RailTel Corporation of India Limited (RAILTEL) Earnings Call Transcript
October 30, 2025
Earnings Call Speaker Segments
Ladies and gentlemen, good day, and welcome to the Post Results Q2 FY '26 Earnings Conference Call of RailTel Corporation of India Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vishal Periwal from Antique Stockbroking. Thank you, and over to you, sir.
Yes. Thanks, and a warm welcome to all the investors and analysts for the interaction with the management of RailTel Corporation of India Limited. And the team in RailTel in today's call is led by Mr. Sanjai Kumar ji, who is the Chairman and Managing Director; Mr. V. Rama Manohara Rao ji, who is Director of Finance; Mr. Manoj Tandon ji, Director, Projects, Operational Maintenance; and along with Manoj ji is Mr. H.C. Batra ji, who is Special ED Finance. So as usual, we'll have brief from the management on the gone by quarter, and then we'll have lines for a Q&A. Thank you, and over to you, Sanjai, sir.
Thank you, Vishal ji, and a very good afternoon to all of you. It gives me great pleasure to interact with you on the company's performance in the backdrop of Q2 financial results of FY '26, which were declared by the company on 29th October 2025. The company achieved operating revenue of INR 951 crores in Q2 of FY '26 as against INR 744 crores in Q1 of FY '26, registering the Q-on-Q growth of 28%. The Telecom segment contributed INR 367 crores and Project segment contributed INR 584 crores in company's operating income. As regards the total revenue, the Q-on-Q growth is 27% with INR 966 crores in Q2 FY '26 as compared to INR 758 crores in Q1 of FY '26. The profit before tax in Q2 of FY '26 is INR 105 crores against INR 89 crores in Q1 of FY '26, registering a Q-on-Q growth of 18%. The profit after tax in Q2 of FY '26 is INR 76 crores as against INR 66 crores in Q1 of FY '26, registering a Q-on-Q growth of 15%. The company achieved total income of INR 1,724 crores in H1 of FY '25-'26 as compared to INR 1,440 crores during the corresponding period of last year, registering growth of 20%. PAT for the first half of '25-'26 was INR 142 crores as against INR 121 crores during the corresponding period of the last financial year with a growth of 17%. I'm happy to state that the Board of Directors of the company declared an interim dividend of INR 1 per share for FY '25-'26. Earnings per share in first half of FY '26 stands at INR 4.43 as against INR 3.78 of first half of FY '25, registering a year-on-year growth of 17%. Earnings per share in Q2 of FY '26 was INR 2.37 as against INR 2.06 of Q1 of FY '26, registering a Q-on-Q growth of 15%. The total order book of the company as on date is INR 8,251 crores. During financial year -- current financial year, the company received total orders of INR 3,317 crores, up to 30/09/2025, which is higher than total orders received during entire '24-'25. And almost 3x the orders received during H1 of '24-'25. Hence, the momentum created during Q4 of last year is continuing in the current year. The company is celebrating Silver Jubilee of its foundation in the current year, and this is true tribute to our celebration. I thank you very much for your trust and vision for the future of this company. Jai Hind.
[Operator Instructions] The first question is from the line of Kumar Divyanshu who is an individual investor.
Congratulations for the very good set of numbers, sir. Basically, I have 1 or 2 questions. First question regarding the order book status. Could you please comment on that till Q2 FY '26? And the second question, like order inflow, whether you are having the order inflow in coming quarters or not? And the third is that please comment on the data center expansion or CapEx planning if you are having?
Your second question, can you please repeat once again?
Yes. My second question was regarding the KAVACH and in the segment of data center. Could you please comment on that like if there is any progress or the company is planning to enter into the particular segment business? Likewise, anything is there? Or is there any plan from the management onward?
So yes, total order book, I already told till end of second quarter. Exactly, I don't remember till the end of second quarter, but today, it is INR 8,251 crores. Today, it is INR 8,251 crores. And as you said, KAVACH so KAVACH, we are already doing work, 2 orders we have already won and they are under execution. And there are tenders where we are continuously applying whichever tenders are coming, we are, of course, participating in those tenders. On data center front, so data center -- one edge data center is already up in Gurgaon and the other one is under progress in Mumbai and maybe 1 or 2 we may be doing by the end of this year. On other data center progress is that we are -- we have already started working on developing 10-megawatt data center. So initially, it will be 5 megawatt, and then we will upgrade it to 10 megawatts, which is -- work has already started. Civil work has already started in Noida. I hope I have answered your questions.
[Operator Instructions] The next question comes from the line of Mohit Mishra from ICICI Securities.
A couple of small questions. So out of the order book of INR 8,251 crores, what percentage is for railways?
So if you ask railways, so railways share would be around -- it is about INR 800 crores is railways. So you can say around 10%.
Around 10%. Okay, sir. And sir, could you give me the breakup of telecom services revenue under M&D.
Sorry, I'll just correct Sorry, just correct. Railway total will be around 22%, 22% -- and another telecom, if you put together telecom also, it will be around 25%.
Okay, sir. Okay. And sir, could you give me the breakup of telecom services revenue NLD, ISP and IP for the quarter?
Yes. So NLD is around INR 153 crores. ISP is INR 111 crores and IP one is INR 29 crores. Total put together is INR 294 crores. This is core telecom revenue.
Okay, sir. Okay. Also, sir, the guidance that you gave in the last quarter call of 25% revenue growth and 11% to 12% margin, would you stick with it? Or is there any revision to the guidance?
There's no revision. We stick to that.
Thank you so much for answering the questions. And all the best for the coming quarters. Thank you.
Thank you.
The next question comes from the line of Viraj Mithani from Jupiter Financial.
Congratulations for the outstanding numbers.
Thank you.
My question is can you give me the composition of the order book which you have INR 250 crores you said...
I'm sorry to interrupt you, Mr. Viraj, your voice sounds very -- can you please speak into your handset?
Is this better?
No, it's still a little distant.
I think it is better for me. You can...
Okay, sir.
Yes. Sir, can you give me the composition of the order book, which you said of INR 8,250 crores would be...
Yes. So roughly, I would say, around INR 3,700 crores is from various states around it's crores, 25% rather. So it's around INR 2000 crores, INR 2,000 crores is from railways. Then various PSUs is around close to slightly more than INR 900 crores. Various other government departments is around INR 750-plus crores. Financial sector is around INR 350 crores. Other railway PSUs also there. So all put together around another INR 350 crores is how it is distributed.
Okay. And sir, how is the revenue distributed from this order book? Like how is the execution done? Are there long orders or short cycle orders?
They are mixed orders. They are all mixed orders. So a few of them, certainly they are CapEx based. So they will be like taking 1 or 2 years. A few of them, maybe another AMC is there, so they will be going 4, 5 years. So that is how they are. But exact time lines and all that, this is a slightly complex thing. So roughly, you can say that we should expect around INR 2,000 crores out of this order book getting converted into revenue.
Then every year, the INR 2,000 crores will be convert into revenue or something like that?
No, I'm talking for first year. It will be graded over next year. And then certainly, first 2 years are more prominent for the current order book. As and when a new order comes. So generally, it is 12 to 18 months, 2 years time line when they are getting executed.
So the major order gets executed in first 2 years and then it goes slowly and then gets reduced, that's how you...
Certainly, yes. So it is happening like that for previous years also. So new orders are getting added and the old orders are getting converted into revenue, yes. So this is a general trend anywhere else, I think.
Yes. And sir, net margins will be 12%, that's what you said last time, you maintaining this or improvement further because of the orders more and more orders are getting?
See, as I told when I answered last investor question that we will maintain around 11% to 12% only.
Okay. And any play we have in this IMEC corridor, which government is planning?
Which one?
IMEC corridor, which is government is planning the big corridor, right?
I didn't get you. IIMC is what?
IIMC corridor, it's connecting from here to the Gulf states.
No, no we are not -- not with us.
Thank you sir. All the best. Jai Hind sir.
Thank you.
[Operator Instructions] The next question comes from the line of Axay Shah from Toro Wealth Managers.
Congratulations for good set of numbers. Sir, I'm new to the business. So I just want to understand that the 11% to 12% margin that we are talking about is PAT margin. And another thing that given our strong order book, are we ramping up our execution? And can we see the more growth ahead?
So number one, it is not PAT margin. It is EBIT margin. It is not PAT. It is EBIT, right? So your next question is regarding.
Sir, given our strong order book, are we ramping up our execution? And can we see more growth going forward?
See, we are certainly venturing into new sectors, participating into more tenders. We are even now going abroad for new business opportunities, international business. Also, we are trying very hard. So certainly, we are gaining momentum, and we are sure that we will succeed.
And sir, what is the reason for this -- you are maintaining the decrease in the EBITDA margin. So are these cost pressure or we are going in different businesses, so there is the margin is different. Can you help me understand that?
See, we have a mix of two business sectors. One is Telecom sector, the other is project business. So Project business, I've been consistently maintaining that we will be somewhere around 4% to 5%. And depending upon the revenue mix, the overall margin will fall in and around 11%. So Telecom business gives certainly much healthier margins, whereas Project is always competitive, you have to execute work and all that. So their margins are -- even 4% to 5% is considered a good margin in project business. We are trying to remain in that window.
All the best for the future sir.
Thank you.
[Operator Instructions] The next question comes from the line of Mohit Mishra from ICICI Securities.
Sir, I missed one question. Could you help me with the CapEx number for the quarter and the estimated CapEx for second half of the year?
So I think if you are talking about CapEx, around INR 250 crores we'll be completing...
INR 62 crores in quarter 2. We have already booked.
Yes, INR 62 crores we have already booked. Quarter 2. So we will be maintaining INR 250 crores around number.
INR 215 crores for the second half, right?
INR 250 crores, INR 250 crores. -- for the entire financial year, for the whole financial year.
Okay, sir. And INR 62 crores in Q2?
Yes.
The next question comes from the line of Maitri Shah from Sapphire Capital.
Yes. So first half, we surpassed our entire FY '25 order inflow, which is a great feat. So how do you see the second half panning out? Do we expect a similar order inflow happening close to around INR 3,000 crores in the second half of FY '26 as well?
See expectations should always be on optimistic side. So we always expect we get good orders, higher number of orders. But there are so many factors. We are participating in tenders. We are winning. So sometimes it happens that we are -- we get some very good large value order also. So this year, in this quarter, we have got two such orders. That is the reason, and we are continuously increasing our intensity of participating in bids. So certainly, we expect that this momentum should continue.
Okay. A follow-up on that. So the 2 large orders that we got. Could you quantify...
Sorry to interrupt you, Ms. Maitri, can you please speak a little away from the mic. Your voice is getting muffled.
Yes, sure. Is this better?
Yes, thank you.
Yes. The 2 large orders that we kind of won in the second quarter, what sort of -- like what was the amount for those, if I could get that? Per order?
I think yes. So one we got from Bihar state government for setting up the labs for schools, which is INR 822 crores, so that is one big order which we got this year, I think biggest ever. Another one, I think that was the KAVACH order, which we got last quarter for -- from East Central Railway. And others are similar. So this is really big INR 822 crores, and it's -- we want to create it as a model project delivery, which is -- which becomes a model for any government project we are doing.
That is great. Also on the global pipeline, as you said that you're looking for opportunities abroad. So any tenders in pipeline do we have? And could you quantify...
There are a few opportunities. But since those opportunities are not finalized, so we can't divulge. Yes, we are working on a couple of good opportunities, though not a much bigger size, but to begin with, they are good numbers. We will certainly...
Which countries are we?
So these are African countries and Caribbean countries.
Africa and Middle East, okay. And do we have...
Not Middle East. Caribbean, Caribbean, not Middle East. It is not Middle East.
Okay. African Caribbean. And the pipeline, do we -- can we like give a number on what is the pipeline and what sort of win ratio do we have?
You're talking of overall numbers?
Yes, like the order book and what sort of win ratio?
Roughly, our winning factor is around 20%.
And the bidding pipeline?
Bidding pipeline, exactly, I may have to -- it keeps going. So every day, people are calling. This is not -- is a number every day, people are bidding or finding new tenders. So I exactly don't have that number anyway.
Any ballpark figure you could give on it?
So you can just estimate that INR 3,000 crores we won in last 2 quarters. So certainly, we must have bidded for around 5x INR 15,000 crores roughly in 2 quarters. Because many tenders would have been bidded even last year also, sometimes. So it is just a number which I got and give it to you by just averaging.
Got it. And also with such a big pipeline of orders that we already have won, do we expect FY '27 to be much -- on a much higher growth trajectory? Like are we targeting a 30%, 35% growth for FY '27?
It's too premature to say anything about '27. But yes, certainly, conservatively, we will pursue no less than 20%, 25% of growth. see global scenario, global supply chains, those all uncertain factors might affect things any time. But I'm sure that with this kind of winning spree, which we are going, we will be -- we should be able to maintain at least 20%, 25% of growth.
That is it from my side. Thank you and all the best.
Thank you.
The next question comes from the line of Nayan Thakker from Investec.
I had two questions. Sir, I have noted that telecom EBIT on a segmental basis has seen an improvement in margins in the current quarter. If you could help us with what exactly can be the sustainable level of margins in the Telecom Services segment? That is the first question. And the second question, sir, I have is if you could just guide us to the broad revenue mix between the 2 segments for the year between Telecom Services and Project Services.
Okay. So first, I will answer your second question. 39% and 61%, that is the ratio between Telecom and project Business, right? Second question about this -- you are asking margins in Telecom in this quarter. So the number being very small, so certainly, our margin is going to remain in 30%, 35% only. This is one-off even because number are small and quarter is also a small period, but the margin is going to remain in 30%, 35% overall over a long period.
Sir, just a follow-up. On the Telecom services, I guess, in quarter 1, the EBIT was 20.5% and in quarter 2, it was 27.9%. So sorry, 30%, 35%. Are you saying we should expect an increase going forward?
I'm talking of EBITDA. If you're talking of EBIT, you are right. I'm talking of EBITDA. So the numbers are different we are talking about.
Understood, sir. Understood. Got it. And just a follow-up on the revenue share number you mentioned. So can -- will we see a further reduction in the telecom revenue share going forward in '27 and '28? Or can we maintain a broad 40-60, if you could just provide some guidance.
Broadly for some time to come, 40-60 more or less. We have started, as I've been saying that we are trying to get more telecom business, though competition is very tough and price pressures are very high. But we have started getting some successes. So despite Project business going at much higher pace with some more revenue growth coming in from telecom sector, we should maintain 40-60, in and around 40-60.
Understood, sir. And sorry, sir, if I can just squeeze in one question. If we talk of the segmental results of the telecom services on an EBIT level, if you could just provide some color on that margin, please, on a sustainable basis, while you did mention on an EBITDA level, but if you could just help me with the same on the EBIT level?
Same 21%, 22%.
Understood. Thank you very much and all the best for the next -- the remaining quarters.
Thank you.
The next question comes from the line of Viraj Mithani from Jupiter Financial.
This composition of the order book, the 40% is Telecom and the rest is Project. Is that the correct way to think?
You are talking about order book, I'm talking about revenue. I think your question is about order book.
Yes. What proportion of the project and the telecom and the order book?
Order book, I think this question, I might not be having answer immediately because the whole Project business, yes, they have both mix. So I might have to really segregate the... But certainly, project business order book is higher. Telecom new order book would be around 13% to 14% new order book.
Okay. And sir, my next question is, can you give color on this data center business, like what sort of revenue we will get from this data center?
I would like to clarify. Generally, Telecom order book is generally yearly, whereas Project is spread over many years, 3, 4, 5 years. So actually, it's very difficult to make it out like what is the actual impact on yearly revenue. Sorry, just wanted to make it more clear to the investors. Now please tell your next question.
Color on the data center business, like how is the revenue plan, what will be the margins for data? And what is the future potential for data center business? Can you give some color on that?
Data center business is doing very good. In fact, -- we had recently a few months back, we had signed an MOU with TCS, and we are using their sovereign data center platform also for providing services to government. And soon, we will be using their platform also. We are coming up with our own data center in Noida, which is investors basically PPP model. Work has already started. It will take around maybe another 1.5 we have -- we really have a very good growth opportunity, and we are eagerly waiting to basically make a strong foothold in this sector because there's a lot of growth opportunity, data center you've been reading in newspapers also.
Right, sir. And what percentage of the revenue from right now, sir, in data center business would be?
Right now, it would be INR 150 crores numbers kind of numbers in annual. Last year, it was INR 127 crores. Out of INR 3,500 crores -- so it is not a very big number, but yes, it will grow.
Okay. And what percent it will be 30%, 40% growth year-to-year like that or maybe more?
You can -- yes, we must expect 30% to 40%.
The next question comes from the line of Shubham Shelar from Antique Stockbroking.
So only one question, sir, regarding exceptional item during the quarter of around INR 16 crores, does it come under ECL provision?
Yes. This is ECL only. Your voice is not clear. Anyway, you wanted to say something else?
No, sir. That's it.
Next up, we have Mr. Vishal Periwal from Antique Stockbroking.
Can you hear me now? Is it better?
Your voice still sounds a little muffled.
Sir, one is in terms of our order book Yes, sorry. One is in terms of order book, is it fair to say largely -- I mean, like it's state government, central government and departments, we don't have any major private sector contribution as of now?
You are right, not major private sector.
Got it. And in terms of data centers, whatever we have currently, what could be utilization rate right now?
If you ask our data centers, which is very small capacity, so we are nearly 60% to 70% already utilized. That is why we are tying up with other and developing new data centers.
Okay. Okay. Got it. Got it. And sir, you have also given the breakup of this Telecom revenue breakup in the quarterly. But in terms of -- I mean, total to almost like INR 293 crores, INR 294 crores, but what we have reported in segmental is a higher number. So what could be the difference here?
Actually, it includes ICT revenue also, which includes other than non-telecom, basically not pure telecom. So there are 2 -- there are license income, an ISP and IP one. And there are -- in our Telecom income segment, there is data center segment is also included. That is why you will see that.
Got it. Got it. But earlier, we were booking everything in Telecom. Is it fair to say?
No. Even now data center is not a separate segment.
Okay. Okay. So it's part of IP?
No, no. IP one is separate, and now we call it ICT revenue.
Got it. And similarly, sir, can you give a revenue breakup of Project side also, the Project services?
Project, if you talk to railway and non-railway. So then INR 134 crores from railways and INR 249 crores from other than railway.
Got it. Got it. And maybe one last thing. It could be a repetition only. I think though you have answered. But in terms of -- if one has to understand, we are getting pretty good order inflow. If one has to take an understanding like any particular sector, anything that is driving it, can we like put it in some sort of bucket that will help us like to gauge and that will be helpful.
Yes. Actually, so we are working in digitalization initiatives. Most of our SI projects, system integration projects belong to digitalization initiatives of various departments, irrespective of any particular sector, be it health, be it education, be it mining, be it any other. So generally, it is not concentrated in one. But yes, recent orders, which you see in these 2 quarters, it is education sector.
Right, right. And then maybe one last thing. Although you have mentioned, I mean, private sector order book contribution is negligible as of now. But it is fair to say whatever orders that we have, they are all on competitive bidding, where private, public, all players, including us, we compete. That's fair. There's no nomination contract.
So competitive, if you say, so roughly around 70%, 75% of our orders are competitive. Few are from nomination.
Got it, sir. Got it. And nomination will be largely focused on the railway side?
No, there are other than railways also. It is not necessarily railway only.
As there are no further questions, with this, we would now conclude the call. On behalf of Antique Stockbroking, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.
Thank you.
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