Hold RailTel Corporation of India: target of Rs 240: ICICI Securities

Moneycontrol • 2 days ago

Original source

Key Investment Pillars

  • RailTel's Q2FY27 EBITDA rose 13.9% YoY, driven by a strong jump in its projects business, with revenue up 28.3% YoY to INR 7.5bn.
  • The company expects its Telecom segment revenue to benefit from new customer additions in its NLD business and expansion into newer businesses, including Data Centre and cybersecurity.
  • RailTel's data centre business is expected to generate revenues of INR 3bn in FY27 and INR 5bn in FY28, supported by its existing facilities and the upcoming Noida facility.
  • The company's Projects segment order book remains robust at INR 122bn, with management expecting execution to accelerate in H2FY27.

Thesis Validation Checklist

  • Investors should watch for steady execution in the projects business, revenue growth from new customer additions in NLD, and expansion into data centre and cybersecurity businesses.
  • The progress of the Kavach project and the proposed railway 4G/5G network rollout will be key signals to validate the thesis.
  • Any changes in the company's guidance for revenue growth and EBIT margins will also be important to monitor.