Rites Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

Rites Ltd trades at ₹218, in a downtrend and 43 weeks into that stage. That is −2.7% against its own 200-day average. It sits at 38% of a 52-week range of ₹184 to ₹272. On relative strength it has been ahead of the NIFTY 500 on a trailing-13-week view for 2 straight weeks.

Today the stock is in a downtrend — week 43 of stage 4, confirmed. At ₹218 it trades −2.7% versus its 200-day average and sits at 38% of its 52-week range (₹184–₹272).

Against the market, two honest reads. Cumulative: over the last 8.0 years the stock moved +177% while the NIFTY 500 moved +150% — ahead of the index over the full window. Recent form: on a trailing-13-week view the stock has been ahead for 2 straight weeks — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

→ The trend is one thing; the bill is another. Are you paying up for it? Next: the P/E sits at the 71st percentile of its own range.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

Rites Ltd trades at 25.0× P/E, at the pricey end of its own range (71st percentile). Its long-run median P/E is 15.6×, measured across 8.0 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/E of 25.0× is at the pricey end of its own range (71st percentile), against a long-run median of 15.6× measured over 8.0 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

Why the multiple sits where it does: over the past year annual EPS moved +6.6% against a −20.7% price move — earnings outran the price, pushing the multiple DOWN its own range.

The price move, decomposed: over 5y, of the +8.9%/yr price move, ~−0.6%/yr came from earnings growth and ~+9.5 pp from the multiple (expanding). The split is the honest approximate (price return minus earnings growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is full against its own past, so the story rests on the earnings line underneath it, not the multiple.

→ Cheap or dear rides on the earnings. Are they actually growing? Next: the fundamental stage — where the business sits in its arc, and how growth has compounded.

Stage: Turning around Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

Rites Ltd reads as turning around on its fundamental arc. Turning around — profit growth swung from −15.1% at the trough to +7.6% off a 5-quarter-old trough, ROCE holding at 19.8%. The read is built from 12 quarters across 4 curves, on full evidence.

Why it matters: growth inflections are where re-ratings start — the curves say a turn is forming, so the question becomes whether the next quarters confirm it.

→ The stage names the trajectory. Next: the revenue line that produces it, quarter by quarter.

4-Factor Sector Score

56.7/100 — rank 3 of 9 in Railways · 94% evidence confidence

Rites Ltd scores 56.7 out of 100 against the 9 companies it is compared with in Railways, ranking 3. Strong business, demanding price: keep it on the quality list, but require either earnings upgrades or valuation compression.

The four contributions add to the total exactly: 14.3 + 22.7 + 6.7 + 13 = 56.7. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Revenue Revenue is the top line: everything the company billed its customers in the period.

Rites Ltd reported ₹768 Cr of revenue in the Mar 26 quarter, +27.6% year on year. That is the 4th straight quarter of year-on-year growth. Over 10 years it has compounded at 7.1% a year. The last full year, FY26, came in at ₹2,415 Cr. The last four reported quarters add to ₹2,416 Cr.

Rites Ltd reported ₹768 Cr of revenue in the Mar 26 quarter, +27.6% year on year. That is the 4th straight quarter of year-on-year growth. Over 10 years it has compounded at 7.1% a year. The last full year, FY26, came in at ₹2,415 Cr. The last four reported quarters add to ₹2,416 Cr.

FY26 revenue came in at ₹2,415 Cr (+8.9% on the year), capping 10 years at 7.1% compound. The latest quarter (Mar 26) printed ₹768 Cr, +27.6% year on year — the 4th consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +8.9% growth against the decade's 7.1% — the current year is running faster than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew +9.6% over the last 4 quarters against −0.7%/yr over the last 8 — accelerating; TTM profit +7.6% vs −4.3%/yr — accelerating.

→ Revenue grew — did margins hold as it scaled? Next: 22.0% this quarter (−9.0 pp YoY).

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

Rites Ltd's operating margin is 22.0% in the Mar 26 quarter, −9.0 percentage points against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 23.0% to 34.0%. The current quarter is running below every full year in that window.

Rites Ltd's operating margin is 22.0% in the Mar 26 quarter, −9.0 percentage points against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 23.0% to 34.0%. The current quarter is running below every full year in that window.

The latest quarter's operating margin is 22.0%, −9.0 pp against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 23.0%–34.0%.

🚨 Why the margin moved: operating margin went −8.9 pp year on year while gross margin went −8.0 pp — the loss came mostly from the gross line: input costs and pricing.

→ Margins slipped — did that reach the bottom line? Next: profit −1.4% in the latest quarter.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

Rites Ltd earned ₹139 Cr of net profit in the Mar 26 quarter, −1.4% year on year. Full-year FY26 profit was ₹454 Cr. The 10-year compound rate is 2.9%. That is 18.1% of the quarter's revenue. The same quarter a year earlier earned ₹141 Cr.

Rites Ltd earned ₹139 Cr of net profit in the Mar 26 quarter, −1.4% year on year. Full-year FY26 profit was ₹454 Cr. The 10-year compound rate is 2.9%. That is 18.1% of the quarter's revenue. The same quarter a year earlier earned ₹141 Cr.

Mar 26 profit was ₹139 Cr, −1.4% year on year. On the full year, FY26 printed ₹454 Cr (+7.1%), and the 10-year compound rate is 2.9%.

🚨 Why profit moved: revenue contributed +27.6% and the margin −9.0 pp — the quarter was revenue-led despite a thinner margin.

Pace comparison, last four quarters: profit +9.5% vs revenue +8.9%. Profit and revenue are moving roughly in step.

→ Profit rose — but did the cash follow? Next: 102% of the last 3 years' profit arrived as cash.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years 102% of Rites Ltd's reported profit arrived as operating cash — the cash follows the profit. In FY26 that was ₹327 Cr of operating cash against ₹454 Cr of profit. After ₹90.0 Cr of capital spending, ₹237 Cr was left as free cash.

FY26: operating cash of ₹327 Cr against reported profit of ₹454 Cr, leaving free cash of ₹237 Cr after ₹90.0 Cr of capital spending. Across the last 3 fiscal years the conversion rate is 102% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

Why conversion sits at 102%: the cash cycle tightened 65 days between FY21 and FY26 — cash that used to wait in the cycle now reaches the bank sooner.

Router verdict: the bigger cash user is investment — capital spending ran 2.6× depreciation over three years, so the next section's job is to check what that build-out is buying.

→ So follow the cash to where it goes. Next: ₹492 Cr of building over 3 years.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

Rites Ltd's cash conversion cycle runs 47 days in FY26, down from 112 days in FY21. Capital spending ran ₹492 Cr over the last 3 years. At FY26 sales of ₹2,415 Cr each day of that cycle holds about ₹6.6 Cr, so roughly ₹311 Cr sits inside the business at any moment.

FY26: debtors at 141 days, inventory at 11 days — roughly 0.4 months of stock waiting to sell; that is where the cash sits while it waits — for a full cycle of 47 days, tighter than FY21's 112.

The full loop: cash goes out to suppliers and production on day 0; stock waits 11 days to sell; customers pay about 141 days after that; and suppliers themselves are paid at 105 days — netting out to the 47-day cycle.

In money terms: at FY26 sales of ₹2,415 Cr, each day of the cycle holds about ₹6.6 Cr — so the 47-day loop keeps roughly ₹311 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹492 Cr over the last 3 fiscal years against ₹189 Cr of depreciation — the company is building well ahead of wear-and-tear. Capital work-in-progress stands at ₹88.0 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: the cash is going into capacity, not disappearing into the cycle — the question becomes whether the new capacity earns.

→ Does all this activity actually earn its cost of capital? Next: ROCE is 22% and the ROIC − WACC spread is +7.5 pp.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.

Rites Ltd earns a ROCE of 22% in FY26. That is up from a trough of 21% in FY17. Return on invested capital clears the cost of that capital by +7.5 percentage points, so growth here adds value rather than only size. The wiring behind it is 18.8% net margin on 0.41× asset turns.

FY26 ROCE is 22%, recovered from a FY17 trough of 21% — the full ladder below shows the fall and the climb, undoctored.

Why the return is what it is — the wiring (FY26): 18.8% net margin × 0.41× asset turns × 2.21× balance-sheet leverage ≈ 17.0% on equity. Margin is doing the heavy lifting; leverage is a meaningful part of the equation.

The capstone test — ROIC − WACC: 19.5% − 12.0% = a +7.5 pp spread. The 12.0% is a standing assumption for the cost of capital in India, not a per-stock estimate — read the sign and the size of the spread, not the decimals. A spread this wide means every rupee reinvested creates more than a rupee of value — the engine compounds.

→ Returns like these — is the balance sheet borrowing to make them? Next: debt-to-equity is 0.00.

Debt Debt-to-equity says how much of the business is funded by borrowings. Low is the safe corner; the trend matters as much as the level.

Rites Ltd carries total debt of ₹7.0 Cr against shareholder equity of ₹2,794 Cr as of Mar 26, a debt-to-equity of 0.00 — effectively unlevered. On the annual view that ratio went from 0.01 in FY22 to 0.00 in FY26. The returns elsewhere on this page are therefore earned rather than borrowed.

Mar 26: total debt of ₹7.0 Cr against shareholder equity of ₹2,794 Cr — a debt-to-equity of 0.00. On the annual view, debt-to-equity went from 0.01 (FY22) to 0.00 (FY26). The returns on this page are earned, not borrowed.

→ Who owns this, and are they adding or leaving? Next: Domestic institutions cut 2.0 points over 8 quarters.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

Domestic institutions cut 2.0 points of Rites Ltd over 8 quarters, the biggest move on the register. That takes domestic institutions to 8.7% of the company. Foreign institutions moved −0.1 points over the same window, to 3.4%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Domestic institutions: −2.0 points over 8 quarters to 8.7%; Foreign institutions: −0.1 points over 8 quarters to 3.4%; Promoters: +0.0 points over 8 quarters to 72.2%.

🚨 Why the register moved: domestic institutions drove it (−2.0 points) — distribution into the market’s bid.

→ One last check: does the safety math agree? Next: the balance-sheet safety line.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

Rites Ltd: the Z-score is not available for this stock, so we say so rather than invent one. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure. The debt, cash-flow and return sections above carry the balance-sheet evidence this page does hold, and each of them states its own reporting date.

The safety line in one sentence: the Z-score is not available for this stock, so we say so rather than invent one.

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