Mr. Krishna Gopal Agarwal, Director, Finance, and Chief Financial Officer. At this moment, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. At the time, if you have a question, please press star and one on your telephone keypad. Please note, this conference is being recorded. In the interest of time and fairness to all participants, you are requested to restrict yourself to one question per participant. Time permits, you may come back in the question queue. Now, I would like to hand over the floor to Mr. Rahul Mithal, Chairman and Managing Director, RITES Limited.
Thank you, and over to you, sir.
Thank you. Morning, everyone. Let me start with giving the safe harbor statement. The presentation and the press release, which we uploaded on our website and exchanges yesterday and discussions during the call today, may have some forward-looking statements. These statements consider the environment we see as of today and obviously carry a risk in terms of uncertainty, because of which the actual results could be different, and we do not undertake to update those statements periodically. Let me give you an overall assessment of Q3, and then I'll leave the floor open for questions. So, 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 when I had given my commentary at the end of H1. So, whether you take the first item in terms of maintaining one order a day, yes, we got 140+ orders totaling to about INR 1,140 crores, an average of 1.5 orders a day. One export, we said we'll target one export order a quarter. We've got two this quarter, totaling to about INR 350 crores. The targeting a INR 10,000 crore order book, yes, we are already moving ahead. We are at an all-time high of 9,262, and definitely the way Q4 is also going, we should be able to try and touch 10,000 by about Q1.
4, a continuous sequential growth. So, whether it's the operating revenue or the EBITDA, there's a sequential growth of about 10%. And, 5, maintaining red lines of 20% EBITDA margins and 15% PAT margins. So we are about 24% and 18%. So, whether it is order inflow or execution of the ongoing order book, as I said, we are on a roll, and we are poised to definitely achieve what we had given a guidance of a double-digit growth on an FY to FY basis as we really step on the gas in Q4. So those are my opening comments, and I leave the floor open for specific questions.
Thank you, sir. Ladies and gentlemen, we begin the question and answer session. If you have a question, please press star and one on your telephone keypad. In the interest of time and fairness to all participants, you are re-requested to restrict yourself to one question per participant. Time permits, you may join back the question queue. We'll wait for a moment while the question queue assembles. Ladies and gentlemen, to ask a question, please press star and one on your telephone keypad. The first question comes from the line of Rehan Syed from Trinetra Asset Managers. Please go ahead with your question.
Morning to the team, and thanks for giving me the opportunity. So like, I want to understand your, how your sequential performance. So sir, you have seen the consultancy margin remains very healthy at 35.4%, but turnkey margin are significantly lower at 1.8%. So as turnkey now constitutes 49% of the total order book, so what structural changes are being made to ensure that the overall consolidated PBT margin doesn't compress as the projects scale up? This is my first question.
Yeah. So as you see our we have a blended revenue mix, and as you correctly said, there are two extremes of the margin. And we also have an export and leasing stream of revenue, which is somewhere midway. So what we try and do now that we have a healthy order book, which is a good mix of all the streams of revenue, we definitely lay down a strategy in every quarter and definitely on an FY to FY or a complete FY basis, that we you know push the levers on the mix of the orders. We are executing today, as we speak, more than 700+ live orders across the country and beyond.
So, as I said, we definitely fine-tune that and iterate it continuously in the quarter so that the red lines of 20% EBITDA margins, we are definitely able to maintain.
Okay. My second question is around your export segment-
Could you turn back the queue, please?
Okay. Okay.
Thank you. Next question comes from the line of Raghav Maheshwari from Kamaya Wealth Management Private Limited. Please go ahead.
Hi, sir, good morning. So sir, my first question will be around the export margin, sir. On this quarter, we are seeing, as stated on the PPT, approximately 13.5% of margin you have highlighted. So sir, my question is: since we have now begun ramping up exports and we are seeing the order inflow for exports as well, so where do we see these margins stabilizing for export orders? And sir, also, what kind of hindrances do you see going forward from here for the overall business?
So in terms of export stream of revenue, you see, these orders, as I have highlighted earlier, were, in the first time, most of these orders were on a global tender competitive basis. So bulk of these orders are also two major orders are on competitive basis in our last five decades, the first time. So definitely, 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, Q2 and Q3 export shipment and revenue booking has started. These are the levels of margin in which way, it's, in this range, it will settle down on a quarterly or a half yearly basis. And in terms of constraints in export business . It's not really a constraint.
It is now, more and more, we had realized this about two years back, and revisited the entire export and international consultancy strategy, that now for substantial growth in our RITES international business, we have to get orders on a global competitive basis and not just rely on the Line of Credit-funded projects. So we are now, in fact, we have ended quarter three with an all-time high order book of our international business, which is at about INR 2,150 crores, which includes the export of about INR 1,700 crores and the other infrastructure, consultancy and execution, et cetera.
Our RITES with this, while it's, it's not really a constraint, but yes, it, that's a watch-out which we will do to keep on trying to reinvent ourselves so that we get more and more international orders.
So, sir, because of the exports order, you know, revenue booking, is it safe to assume that we'll see a significant top-line expansion by, in, you know, Q1 of fiscal 2027 onwards?
Yes, for sure. So whether it is export or whether it is the turnkey orders, as I, as I pointed out, a bulk of our order, about 60% of our order book, nearly two-thirds, is very young. It's about a year or so old, whether these are the fresh export orders or fresh turnkey or even consultancy orders. So that's why the target that sequentially we will definitely continue growing in terms of top and bottom line. This is what we have seen Q3 versus Q2, and that trend will continue moving forward, both in terms and top and bottom lines.
Okay, sir. All the best. Thank you.
Thank you.
Thank you. The next question comes from the line of Dixit Joshi from Whitestone Financial Advisors Private Limited. Please go ahead.
Yeah, thanks. Yeah, thanks for the opportunity. So I have a question regarding our export business only. So you, as you have mentioned, we are at INR 1,700 crore order book as of Q3. I think last month, we received $20 million order from Mozambique, so that is not included in this.
Yes.
Our order book would be INR 1,900 crore, approximately, as of today.
Yes, very correct. This is 1,700 as of 31st December. This order of about INR 180 crore has come in Q4 in January, so that's not included in 1,700.
Okay. And so, if I see, so this INR 1,900 crore, let's say, what would be the execution timeline for this? And, you mentioned that now, since these are, we are doing getting these orders through competitive bidding, so that, earlier with what we used to do, say, 25 kind % kind of margin in export, now I think this 12%-13%, would be more sustainable. Is it fair to understand?
Yes, your assessment is very correct. And in terms of timelines, you see, this is a mixture of locomotives and coaches orders, mix of different orders. On an average, they have an execution timelines of about 2-3 years, depending on locomotives. Sometimes they have, you know, larger timeline. But on an average, I would say anything between 2-3 years. And you're correct that this is the level of margins, which will stabilize over a period of time, since most of them, including this most recent order of Mozambique, which we got in Q4, that's also on a competitive basis.
In terms of turnkey projects, last year our revenue was INR 800-
I request you to come back in our queue for a follow-up.
Okay, sure, sure. Yeah.
Thank you.
Thank you. The next question comes from the line of Shreyans Mehta from Equirus. Please go ahead.
Yeah, thanks for the opportunity. Sir, you guided for closer to 15%, whereas if I look at the nine-month number, we are closer to say, you know, upwards of 18%-19%. So is it that we are guiding conservatively or probably, you know, we will see some margin deterioration going forward?
Manish, you see, vis-a-vis quarter three has given good margin because the mix and revenue, if you see carefully, it's more of consultancy and export vis-a-vis turnkey. So what I had said was that 15% is our red line in terms of PAT margins and twenty percent is our red line in terms of EBITDA margins. So it'll be fair, not really realistic to take one quarter to be an indicator. But yes, definitely it'll be above fifteen and above twenty on an average six monthly or an annual basis.
Got it! Got it, got it. So, how should we look at export contribution in FY 2027?
So export, the good order book is now INR 1,700 crores as of December 31, and another about 180 odd crores, which we got this quarter, so I mean in January. So I think, as I mentioned, about 2-3 years execution time, you could see an average out. Definitely now, there's no looking back every quarter. That gap that we had of about 2 years of literally zero, pulling down the overall top and bottom line, now every quarter you would only see an upward swing.
Got it. Got it. I have a couple of more questions. I'll join back in with you. Thank you and all the best.
Thank you, sir.
Thank you. The next question comes from the line of Manan Poladia from MKP Securities.
Hello. Hi, sir. Congratulations on a good quarter. Thanks for the opportunity. One question on the order book side. We've seen that there's a big delta quarter-over-quarter. If you look at competition and nomination, I think it's jumped from 56 to 61. Just curious if you can give some color on, like, why the big jump, and should we expect it to be the same? Secondly, just some color on what specific projects are you still getting under nomination, considering the competition in the consultancy space in there?
So you see, in fact, the fresh order inflow on competitive basis is literally more than two-thirds or roughly 70%+. That breakup of 61 is basically, you know, the existing order book breakup. It is the breakup of the order book of 61, 39. But in terms of fresh order inflow, it is literally about two-thirds or above 70% odd. So most of the orders we are getting, whether it is across sectors, whether it's domestic or international, are on, including, as I said, this recent export order also, competitive basis. By nomination would mean primarily maybe few orders which are there under, in say, some MOU or in terms of some agreement, either with some PSU or some central or state government.
That too, primarily in terms of, let's say, our skill, which has been there and working with them for long. Those are some of the agreements which we still manage to get it on nomination. But primarily, I would say that most of our trend, every quarter, the fresh inflow contribution of competition and fresh, order inflow is getting higher.
Great. But would you say that the nomination orders that you're getting are significantly higher margin than your competition orders, or, would they not be that different?
No, not really. In fact, to the contrary, what has happened is that even the few orders that we are getting on nomination, because of the, bulk of the orders and the margins being lower in competition, competitive orders, even those clients are revisiting the nomination and the agreements, et cetera, and, having hard-nosed, negotiations to lower the margins. So, so that's why, whether it's a competition or a nomination, the overall scenario is that now you have to work on a, a broad, higher, competition, a tough, lower margins kind of scenario.
Yes, sir. Thank you. I'll get back in the queue.
Thank you.
Thank you. Ladies and gentlemen, you are requested to restrict yourself to 1 question per participant, and if time permits, you may join back with question queue . Next question comes from the line of Viraj Mithani from Jupiter Financial.
Yes, sir, thank you for the opportunity. My question is you mentioned the word disruptive growth in your in the result. What does the, can you give some color on that? That's a very strong word to mention.
Yes, Viraj, and we say it with a full sense of responsibility that FY 2027 is going to be a year of disruptive growth. You see, as you, you've been watching and many of your colleagues and peers have been watching our performance, and every quarter, the roadmap which we have been saying, you see, 2023, 2024, 2025 was a year of consolidation. It was a year of bottom growth. I mean, the bottom of the barrel, and then we consolidated, revisited, started getting orders. 2025, 2026, I had forecast will be a year of growth, vis-à-vis 2024, 2025, so we are aiming for a double-digit growth.
But since, as you see, the order book has been an all-time high and growing steadily, and these orders are now started generating revenue in every quarter sequentially, whether they are export orders or whether they are turnkey orders or consultancy orders. So definitely, 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. So that's why we see FY 2027 being pitched as a year of disruptive growth. And I repeat that that is because that is, in all parameters, we see firing on all cylinders to be able to make good the slide that we had, and especially in 2024, 2025.
Does it mean you'll be growing upwards of 20% in terms of revenue?
Well, it may be premature and, you know, kind of speculative to give numbers right now, but definitely, I mean, you can see the way things are moving on all our order book, four streams of revenue, that we will definitely aspire to be not just a year of growth, but a year of disruptive growth.
The quality assurance business is back still. Can we assume that?
Yes, it's definitely back. It's coming back to the levels that it was, where it was when we had hit the bottom on 2023, 2024, where the competition had just kicked in. So this year we are trying to, after a gap of one and a half years, after revisiting and restructuring the entire business, business, we are coming back to the that levels that we, we - when we got the bottom of the barrel in 2023, 2024.
Okay. Thank you, sir, and all the best.
Thank you.
Thank you. Next question comes from the line of Parimal Mithani.
Hello, can you hear me?
Yeah. Morning, Parimal. Go ahead. I can hear you.
Sir, I just want to know, in REMCL business, with Indian Railways electrification coming almost 99% completion, how do you see the business going ahead? Because I think they reported good numbers in the REMCL, and for the first time we have order book in REMCL.
Yes. So, good thing about REMC is that, yes, while it is definitely banking on the increased electrification and the increased traffic, so it is getting increased consultancy, and that is contributing to the revenue and the profitability. It's been doing very well, sequentially growing, YOY growing, operating at about 50%+ PAT margins. The other thing is also that it is working. It has again finalized another 1,000 MW RTC tender, which is the third one. So now we have done about 2,500 total, three tenders totaling to 2,500, and each of these tenders that we finalize requires huge amount of effort, and we get the consultancy fee from that. So that's another thing which got finalized in quarter three, a 1,000 MW RTC round-the-clock tender, so which also gave us consultancy fee.
REMC is also now doing, exploring and already started getting orders of consultancy in other streams of renewable energy provide, building up it on its experience of 10+ years. It is also now exploring avenues for international consultancy in renewables. So all the four fronts, REMC is growing. That's why you can see a growth in both the revenue, profitability, and the order book.
This INR 120 crore is for the consultancy part of the business of REMC, which is-
It is a combination of all complete.
Okay. Thank you. Wonderful.
Thank you. The next question comes from the line of Yash Jain, an individual investor. Please go ahead. I repeat, next question comes from the line of Yash Jain, an individual investor. Please go ahead.
Good morning, sir. I'm audible?
Yeah, morning. Go ahead. I can hear you.
Sir, I just wanted to know more about the competition in the consultancy segment. So is there any specific sector where we are facing a lot of competition, or any sector which we have backed out, to save margins?
You see, we have 13 different verticals, so all areas of infrastructure except oil and natural gas, and each of these sectors have different levels of competition, different category and different types of competitors, some international, some domestic. Some international competitors have set up shop here, and definitely depending on the competition size, the levels of margins of competition are different in different verticals. So it's not that we have stepped out of any of the verticals. We are getting orders in each of these verticals. That's what gives us, you know, we got 143 orders in quarter three, at a strike rate of 1.5 orders per day.
Yes, only thing that we are very clear is that we don't compromise beyond a point in our bidding to be able to, you know, overall have very, very tight margins, because as I said, our overall blend we have targeted of keeping 20%+ EBITDA margins.
Okay. Thank you, sir.
Thank you. The next question comes from the line of Anand B. from Sharemarket Private Limited. Please go ahead.
Good morning, sir. Can you hear me?
Yeah. Morning, Anand. Go ahead. I can hear you.
Yeah. So regarding the execution timeline of these export orders versus the Mozambique order of locomotives, and a couple of other orders from Nacala Rail Holdings, African Rail Company, and Tsala Logistics in South Africa. Can you explain me the status of the execution timeline of these orders?
Yes, sir. Anand, so as far as the Mozambique order is concerned, it was about 10 coach, 10 locomotives, out of which, two got shipped out, in quarter two, two in quarter three, and, you know, that is the uniqueness of the export business, that the revenue get, gets booked only when the shipping bill is made. So even if the locomotive is made, reaches the port, but we recognize the revenue when actually the shipping bill is made. So 2 + 2, 4 have gone out of, these, out of these, 10. And we are hoping and targeting that at least, you know, minimum of 4 more should definitely go in, quarter four.
So these are on track, and we expect to complete the order of 10 locomotives, ideally, definitely latest by Q1, if not by end of Q4 or early Q1. And the other orders are there. One is the most recent order of 85 locomotives, which we got. That was a order from Mozambique. The other order, which we have got, a series of orders, those are for the in-service locomotives, which is the in-service diesel locomotives, which are spare in Indian Railways due to electrification. We are converting them to the Cape Gauge, which is a smaller gauge in Africa, about 11 countries. And we have got orders, different orders totaling to about 30 locomotives. This is a developmental first, it's an initiative. We have got the designs approved.
The manufacturing of the first two locomotives has started, and definitely we should be able to move them in the early FY of 2026-2027. And once these two go and run the proving trials there, the production of the balanced locomotives will be much quicker, because these are the first two converted locomotives from Broad Gauge to Cape Gauge that will be shipped out.
Okay. You mentioned expected to complete within FY 2026 in your just in presentation in the previous quarter. So will you still stick to that timeline, or?
No, we are, as I said, the, this is for the Mozambique 10 locomotives new order.
Right.
We are still targeting, as I said, 4 have gone, at least 4 more definitely in quarter four. The last two, because they go in lots of 2. The shipment happens in lots of 2. So maybe we will try and pull it up to end of quarter four, but it may slide to quarter one, latest, in terms of actual shipment, et cetera.
With reference to the rest, the other, export orders, the Nogatole Rail Holdings, African Rail Company, and Thales Logistics orders.
That's what I said. Those locomotives are all converted. The third order of 30 locomotives are different orders.
Right.
They are all in-service locomotives converted from broad gauge to Cape Gauge. The first 2 of those are under production, and they will definitely be shipped out by early 2026-2027, the first quarter. Once they reach there and they go through the proving prototype approval, proving trials, they run there and get the go-ahead from the African Railways, then the balance would be shipped out. Subsequently, the production will start.
Okay, in a general agreement. Thank you. Thank you.
Thank you. Thank you, Anand.
Thank you. The next question from the line of Vishal Periwal from PL Capital. Please go ahead.
Yes, sir. Thanks, sir, for the opportunity. So, sir, on a turnkey segment, I think, we have been reporting both the ordering flow and order book buildup is also there. But in terms of execution, I mean, like, you know, not seeing a similar sort of, of, optimism. So, can you give some colors, where exactly things are? Where are there slow-moving orders which are impacting the execution out there, and color that improvement?
Yes, morning. You see this turnkey order book of about INR 4,500 crores, about 65% of it is about a year now, year old. And as I had indicated in last Q1-H1, quarter two, that we—these are now in the stages where all the designs have been approved, the execution agencies are in place, and the execution at the ground level will start. And we will see a sequential growth. And that's what if you see Q3 vis-a-vis Q2, there's an upward tick of about INR 60 crores in turnkey execution. And now most of them or most of these are now in the situation where, moving forward Q4, you will see definitely a double digit uptick vis-a-vis Q3, etc. So all of these turnkey orders, because most of these have a timeframe of about 3-4 years.
And by the end of first year onwards, by the, you know, the 12th-18th month period, that's when they actually start booking revenue in terms of actual physical execution and the revenue realization happening. So the, the upward tick of about INR 60 crore has already happened, Q3 with the Q2. And every sequential quarter, there will be a substantial growth in contribution from the turnkey segment.
Sure, sir, and that, that's helpful. I think you did mention, good year in FY 2027. So is it fair to say probably the good, I mean, like, you know, in terms of execution, it will start in quarter four onwards? Because you did mention turnkey will have a good number also, and others are still follow. So is that fair to say quarter four onwards will have a decent jump in the revenue growth?
Yes, yes, definitely. So quarter four, whether it is the export execution or the turnkey execution, quarter four, we are poised to be much higher than quarter three, so that our overall FY 2026 is definitely on a double digit, aiming to have a double digit growth in revenue vis-a-vis quarter, vis-a-vis FY 2025. Sorry, vis-a-vis FY 2025. And definitely, quarter four being more than quarter three, that gives us the confidence that sequentially this growth will see FY 2027 being definitely of a much higher level of growth vis-a-vis FY 2026.
Sure, sir. I think this is very helpful. Thank you very much.
Thank you.
Thank you. The next question comes from the line of Uttam Sriman from Axis Securities Limited. Please go ahead.
Yeah. Good morning, sir. Thanks for the opportunity. So if you see in nine months, as far as export is concerned, so we have done a revenue of INR 126 crore. So now, sir, what would be our guidance for quarter four in terms of export revenue? And, for that, sir, once we ramp up this export revenue, so can we, can our margins will also be increased from 13.4% to 50% once, or, or there will be some operating leverage benefit once we ramp up the export orders going forward?
So in terms of quarter four revenue, you see this, nine months, this, revenue, which has been there, is about four locomotives, about INR 120 odd crores. And as I said, definitely we will be able to, ship out four more locomotives in quarter four. So at least a step up of another about INR 120 crores minimum export revenue should be there in quarter four. And we are also moving forward, we will see the, the other locomotives and the Bangladesh coach order in the coming, you know, quarters, in the coming FY should definitely start execution, and, and, and contributing to revenue.
As far as the margin question you asked regarding the export stream of revenue, especially, which is around about 13%, this, as I have said, that most of these orders are on competitive basis, and this is the broad range where on an annual or a half yearly basis, the export margins would settle down. A particular quarter may not be a right indication, but this is a broad range where on an average basis, the export margins would settle down.
Okay, sir. That's all from my side and all the best.
Thank you.
Thank you. Next, we have a follow-up question from Manan Poladia from MKP Securities. Please go ahead.
Hi, sir. Thanks for the opportunity again. So my question with respect to your turnkey business, clearly your execution has picked up this quarter and like you're saying next quarter as well. Curious if we will close somewhere around the INR 600-INR 650 mark this year, and if you could guide a range for the next year as well as like the PBIT margin, I think that would be great, sir. Thank you.
So in terms of turnkey, the indication, what we are seeing in terms of execution of the INR 4,500 crore order book, is that, as you saw, we are aiming for at least a double-digit growth in turnkey in Q4 vis-a-vis Q3, and we will try and touch the last year overall annual levels of turnkey contribution. Because, you see, if you compare with last year, in certain quarters, the turnkey revenues were high because those were the contribution from the earlier older orders. And now in Q3, Q4 onwards, the contribution of turnkey revenues from the new younger orders. So on an annual basis, this would be the comparison.
But moving forward, Q4, Q1, and Q2, et cetera, every quarter, the contribution from the turnkey segment should gradually, definitely have a sequential, we target about a sequential growth of about double digit. In terms of overall margin, yes, the turnkey has a lowest contribution margin, but as I said, then we strategically in every quarter plan the various execution of the various streams of revenue, so that an overall mix of ideal margin of above 20%, we are able to ensure.
Great. Just a quick follow-up on that. I think last couple of quarters, since we've had a higher mix of consultancy, our margins have trended closer to the 23%-24% mark than the guided range. Next year, since we see turnkey going back up, 20% is the number that we should take?
Yes, for sure. That's why I've been saying that, on an annual basis, our red line is 20% EBITDA margins. And we will maintain, try and definitely maintain that on an half yearly on an annual basis with balance between all streams of revenue, export, consultancy, turnkey, et cetera.
Great. Thank you, sir.
Thank you. Next question comes from the line of Shreyans Mehta from Equirus. Please go ahead.
Yeah, thank you for the follow-up. So my question is pertaining to our consultancy segment. So if you see, you know, in terms of order book or revenues, it's largely, you know, in that 3%-5% growth range. So any plans, you know, to take scale this up, say, at least you know, what export orders are, or probably, you know, in, probably that 10%-15% mark over the next 2-3 years? How should one look at the consultancy segment in terms of order book and revenues?
Shreyans, you see, in consultancy, that is a sector where the highest level of competition is there in terms of fresh order inflow. So if I say that 70% odd today is the ratio overall in our fresh order inflows in a competitive basis, the larger percentage is in term of the consultancy orders. And that's why you see a smaller bump in terms of the revenue growth or the profitability, the profit, actual profit growth. But having said that, since we are constantly trying to get more and more orders at a strike rate, as I said, of 1+ order a day, and the consultancy order book is growing. Yes, you're correct, that it is at a rate of about 5% odd, but definitely it will, we are trying that.
We feel that as we expand more and more, including international orders, we've had number of bids in international orders also. We feel that we will aim to try and touch 10 odd% in terms of growth in consultancy.
Got it. Got it. So, and sir, if I can just add one more question. To previous participant you said, you know, next year we'll be ex- you know, giving out a few, rolling out a few export orders, and the first batch would be on a trial basis. So what will be the time lag between, you know, the, you know, when we get the confirmation? So what I'm trying to understand is, could there be a case, you know, where we are taking more time, and because of that, our revenues from exports could be, you know, postponed towards FY 2028?
Not really, because now, as strategically, the INR 1,700 crore order book that we have in export, plus the INR 180 odd crore which we recently got in January, is about INR 1,900 odd crore. That also has the coach, Bangladesh coach order of about INR 900 crore, which definitely the shipment will start in the coming FY. So it's a varied mix. Plus this, this Mozambique order, which we have got, this is of new locomotives, which is similar to the locomotives, which we are currently exporting the old order of 10 locomotives. So there is a mix of all types of stock in our, you know, export order book.
So, we are definitely going to be able to not get, you know, get bogged down by if by chance there is any delay in one this approval of this particular type of new developmental order. I don't see... So that is the key strategy that dip that you saw about two years back, successively-
Right.
for about two years in export revenue contribution, I don't foresee that happening again now.
Got it. Very clear. Thank you, sir, and all the best.
Thank you.
Thank you. Next, we have a follow-up question from Parimal Mithani, from Credential Investments. Please go ahead.
Thanks, once again. Can you hear me again?
Yes, Parimal, go ahead. I can hear you.
In terms of the budget, there has been increased allocation in terms of your neighboring countries, in terms of capital assets by Ministry of External Affairs. Do you think it will benefit us in the long run since we have presence in all these areas?
Yes, definitely. In fact, all the allocations, whether it is in the intra-domestic sectors, highways, railway, railways, you know, MRTS, city development, urban infra, ports, waterways and international, all these areas, these freight corridors, these high-speed corridors, the mineral corridors, each one of these has already our presence. And, in fact, in our international business, which we call RITES Videsh, at quarter three end, we have an order book of INR 2,150 crores, which includes the INR 1,700 crores of export. So which is an all-time high ever, which is the highest ever RITES Videsh order book which RITES has had. So, this is an uptick, in our international business also.
So whether it is the domestic or the international, all aspects in this budget allocation are definitely going to be useful for us, and we're going to leverage that.
Okay.
Thank you. Next, we have a follow-up question from Viraj Mithani from Jupiter Financial.
Yes, sir. I wanted to ask that do we still maintain the one customer order target a day?
Oh, yes, Viraj, we have maintained that steadily. In fact, quarter three, we have got 143 orders, which is a strike rate of 1.5. So now, successively, for about 7, now 8 quarters, we have been able to maintain a strike rate of one order a calendar day.
Sir, do we maintain, intend to maintain our dividend policy to a 95% payout in, going forward also?
Yes, for sure. We maintained that in Q3, and as I have been reiterating in every quarter, our business strategy is very clear and transparent, and we don't like to spring any surprises. So our broad policy of giving a high dividend payout would definitely be maintained.
Okay. Thank you, and all the best.
Thank you.
Thank you. Next question comes from the line of Harshit Kapadia from Elara. Please go ahead.
Yeah, hi. Thanks for the opportunity and good set of numbers, sir. Good to see growth coming back and margins also sustaining. Congrats on that. Just a few, one question from my side on the consultancy side, sir. Could you break the revenue in terms of how much has been from the QA and non-QA in terms of consultancy? That's one question.
Morning, Harshit. So thank you. You see, I can only tell you broad numbers in QA. QA, the levels which we were at 2023, 2024, the year when the competition, competitive orders, struck in, and there were four players in—besides, I mean, three more besides us. This year, the way nine months have gone, we will, and the way we have planned Q4, we will definitely after the entire, you know, reinventing the whole business, taking on new clients, varied clients, including some international order, we will come back to that level after first time in terms of the revenue where we started in 2023, 2024. So that's a huge, huge, recovery.
Obviously, the bottom line contribution from QA will not be there, but we will definitely come back to that level, and by next year, you will see a double-digit growth in terms of the QA contribution to my consultancy.
Understood. I have some questions. I'll join with you, sir. Thank you.
Thank you. Next, we have a follow-up question from Yash Jain, an individual investor. Please go ahead.
Thank you for the follow-up question, sir. Can you just throw some light on the working capital requirements in the export segment, especially after the competitive orders we are getting?
There is hardly any working capital requirement. Most of it we covered by advance. Also, our orders are structured like that, and it is very, very minimal, and in fact, it's a very staggered requirement. So that's why that's very minimal and insignificant.
Thank you, sir.
Thank you. Next follow-up question comes from Anand B., from Sharemarket. Please go ahead.
Yeah, thanks for the follow-up question. So can you just tell me what would be your, you know, expected breakup in terms of revenue breakup between consult, export and leasing for FY 2027 and FY 2028? Think on that.
So the FY 2027, a breakup of between all the segments right now would be too, I mean, speculative to be able to give you. But definitely on an average basis, you see, our business strategy has been that consultancy and export, because export also we count as a kind of a type of consultancy business, and that's what our... We are a consultancy company. So consultancy and export combined would definitely be in the range of about 70 odd%, which is, which has been our broad, you know, business strategy. And on an annual basis, if you look at quarter basis, sometimes they tend to, you know, get deviated from that because of the one particular stream contributing more. But on an annual basis, consultancy plus export would contribute about 70 odd%.
You know, the balance, leasing in about 5 odd percent, and the balance about turnkey. So, that's broadly what is our business strategy, which we try to achieve on an annual basis.
Okay, I'll join back in. Thank you.
Thank you.
Thank you. Next question is a follow-up question from Raghav Maheshwari from Kamaya Wealth Management Private Limited. Please go ahead.
Yeah, thanks for the opportunity again. So just one small question. So we have a good order book, or, you know, high order book around nine, over INR 9,000 crores. Just wanted to understand, how much of the order book we are booking, like, in terms of revenue, how much of the revenue booking in terms of percentage for, let's say, for each quarter? So, like, you know, in, in terms of percentage, can you, if, if you can guide.
No, it's not really. You see, this order is a combination of four streams of revenue, which we have of our business. So consultancy is INR 2,750 crores, export is INR 1,700 crores, turnkey is INR 4,500 crores, and balance, leasing and REMC is about INR 300 crores. So each one of these, and these total add up to about 700+ orders, which total up to this INR 9,262 crores. Now, each of these orders, they have definitely, you know, different time frames. So like in consultancy, some are studies, which could be a 6-month, 9-month study. Some are project management consultancy, which are a percentage of the infrastructure getting created, so they have a time frame of about, you know, 3-3.5 years.
Export, again, as I said, have about 2-2.5 years. Leasing, again, some are long-term leasing contracts, some are about 2-year leasing contracts. So to put one number as an average would not give a correct picture. But what you should definitely see is the overall revenue trend and overall revenue nine months, if you compare vis-a-vis YOY, in terms of profitability, there's about a 10% growth. And that's what the guidance we will try and see, FY to FY, to see our top line and EBITDA trying to reach at least a double-digit minimum.
Okay. Okay, got it. Thank you.
Thank you. Next, we have a follow-up question from Harshit Kapadia, from Elara. Please go ahead.
Yeah, thanks for the opportunity again. Just wanted to check on the turnkey construction side. Since, sir, from last three quarters, the revenue continuously declining only, and our order book is increasing. So where are we in that cycle where we will see the growth coming? Will it be Q4, or do you think it will be next year?
So, Harshit, in terms of the total turnkey, yes, it is declining, but in terms, because the, as I said, many of these orders were the last piece of the earlier order book. And the new order book, about 65% of INR 4,500 crores is about a year or plus old. And if you see, these orders have now started giving contributions. So if you see sequentially, there's a growth in INR 60 crores in turnkey. So it would not give a correct picture if you compare YOY. If you compare sequentially, there's a growth in turnkey in INR 60 crores as these young orders have started giving revenue. And definitely Q4 will be definitely minimum 10% higher than Q3 in terms of turnkey.
So every passing quarter, these turnkey projects now are in those time frames between the 12- to 18-month time frame, where the work has started on the ground level and the revenue booking has started. So every quarter sequentially, you will see a growth in the turnkey contributions. The realistic picture will be to see a sequential growth, because a YOY will not really give a very clear picture in terms of comparison. That was an older order book finishing, and this is a new order book kicking in.
Understood, sir. I have one more question, I'll just ask you after that. Thank you.
Thank you. The next question comes from Vishal Periwal from PL Capital. Please go ahead.
Yeah, so thanks for the follow-up. So even on the turnkey segment, sir, even if you do quarter-to-quarter 10% sort of growth, I think year-on-year things still will be weak. I think they will decline 5-6%. So probably it looks like, like, you know, I know the execution is picking up, but the real, I mean, the benefit of execution could happen in quarter one of next year. That's fair to understand?
Yes, you're, you're correct. Your assessment is very correct because, YOY is not a, will not. Definitely it'll be down. If you compare FY 2026 with FY 2025, it will be definitely down, as I said, because there's a gap of few quarters between the old order book winding up and the new order book kicking in. So, so that, will definitely, you know, but, as I said, the aim is to increase sequentially as much as possible, so that, when you compare maybe H2 this year with H1 and H2 next year, those would give you a, a, a better comparison in terms of, sequential growth.
Sure, sir. Sure, sir. And maybe one last thing. On the Bangladesh order, so what, whatever is happening, country to country level, I mean, relationships and all, so does this have any bearing in terms of our orders execution? Secondly, recovery of the monthly dispatches has already commenced, so any color that you can provide then that will be helpful to us and the market, sir.
No, I think our order is safe. One is in terms of it's an EIB-funded order. We have already received the advance, the 6 types of coaches which are there. 4 types of coaches, the prototypes have already got, you know, approved, and the production of the prototypes has started. We are targeting the first rake definitely by early next FY. So these 200 coaches, which is about, you know, 10 odd rakes, these are on track and we don't see. We're very close, you know, the Bangladesh Railway is in very urgent need of these coaches, and the funding is in place. As I said, the advance has already come in, so I don't see any challenge, whether in terms of executing this order or getting our money.
Sure, sir. I think that's thanks for all the answers. Thank you.
Thank you.
Thank you. The next is a follow-up question from Anand B, from Sharemarket Private Limited. Please go ahead.
Yeah, thanks for the opportunity. Just to follow up from the previous question, Anand asked about the Bangladesh order. So, you mentioned in the presentation will be executed in 2029 only. So since there is no urgent need of these coaches, so let's stick to that timeline only, execution in 2029 only. So there will be no revenue realizations in next year or anything of that sort?
No, let me clarify. The Bangladesh order is 200 coaches, and the first rake of 20 coaches, we are definitely targeting to ship out in early next FY. So the execution of the Bangladesh order should definitely start from this coming FY 2027.
Okay, okay. So early FY 2027, the first 20 coaches will then rest of it in the next couple of years going forward like that?
Yes. So normally we will be sending it in rakes of 20 coaches each. So, so the, as I said, the first rake of 20 coaches, we are trying to definitely things are on track. As I said, the prototype approvals have happened, and the, now the production is going to start, in a parallel way with the prototype also getting, you know, more fine-tuned. So as I said, the early FY 2026-2027, the first rake should start moving out and subsequently, the other rakes in 20 coaches each.
Okay, okay. And then we'll be targeting towards 2029, where the entire 200 coaches will be executed by that time then?
Yes, yes. Outer limit, as for that, the contractual requirement, FY 2029. But as I said, we will try and see to optimize and maximize, expedite it to the extent possible. That's the outer limit as for the contractual agreement.
Okay, okay. Thank you.
Thank you. The next is a follow-up question from Harshit Kapadia from Elara. Please go ahead.
Yeah, thanks. And so just wanted to check, sir. I know you have spoken about the railway, but in a positive way. But if you look at some data points like the increase in the construction of new lines as well as doubling of lines, in terms of value, we have seen a very decent growth, you know, as in ranging anywhere between 10%-20%. But in terms of kilometers, we have seen a decline. Okay, in terms of. So just wanted to check, is it right to assess, maybe not from a FY 2027 perspective, but probably we have reached a stage where number of kilometer addition every year will not be that substantial. It's just that value is higher because of maybe commodities have valued to that extent.
So probably, maybe, we are nearing an end to the rail, you know, construction cycle. Is that, is that a right, fair assessment, according to you?
I don't, I agree with your assessment. If you see the kind of seven high speed corridors, the East-West Freight Corridor, the Mineral Corridor, each of these are the huge amounts of large kilometerage. So each one of them, and for us as a consultant, which has been associated with such corridors in the past, whether it is DFCs, whether it is the current High Speed 2 corridor, which we are doing the DPR, et cetera. So we see each one of these as a huge opportunity for all our various activities that we do in terms of study, alignment studies, et cetera, PMC, et cetera.
Okay. And sir, on the seven high speed railway corridor which have been announced, have we done all seven of them, or are we involved in any, any one of them, sir?
Currently, we are doing two DPRs for two which are in process for some time now.
Okay, fair enough, sir. Thank you very much, and wishing you all the best, sir. Thank you.
Thank you. As there are no further questions, I would like to hand over the call to the management for their closing comments.
Thank you all, and thank you for the avid interest and the questions which I got. As I say always, that it's a learning experience for my team and me also, as based on your questions, we revisit our strategies and see what better we can do. As I said, we are the way it has been a satisfying quarter in terms of being able to move in a steady and focused manner in all the areas which we had... and all the milestone and all the strategy points that we had laid down at the beginning of the FY, and we had reiterated at the end of H1.
So, we are poised to leverage and build up on that on Q4, and I assure you that we are, as I said, firing on all cylinders to be able to definitely surpass the previous FY. And also, create the sufficient ground for next FY to be a year of disruptive growth. Thank you.
Thank you, sir. Thank you all for being a part of the conference call. If you need any further information or clarification, please email investors@rites.com. Ladies and gentlemen, this concludes your conference for today. Thank you.