Share price of RITES Ltd closed higher today after the firm said it would consider buyback of equity shares on September 18, 2010. RITES share has gained 5.03% in last 3 days. The stock touched an intraday high of Rs 259.3, rising 7.1%.
The share trades higher than 5 day, 20 day, 50 day and 100 day moving averages but lower than 200 day moving averages. The share has lost 13.13% since the beginning of this year and gained 5.14% in one year. Later, the share closed 3.94% or Rs 9 higher at Rs 251.65 on BSE.
Total 0.51 lakh shares changed hands amounting to a turnover of Rs 1.27 crore.
Market cap of the firm rose to Rs 6,291 crore on BSE.
In a BSE filing, RITES said, "A meeting of the board of directors of the company will be held on Friday to consider the proposal for buyback of the fully paid-up equity shares of the company."
Keshav Lahoti, Associate Equity Analyst at Angel Broking said, "RITES usually generates good cash flow each year. Mostly, company used to reward shareholders with dividends as it doesn't need excess cash in the business. One month back, the company paid a final dividend. We believe it makes sense for the company to give out excess cash to shareholders so that it does not put pressure on the company's return ratios."
IDBI Capital Markets has given a 'Buy' call on RITES with a target price of Rs 300. "RITES established in 1974, is a pioneer in infra consultancy and company is a beneficiary of railway's capital outlay (rail contribute 65 around to its revenue)," the brokerage said adding the company return on equity (ROE) at 25 per cent (FY20) is one of the highest amongst its peer set.
RITES Limited is an engineering and consultancy company. The company offers transport infrastructure consultancy, engineering and project management services. It provides its services through five operational segments that include consultancy services, turnkey construction projects, export of rolling stock, equipments and spares, leasing of railway rolling stock and equipments, and power generation.