Fundamental Analysis – Railtel Corporation of India (RAILTEL)

About the Stock:

RailTel, a prominent “Mini Ratna (Category-I)” Central Public Sector Enterprise, excels as a leading ICT provider and a neutral telecom infrastructure entity in India. The company boasts a vast Pan-India optic fiber network, covering key urban centers, rural areas, and significant railway stations.

Founded on September 26, 2000, RailTel’s mission has been to advance the nation’s telecom infrastructure by improving train control, operational efficiency, and safety. Leveraging the railway track right of way, RailTel has developed a broad broadband and multimedia network, with its optical fiber network now extending over 61,000 route kilometers and reaching more than 6,100 railway stations. The network’s extensive citywide reach surpasses 21,000 kilometers, solidifying RailTel’s crucial role in India’s telecom sector.

Business Model:

• Business Focus: ICT solutions and telecom infrastructure.
• Infrastructure Ownership: Extensive pan-India optic fiber network, covering cities, rural areas, and railway tracks.
• Established Expertise: Over 61,000 route kilometers and 6,108 railway stations covered.
• Certifications: Tier-III, ISO 27001:2013, ISO 20000:2018, ISO 9001:2015, ISO 27017:2015, ISO 27018:2019, ISO 27033, CMMI Maturity Level-4.
• Strategic Partnership: Strong collaboration with Indian Railways for mission-critical connectivity.
• Project Spectrum: Includes IP-based video surveillance, ‘e-Office’ services, passenger Wi-Fi, and content on demand.
• Government Projects: Involved in national projects like National Knowledge Network, Bharat Net, and USOF-funded connectivity in North East India.
• Service Offerings: Connectivity for mission-critical operations, passenger services, and government projects.

Company Valuation
Sector	Telecommunication
NSE	RAILTEL
BSE	543265
Market Capitalization	Rs 15,924 Crore (As of Sept 03, 2024)
Book Value Per Share	Rs 56.93
Face Value	Rs 10
P/E ratio	62.55
52 week H/L	617.80 /  202.50
Dividend Yield (%)	0.57

Shareholding Pattern
Particulars	Sept-23	Dec-23	Mar-24	Jun-24
Foreign Promoters %	0	0	0	0
Indian Promoters %	72.84	72.84	72.84	72.84
DIIs %	3.55	3.4	2.64	2.86
FIIs %	1.46	1.45	2.2	2.15
Others %	22.15	22.31	22.32	22.15

Ratios (Standalone)
Particulars	Mar 2020	Mar 2021	Mar 2022	Mar 2023	Mar 2024
ROCE %	13.99	14.4	19.61	16.59	19.66
ROE %	10.46	10.16	14.28	11.89	14.17
ROA %	6.27	5.79	7.82	6.28	6.73
Interest Coverage Ratio	48.42	44.73	43.29	29.16	24.98
D/E	0	0	0	0	0
P/B	–	2.9	1.78	1.98	6.39

Balance Sheet (Standalone Figures in Rs. Crores.)
(Year-end March)	Mar 2020	Mar 2021	Mar 2022	Mar 2023	Mar 2024
Share Capital	321	321	321	321	321
Reserves	1,040	1,082	1,195	1,316	1,506
Borrowings	0	0	0	0	0
Other Liabilities	895	1,189	1,218	1,598	2,177
Total Liabilities	2,256	2,592	2,734	3,235	4,004
Fixed Assets	789	760	775	821	913
Capital WIP	253	215	164	157	130
Investments (Long Term)	10	10	10	10	0
Other Assets	1,204	1,607	1,786	2,246	2,961
Total Assets	2,256	2,592	2,734	3,235	4,004

Profit & Loss (Standalone Figures in Rs. Crores.)
(Year-end March)	Mar 2020	Mar 2021	Mar 2022	Mar 2023	Mar 2024	TTM
Sales	1,081	1,337	1,522	1,947	0	2,658
Other Income	32	31	79	39	62	58
Expenses	747	1,010	1,154	1,568	2,103	2,205
Operating Profit	365	358	446	418	526	513
OPM%	34	27	29	21	–	20
Interest	4	4	7	9	14	6
Depreciation	131	159	160	154	158	160
Profit Before Tax	181	195	280	253	328	343
Tax%	24	28	25	26	25	26
Net Profit	138	140	208	187	246	257
PATM%	13	10	14	10	0	10

Cash Flows (Standalone Figures in Rs. Crores.)
(Year-end March)	Mar 2020	Mar 2021	Mar 2022	Mar 2023	Mar 2024
Cash from Operating Activity	154	376	272	249	556
Cash from Investing Activity	-48	-135	-227	-169	-419
Cash from Financing Activity	-62	-110	-104	-79	-77
Net Cash Flow	43	131	-59	1	60

Q1 FY25 Result Update:

• Net Profit: RailTel Corporation of India Ltd reported a 25.2% YoY increase in net profit, reaching ₹48.7 Crore for Q1 ending June 30, 2024.
• Quarterly Net Profit: ₹38.9 Crore, according to a regulatory filing.
• Revenue from Operations: Rose by 19.4% to ₹558.1 Crore, up from ₹467.6 Crore in the previous fiscal year.
• EBITDA: Increased by 14.8% to ₹103.4 Crore, up from ₹90.1 Crore in the previous year.
• EBITDA Margin: Recorded at 18.5% for the reporting quarter, compared to 19.3% in Q1 FY24.

Quarterly Results (Standalone Figures in Rs. Crores)
Particulars	Mar 2023	Jun 2023	Sep 2023	Dec 2023	Mar 2024	Jun 2024
Sales	700	463	599	668	833	558
Other Income	9	15	14	6	19	19
Expenses	601	391	484	550	716	455
Operating Profit	108	88	129	125	136	123
OPM%	15	19	22	19	16	22
Interest	1	1	1	0	4	1
Depreciation	41	37	38	41	43	38
Profit Before Tax	102	50	90	84	102	67
Tax%	26	25	25	26	24	27
Net Profit	76	37	68	62	78	49
PATM%	11	8	11	9	9	9

Conclusion:

RailTel Corporation of India Ltd has demonstrated strong financial performance in the first quarter of FY25, reflecting a robust growth trajectory. The 25.2% year-on-year increase in net profit to ₹48.7 Crore underscores the company’s successful operational strategies and effective management. The substantial 19.4% rise in revenue from operations to ₹558.1 Crore highlights RailTel’s expanding market presence and operational efficiency.

Despite a slight dip in EBITDA margin to 18.5%, the 14.8% increase in EBITDA to ₹103.4 Crore indicates improved profitability and cost management. Overall, RailTel’s solid financial metrics and consistent revenue growth suggest a favorable outlook, reinforcing its position as a key player in the ICT and telecom infrastructure sector. Investors can view these results as a positive indicator of the company’s ongoing strength and future potential.