Expect breakthrough in Vande Bharat export efforts: RITES CMD Rahul Mithal

'From the last lot of coaches and diesel electric multiple units exported to Sri Lanka, we are expecting a revenue of close to Rs 100 crore'

As it recovers to pre-Covid growth levels, Rail India Technical and Economic Service (RITES) — the Centre’s infrastructure consultancy utility — is looking to expand its international footprint, both in consultancy and exports. RITES Chairman and Managing Director RAHUL MITHAL tells Dhruvaksh Saha about his plans for 2022-23 (FY23) and the challenges ahead. Edited excerpts:

Infrastructure is a core priority under the Centre’s economic growth plan. How is it auguring for RITES?

Our target for 2021-22 was to hit pre-Covid levels. We have done that, both in terms of top line and bottom line, which is about 7-8 per cent higher. Based on fourth-quarter trends and April, with respect to domestic and international consultancy orders across Metros, railways, and highways, I see growth in consultancy. FY23 is going to be focused on growth in consultancy, especially international projects.

After Covid-19, your export revenue and margins have gone up significantly. How does your current order book look?

Currently, we have an order book balance of Rs 440 crore. About Rs 350 crore of it will figure in our top line in the next two quarters. For fresh orders, the work process has started. We are pursuing leads across Africa, Southeast Asia, Central Asia, and Latin America.  

The catch in exports is that it’s a long-lead revenue-realisation sector. We are aiming to get some orders in the next two quarters. Their maturity into revenue could spill over into the first quarter of the next fiscal year (2023-24).

Since turnkey projects have reduced margins set against exports, the overall margins will

be under stress since the contribution of turnkey projects will be much higher. However, we will balance them through growth in consultancy — both domestic and international.

Any specific projects the company is pushing in global markets?

We are pitching Vande Bharat train exports to a number of countries and asking them to take a trial order for at least one rake. We have got an enthusiastic response because it’s a world-class, cost-competitive product.

When can we see Vande Bharat trains exported?

A number of countries have evinced an interest, especially Latin American countries. We have asked them to try one or two rakes on a trial basis to get product experience. I am sure they’ll end up buying more from us in the long run. Wherever there is electrification and intercity travel, we are pursuing the same. I see some breakthroughs in the months ahead.

It’s premature to speculate in terms of a hard timeline for fruition. Currently, we are trying to evoke interest. All these countries we’ve pitched to have established products in the sector. At an entry-level, we have seen interest in capacity and cost-competitiveness of the product. Once a country places an order for a rake, word spreads and we can leverage that to get more orders in the next few years.
 

Apropos of the Russia-Ukraine offensive and the Sri Lankan crisis, could exports see a downside risk?

From the last lot of coaches and diesel electric multiple units exported to Sri Lanka, we have a receivable of close to Rs 100 crore. We have had discussions at the highest level. We don’t foresee any problems since the shipments have reached their port.

What are your highlights for FY23 and the outlook for next?

We have intimated exchanges about orders worth over Rs 600 crore in the pipeline, in the past month and a half. Our order book is strong. The challenge for FY23 is to get export orders as early as possible. In this fiscal year, of the Rs 2,200 crore of turnkey project orders, we will see a large revenue realisation in every quarter.
 

Is the company taking up any sustainable development projects?

We had been doing a lot of work in this area in standalone consultancy projects — social and environmental impact studies, waste and water management, and studies on renewables. We have formed a sustainability vertical, where we have mobilised our internal resources to ensure all our solutions are green. Even our turnkey projects have a green element as a policy. Going forward, all our consultancy offerings will have a green element to them, irrespective of whether it is required by the client in the scope of work.