RailTel stock gains on securing work order of Rs 52.66 crore

So far this year, RailTel stock has rallied 37 percent, beating benchmark Nifty's returns of around 13 percent during this period.

RailTel shares rose over 3 percent in August after the company secured a work order worth Rs 52.66 crore from the Uttar Pradesh Police Recruitment and Promotion Board.

The project involves providing live CCTV surveillance, Aadhaar-based biometric impersonation control, and digital fingerprint and facial recognition services during written exams and DV&PST, said RailTel in a regulatory filing.

In the quarter ended June 2024, RailTel reported a 25.2 percent on-year increase in net profit to Rs 48.7 crore, while revenue from operations increased 19.4 percent YoY to Rs 558.1 crore.

The railway PSU expects telecom revenue to grow 9–10 percent while projects’ revenue is anticipated at Rs 2,000 crore driving total revenue growth of 25-30 percent in FY25.

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Considering the project business’ EBIT margins are only 5–6 percent, achieving guided stable margin for FY25 can be challenging arithmetically, according to ICICI Securities. RailTel hopes for an acceleration in its order book driven by the large capex planned by Indian Railway.

The brokerage raised EPS estimates by 3 percent for FY25–26E on lower depreciation cost, but maintained a 'sell' rating on the stock with a revised target price of Rs 315.

At 9:19 am, RailTel shares were trading more than 3 percent higher at Rs 485.85 on the National Stock Exchange (NSE). So far this year, the stock has rallied 37 percent, beating benchmark Nifty's returns of around 13 percent during this period.

In the 12 months gone by, the counter has rallied 189 percent, nearly tripling investors' money. In comparison, Nifty rose around 27 percent during this period.

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