RailTel Corp shares plummet 7% on weak operational performance in Q3

RailTel shares are down 16 percent year-to-date.

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Shares of RailTel Corporation of India plunged over 7 percent on January 28 after the company reported a sharp decline in its operational performance for the December quarter.

The company's EBITDA margin sharply contracted to 15.8 percent in Q3, a significant downturn from 19.4 percent reported in the same quarter a year ago. The company's operational performance was dented by a spike in expenses on account of higher license fees to the Department of Telecommunication and project costs.

At 10.45 am, shares of RailTel Corp were trading at Rs 339.90 on the NSE.

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Despite that, the company managed to deliver a nearly 5 percent on year growth in net profit to Rs 65 crore, up from Rs 62.10 crore in the year ago period. Revenue was also up 14.8 percent year-on-year to Rs 767.6 crore, as against Rs 668.4 crore in Q3 FY24.

On a segmental basis, RailTel's telecom services revenue stood at Rs 338 crore in Q3, an improvement from the Rs 329 crore that it clocked in the year ago quarter. Meanwhile, revenue from project work services, the company’s other vertical, came in at Rs 430 crore in Q3 FY25, compared to Rs 340 crore in the same period last fiscal.

The company has also won two major orders this month. Firstly, it bagged a Rs 78.43 crore order from Bharat Coking Coal for providing integrated IT based security infrastructure. Secondly, it secured another order worth Rs 46.79 crore from North Western Railway for the construction of its Ajmer division.

In an interview with CNBC-TV18 last year,  the company's CMD Sanjai Kumar had projected a revenue growth target of 30 percent for RailTech in FY25 to Rs 3,400-3,500 crore.

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