RITES concludes final price negotiation for Rs 678 crore export order from Africa
Gurugram: RITES Ltd, (NSE: RITES, BSE: 541556) the leading Infrastructure Consultancy and Engineering company, is working to negate the impact of Covid-19 and has taken up several initiatives in view of the unprecedented current situation.
To the extent possible, the company has tried to negate the impact through remote working. In a major export order from Africa in which RITES had emerged as successful bidder in February 2020, final price negotiations for export value of USD 89.2 million (Rs 678 crore approx.) have been concluded during lockdown period through video conferencing. The contract documentation is likely to be completed soon.
Besides this, the company’s order book is sufficient for execution in the next 1-2 years. Soon after normal working is possible in our operations, we will attempt to reach full capacity at the earliest, as most of the engineering work by the company is done by in-house teams. We are also hopeful that fixed cost during the lockdown period can be largely recovered in the remaining part of the year and savings through cost reduction wherever possible.
Commenting on its impact, Mr. Rajeev Mehrotra, Chairman and Managing Director said, “We are trying our best to minimize COVID 19 impact on the company. Employees are being encouraged to work-from-home on a pan-India basis except those handling essential services. Our investments in digitisation through ERP, e-office, E Tendering etc. are helping us to shift some of our operations to a remote working environment, thus, keeping employees safety as top priority during this crisis.”
FY20 started well with strong business momentum, with key project wins and focus on timely execution. While the COVID 19 impact on Q4FY20 numbers is yet to be quantified, we do not expect it to be significant on the top-line for the financial FY20. We are confident of achieving the outlook given for financial performance of FY20, but some impact can be felt on the new orders and collection performance, as last month of the financial year plays an important role towards improving collections.
RITES is committed to the welfare of the society and in this emergency situation have contributed Rs 16 crore to PM-CARES Fund. Its employees have also volunteered to contribute two days’ Pay for April 2020.
Given the uncertainty, the overall impact in future on the operations of the company and on our clients, which may also affect us in turn, is not immediately assessable. Our business model will help us to navigate through these difficult times and gives us confidence to emerge stronger soon.