1. At a Glance – PSU With Fibre, Orders & Mood Swings
RailTel is what happens when Indian Railways discovers broadband and decides to monetize every inch of railway track like a landlord in South Mumbai. Market cap sitting at ₹10,800+ Cr, stock chilling around ₹337, while the business is pumping out ₹3,917 Cr TTM revenue with 30% sales growth and ₹318 Cr TTM PAT. ROCE at ~22%, ROE ~16.5%, debt basically non-existent (Debt/Equity 0.03), and dividend yield politely waving at 0.85%.
Latest quarter (Q3 FY26) delivered ₹913 Cr revenue (+19% YoY) and ₹62 Cr PAT, but profit growth was a sleepy ~3% YoY. Why? Because project margins are thinner than railway tea and competitive bidding is a blood sport. Order book stands tall at ₹4,680 Cr, plus fresh orders flowing in Jan–Feb 2026 like IRCTC Tatkal tickets—fast, chaotic, and occasionally cancelled.
This is a PSU that owns the pipes of India’s digital backbone, rents them to everyone from banks to Big Tech, and still gets valued like a moody EPC contractor. Curious? You should be.
2. Introduction – Railways Ki Zameen, Internet Ka Raaj
RailTel was born in 2000 with a simple jugaad-level genius idea: Indian Railways already owns land everywhere—why not lay fibre and sell bandwidth? Fast forward two decades, and RailTel now runs an optic fibre network across ~62,000 route km, touching 7,000+ stations, covering ~70% of India’s population.
In August 2024, the Government handed it Navratna status, basically saying: “Beta, tum ab thoda independent ho.” The company executes projects like BharatNet, National Knowledge Network, railway signaling, data centres, cloud, SOC, surveillance—basically every acronym that sounds government-approved.
But here’s the twist: RailTel is no longer just a “telecom utility”. Project services now contribute the majority of revenue, which means growth is faster, but margins are moodier. Some days it looks like a digital infra monopoly,
some days like a PSU version of L&T Lite.
Is RailTel a stable compounder or a tender-driven rollercoaster? Let’s dig.
3. Business Model – WTF Do They Even Do?
Imagine explaining RailTel to a lazy investor:
“They rent internet highways built along railway tracks and also build digital stuff for the government.”
That’s it. But let’s roast politely.
Segment 1: Project Work Services (≈59% of revenue)
This is RailTel’s adrenaline junkie segment. It includes:
- Telecom & IT projects
- Railway signaling & safety systems
- Smart cities, surveillance, cloud, SOC
- International projects (Ethiopia DC, South Africa exploration)
Revenue here exploded 157% between FY22–FY24, but margins fell because tenders are priced like vegetable mandi auctions. About 80% of this segment comes from Railways—so customer concentration is… let’s call it “family business”.
Segment 2: Telecom Services (≈49% FY24)
This is the boring but beautiful part:
- Dark fibre leasing
- NLD bandwidth
- VPN, leased lines
- Data centres & RailWire broadband
Margins are sweet (20–22% EBIT), churn is low, and customers include banks, PSUs, hyperscalers. Telecom revenue only grew ~21% over FY22–FY24, but it’s stable, annuity-like, and sanity-preserving.
Question: Would you prefer high-margin boring cash flows or sexy project growth with margin anxiety?
4. Financials Overview – Numbers That Actually Matter
Quarterly Comparison (Standalone, ₹ Cr)
| Metric | Latest Qtr (Q3 FY26) | YoY Qtr (Q3 FY25) | Prev Qtr (Q2 FY26) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 913 | 768 | 951 | 19.0% | -4.0% |
| EBITDA | 133 | 121 | 154 | 9.9% | -13.6% |
| PAT | 62 | 65 | 76 | -4.6% | -18.4% |
| EPS (₹) | 1.94 | 2.03 | 2.37 | -4.4% | -18.1% |
