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RAILTEL: Education Project Dependence Will Erode Earnings Quality Despite New Contract Wins

Digital Infrastructure And Railway Projects Will Offset Overvaluation Concerns

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RAILTEL
AnalystConsensusTarget
Not Invested
Published 12 May 2025

Update shared on 18 Dec 2025

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-13.7%
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1.7%

Analysts have reaffirmed their fair value estimate for RailTel Corporation of India at ₹265.00 per share, citing unchanged assumptions for the discount rate, revenue growth, profit margins, and future price to earnings expectations.

What's in the News

  • The company has been appointed Project Implementing Agency by the Ministry of External Affairs for an international contract to supply and service 2,000 AI enabled laptops worth about INR 144 million, to be executed by March 4, 2026 (company filing).
  • The company has been awarded a major domestic telecom contract from a Defence sector customer for P2P lease line services, valued at INR 1,360 million and slated for completion by January 29, 2027 (company filing).
  • The company has received a substantial education infrastructure order from Bihar Education Project Council to establish science labs in government schools, with an estimated value of about INR 9,701 million and a completion target of September 24, 2026 (company filing).
  • The company has secured multiple education lab projects from Uttar Pradesh and Gujarat education departments, together exceeding INR 795 million in order value and running through 2027 to 2028 (company filings).
  • The company faced cancellation of a previously awarded PM SHRI education quality enhancement project in Bihar, which had an estimated order size of about INR 2,098 million (company filing).

Valuation Changes

  • Fair Value Estimate unchanged at ₹265.0 per share, reflecting stable long term assumptions.
  • Discount Rate maintained at 12.76 percent, indicating no change in perceived risk profile.
  • Revenue Growth effectively unchanged at about 19.22 percent, with only immaterial rounding adjustments.
  • Net Profit Margin effectively unchanged at about 8.65 percent, with differences limited to decimal precision.
  • Future P/E steady at around 22.12x earnings, signaling no revision in valuation multiple expectations.

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Disclaimer

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