Here is the second of the four mid cap stocks investment ideas belonging to sectors that are emerging as out-performers in the medium term
RITES LTD BSE: 541556 NSE : RITES (Sector: Engineering Consultancy)
RITES Limited is a public sector enterprise established in 1974 and a leading player in the transport consultancy and engineering sector in India, having domestic and geographical reach
The major business engagements of the company are consultants, engineers, and project managers in railways, highways, airports, ports, ropeways, urban transport, and inland waterways in India and abroad. The company also provides services of third-party inspection, quality assurance, construction supervision & project management etc
RITES is led by a well qualified management team of professionals heaving vast experience. It has good visibility of revenues with an order book size of in excess of Rs 5000 crores as at 30th June 2022. It’s current annual revenues stand at about Rs 2900 crores
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Attractive valuations:
The company’s current price to earning (P/E) ratio of around 12 which compares favourably with its historical median of 13.5. It has a healthy dividend yield of more than 5.5% and the dividend pay-out ratio is about 80%
The liquidity position of the company remains strong. It is a zero debt company having substantial unencumbered cash
Considering the foregoing, we recommend a Buy for RITES at the closing price of 2nd Sept 2022 of Rs 299 for a medium term upside of 33% at Rs 400
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Disclosure
The report above has been written sourcing data, information and facts as reflected in the company’s Annual Report, Presentations, Announcements, fundamentals, Stock Market price and volume data and analysis / interpretation there-of.
