RITES not worried over COVID-19 impact on FY20 top-line

Government-owned RITES Ltd said on Friday it does not expect any significant impact of COVID-19 on the top-line for financial year 2019-20.

"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," it said.

RITES said FY20 started well with strong business momentum with key project wins and focus on timely execution. To the extent possible, the company has tried to negate the COVID-19 lockdown impact through remote working.

In a major export order from Africa in which RITES had emerged as a successful bidder in February, final price negotiations for an export value of 89.2 million dollars (about Rs 678 crore) have been concluded during lockdown period through video conferencing.

The contract documentation is likely to be completed soon, said RITES. Besides this, the order book is sufficient for execution in the next one to two years.

"While the COVID 19 impact on Q4 FY20 numbers is yet to be quantified, we do not expect it to be significant on the top-line for the financial FY20."

Given the uncertainty, said RITES, the overall impact in future operations and on clients is not immediately assessable. "Our business model will help us to navigate through these difficult times and gives us the confidence to emerge stronger soon."

The company said it is hopeful that fixed cost during the lockdown period can be largely recovered in remaining part of the year and savings through cost reduction wherever possible.

RITES has contributed Rs 16 crore to PM-CARES Fund and its employees have also volunteered to contribute two days of salary for April.

RITES is a public sector enterprise and a leading player in the transport consultancy and engineering sector in India having diversified services and geographical reach.

Over the past 45 years, it has undertaken projects in more than 55 countries across Asia, Africa, Latin America, South America and Middle East regions.

( With inputs from ANI )