RailTel shares continue to surge for 2nd day, gain 13% to reach near all-time high; here’s why

Shares of RailTel Corporation of India extended their winning streak into a second consecutive trading session on Friday, climbing 12.50% to reach ₹488 apiece, nearing their previous all-time high of ₹494.41 achieved in February.

In the preceding session, the stock posted a nearly 2% increase following the company's acquisition of a ₹20 crore order from South Central Railway. This contract pertains to telecommunication works for the provision of IP-MPLS across 523 RKM of the Secunderabad division of South-Central Railway.

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The company has secured several significant orders this month so far, including a ₹24 crore contract from Tamil Nadu Fibrenet Corporation for the selection of a system integrator to supply, install, integrate, test, and commission headend systems, along with operation and maintenance.

Additionally, the company received an order from the Ministry of Defence for the creation of RailTel Points of Presence (PoP) at customer sites amounting to ₹11 crore. 

It has also secured a major contract worth ₹81.46 crore from the National Informatics Centre Services for the supply, installation, configuration, commissioning, integration, operation, and maintenance of information and communication technology (ICT) infrastructure.

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Investors have responded positively to RailTel's steady stream of orders this month, driving a 15% increase in the company's share value in June. Looking at the YTD performance, the shares have grown by 40%, building on a multibagger return of 167% in CY23. 

RailTel, categorised as a "Mini Ratna (Category-I)" Central Public Sector Enterprise, operates as a prominent provider of information and communication technology (ICT) services. It stands as one of India's largest neutral telecom infrastructure providers, boasting an extensive optic fiber network that covers both urban hubs and rural areas. 

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Established on September 26, 2000, RailTel's main goal was to modernise the existing telecom infrastructure, particularly focusing on enhancing train control, operation, and safety systems. 

Concurrently, it aimed to generate additional revenue streams by developing a nationwide broadband and multimedia network. This endeavour involved strategically laying optical fiber cables along railway tracks, utilising existing right of way. 

For the March-ending quarter (Q4FY24), the company reported a net profit of ₹78 crore, a 4% jump as compared to a net profit of ₹74 crore. The revenue from operations during the same period improved by 19.51% YoY to 833 crore. 

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For the full fiscal year (FY24), the net profit jumped 31.55% YoY to ₹246 crore, while the revenue from operations surged to 2,568 crore, a 32% YoY improvement.

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