RailTel - Research Report

 

RailTel is an A /T+1 group Other Telecom Services company with having Face value of Rs. 10. RailTel, a "Mini Ratna (Category-I)" Central Public Sector Enterprise is an ICT provider and one of the largest neutral telecom infrastructure providers in the country owning a Pan-India optic fiber network. RailTel was incorporated on September 26, 2000 with the aim of modernizing the existing telecom system for train control, operation, and safety and to generate additional revenues by creating nationwide broadband and multimedia network, laying optical fiber cable using the right of way along railway tracks. Presently, the optic fiber network of RailTel covers over 61000+ route kilometers and covers 6108+ railway stations across India. Our citywide access across the country is 21000+ kms. RailTel has a strategic relationship with the Indian Railways and it undertakes a wide variety of projects including provision of mission critical connectivity services like IP based video surveillance system at stations, ‘e-Office’ services and implementing short haul connectivity between stations and long-haul connectivity to support various organizations within the Indian Railways. RailTel also provide various passenger services including content on demand services and Wi-Fi across major railway stations in India.

 

Fundamentals (FY22-23):

 

CMP	Rs. 105
52 - week high	Rs. 148.70
52 – week low	Rs. 84.00
Dividend % (consolidated)	24.00 %
ROCE	17.59 %
BVPS	49.08
Revenue	1548.45 cr.
Debt to Equity	0.00
P/E ratio	21.83
EPS	5.17
P/B ratio	2.30
Market Cap	3,622 cr.
Face value	Rs. 10.0

 

Financial Results:

Company’s Net Sales was at Rs 454.32 crore in December 2022 up by 8.77%, Quarterly Net Profit at Rs. 31.95 crore in December 2022 down by 51.6% and EBITDA stands at Rs. 82.22 crore in December 2022 down by 35.41% compared to December 2021.

List of recent updates regarding the company:

1. RailTel bags order for revamping existing it infrastructure of Bangalore Metro Rail Corporation Ltd with total value of the contract is ₹58.17 Crore-friendly public transport solutions.
2. RailTel bags ₹ 253.35 Crores (excluding taxes) project from State Bank of India for providing 4G LTE connectivity for 15000 offsite ATMs of State Bank of India. It is a key milestone for RailTel to provide high speed and reliable last mile connectivity.
3. RailTel has launch Internet Protocol Television (IPTV) services as a value-added service for subscribers of its retail broadband service called “RailWire” in Eastern & North Eastern region. It has partnered with a Hyderabad-based company City Online Media Private Ltd. a premier IPTV service provider across India which will provide this service under ULKA TV brand.
4. RailTel bags Rs 170.11cr contract from Puducherry Government for Puducherry Smart City. The project entails implementation of Integrated Command Control Centre (ICCC) and other associated activities for Puducherry Smart City Area.
5. RailTel bags an order from South Eastern Coalfields Limited (SECL), a Coal India Subsidiary, for the work of MPLS-VPN (Multi-Protocol Label Switching-Virtual Private Network) Connectivity. The work order is valued at Rs 186.19 Crore.
6. RailTel initiated a Wi-Fi monetization project covering more than 6108+ Railway Station across India where Public Wi-Fi network has already been made available by RailTel. For this project, RailTel has signed a 5-year agreement with a consortium led by M/S 3i InfoTech Ltd., a Global Information Technology Company based at Mumbai. It will help generate revenue by monetizing Wi-Fi footfalls through targeted Advertisements and extending multimedia infotainment services for Railway passengers.
7. India's first Neutral Shared RAN solution makes its successful debut.  RailTel and CloudExtel partner to launch India’s first neutral Shared RAN solution for congested locations with the objective of enhancing telecom users’ experience.
8. RailTel enters into the agreement with the Wadhwa Group, one of India’s leading real estate development companies and a prominent realty player in Mumbai for developing Broadband Internet infrastructure for internet & DTH/Cable TV at their Wadhwa Wise City Panvel, Navi Mumbai. 
9. RailTel recently executed two projects of DRDO pertaining to Data Centre management and cloud services. Securing these prestigious projects from DRDO is an endorsement of RailTel’s key position in the domestic IT space based on its strong technology expertise, process excellence and superior execution capabilities.
10. RailTel and Esri India sign MoU to provide Cloud-based ‘Geospatial Infrastructure’. Indo ArcGIS on RailTel Cloud to enable government program rollouts with robust & scalable GIS products.

In last 1 year the stock gave a return of 23.87% as compared to Sensex which gave a return of 9.84% and 23.94% return compared to 10.84% rise in Nifty.

IPTV services launched by company under the RailWire will convert television households to internet households and open possibilities of smart services for homes which will provide latest 4K technology with HEVC (High Efficiency Video Coding) to deliver the best quality video in the industry. The Public- Private Partnership made by RailTel with 3i Infotech on Wi-Fi network monetization will truly transform the railway passengers’ digital journey, providing customers a differentiated experience and help the company in earning robust income in future. RailTel with its two Tier III data centers and over 61000 Kms of Optic Fiber Network is uniquely positioned to support government organizations in deploying their GIS applications on a secure public Cloud. Company is doing great with its healthy financial and long-term income generating projects so investors looking for safe investments and healthy returns can add this company’s stock into their portfolios for long term period.

 - HET ZAVERI

- info@smartinvestment.in

 

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