Summary of earnings call for RailTel Corporation of India Ltd published on 01 Aug, 2025

RailTel Corporation of India Limited
Q1 FY26
Call date · July 29, 2025

1 · Management Commentary

Key Positives

• Strong start to FY26 with operating revenue of INR 744 crores in Q1, up 33% YoY.
• Total revenue grew 31% YoY to INR 758 crores.
• Profit before tax (PBT) increased 34% YoY to INR 89 crores; PAT up 36% YoY to INR 66 crores.
• Robust order booking of INR 721 crores in Q1; total order book at INR 7,197 crores.
• Significant traction in railway sector orders, especially Kavach and signaling projects.
• CAG offered nil comments on FY25 annual financial results.

Key Negatives

• Telecom segment growth remains stunted; market continues to be challenging.
• Certification for Kavach OEM partner is still underway, though not expected to delay execution.

Forward Guidance

• Revenue growth for FY26 expected at ~25%.
• Telecom segment to see single-digit growth; projects segment to maintain high double-digit growth.
• Capex planned at INR 350 crores for FY26, with INR 66 crores already spent in Q1; focus on data centers and telecom equipment.
• Execution of Kavach projects to span 18–24 months, with majority of revenue contribution expected in FY27.
• Expansion in data centers: Noida data center to start with 5 MW capacity (expandable to 10 MW); 4–5 Edge data centers planned for FY26.
• Exploring international business opportunities; early-stage efforts underway.
• Strategic focus on state government and Smart City projects; flexible partnership models for data centers.

2 · Q&A Highlights

Q 1 (Composite): What is the revenue and margin outlook for FY26, and how do you see growth across segments?
A (Management):
• Expect ~25% revenue growth for FY26; Telecom to grow single digit, projects segment high double digit.
• Margins for the year guided at 11–12%.
• Railways projects generally have better margins; IT projects have lower margins (typically 4–5%).

Q 2 (Composite): What is the status and outlook for Kavach orders, execution timelines, and revenue recognition?
A (Management):
• Two Kavach orders won, execution timelines of 18–24 months, with revenue mainly in FY27.
• Certification for OEM partner (Quadrant Future Tek) is underway; fieldwork has started.
• Kavach order book close to INR 500 crores; revenue is fully recognized by RailTel.

Q 3 (Composite): Can you provide a breakup of Telecom segment revenues and order book composition?
A (Management):
• NLD: INR 151 crores; ISP: INR 108 crores (INR 84 crores from RailWire, INR 24 crores from IP); Data center and others: INR 51 crores.
• Order book at INR 7,197 crores; 30–31% from railways, ~INR 500 crores from Kavach.

Q 4 (Composite): What are the plans and targets for data centers, including Edge and Noida facilities?
A (Management):
• Noida data center to start with 5 MW capacity in 2 years, expandable to 10 MW.
• 4–5 Edge data centers planned for FY26, each ~0.2 MW.
• Data center income growing at 15–20%; new models (revenue share, leasing) being explored.

Q 5 (Composite): What is the capex plan for FY26 and its allocation?
A (Management):
• Capex of INR 350 crores planned for FY26; INR 66 crores spent in Q1.
• Major allocation to data centers and telecom equipment; maintenance is not part of capex.

Q 6 (Composite): What is the status of international business and new sector opportunities?
A (Management):
• Early-stage efforts in international business; expect gradual growth including IT, ICT, and railways projects.

Q 7 (Composite): Details on OEM partnerships and execution for Kavach projects?
A (Management):
• Exclusive OEM partnership with Quadrant Future Tek for Kavach; execution involves multiple partners for field activities.

3 · Other Key Numbers

• Operating revenue Q1 FY26: INR 744 crores (Q1 FY25: INR 558 crores)
• Total revenue Q1 FY26: INR 758 crores (Q1 FY25: INR 578 crores)
• PBT Q1 FY26: INR 89 crores (Q1 FY25: INR 67 crores)
• PAT Q1 FY26: INR 66 crores (Q1 FY25: INR 49 crores)
• EPS Q1 FY26: INR 2.06 (Q1 FY25: INR 1.52)
• Order booking Q1 FY26: INR 721 crores (Q1 FY25: INR 218 crores)
• Order book as on date: INR 7,197 crores
• Kavach order book: close to INR 500 crores
• Capex Q1 FY26: INR 66 crores; FY26 planned: INR 350 crores
• Data center income growth: 15–20%
• Edge data center revenue target: INR 10 crores for FY26
• ECL provision reversal in Q1 FY26: INR 3 crores
• Project segment margin in Q1 FY26: 5.28%
• Noida data center: 5 MW initial capacity, expandable to 10 MW
• Edge data centers: 0.2 MW each, 4–5 planned for FY26
• Railways share of order book: 30–31%
• Telecom segment revenue breakup: NLD INR 151 crores, ISP INR 108 crores (RailWire INR 84 crores, IP INR 24 crores), Data center/others INR 51 crores

Note: This is an AI generated summary of the earnings call. There may be inaccuracies in the summary. Please refer to the original transcript before making investment decisions.