ICICI Securities's research report on RailTel Corporation of India
Railtel Corporation of India’s (Railtel) Q4FY25 net profit grew 46.3% YoY; Q4, in general, exhibits lumpiness. Railtel delivered profit growth of 27.6% in FY25, in line with the guidance of 25–30%. The company has reiterated its guidance of revenue/profit growth of 25–30% for FY26 on strong order book (OB) addition of INR 31.5bn in FY25; however, telecom revenue run-rate is slower than expected. Railtel expects its projects business’ EBIT margin at 4–5% and consolidated margin at 11–12%, which is slightly lower than expected.
Outlook
Railtel envisages a pick-up in its data centre business from FY26. We cut our FY26–27E EPS by 3–4% on slower telecom services revenue and lower projects EBIT margin; TP lowered to INR 270 (from INR 280) with a P/E multiple to 20x FY27E (unchanged). Retain SELL.
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