Ladies and gentlemen, good day, and welcome to the post-result earnings call of RailTel Corporation of India Limited, hosted by PL Capital. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vishal Periwal from PL Capital. Thank you, and over to you, sir.
Yeah, thanks, Swapnali, and good morning, everyone, and welcome to the analyst interaction with the management of RailTel Corporation. From the management team of RailTel, we have with us Mr. Sanjai Kumar, who is the Chairman and Managing Director; Mr. V. Rama Manohara Rao, who is the Director of Finance; Mr. Manoj Tandon, who is Director of Projects, Operation, and Maintenance, and along with him is Mr. Yashpal Singh Tomar, who is Director of Network Planning and Marketing. So I think results is already published, and I think we can have a brief from the management on the gone-by quarter or any other commentary, and then we'll have lines open for Q&A. Yeah. Thank you, and over to you, Sanjai, sir.
Yeah. So a very good morning to everybody. It gives me a great pleasure to interact with you on the company's performance in the backdrop of Q3 financial results for FY 2026, which were declared by the company on February 2, 2026. The company achieved operating revenue of INR 913 crore in quarter three of FY 2026, as against INR 768 crores in Q3 of FY 2025, registering the year-on-year growth of 19%. The telecom segment contributed INR 349 crores, and project segment contributed INR 564 crores in company's operating turnover. The profit before tax in Q3 FY 2026 is slightly lower as compared to PBT in Q3 FY 2025 due to execution of slightly more number of low-margin projects in this quarter.
However, company is confident to achieve the overall revenue and profits as per the previous projections. The company achieved the total income of INR 2,648 crore during previous nine months, period ended on thirty-one December 2025, registering 19% year-on-year growth. The profit before tax in nine months period ended on December 2025, is INR 280 crore, as against INR 251 crore in corresponding period of previous year, registering a year-on-year growth of 12%. Earnings per share in nine months period ended on December 2025, stands at INR 6.37, as against INR 5.81 of nine months period ended on December 2024, registering a year-on-year growth of 10%. The company's order book is robust at INR 8,497 crore, which will give us required thrust for future growth. Thank you very much.
Should we start the Q&A session?
Yes, please.
Thank you very much. We will now begin the Q&A session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the questions assemble. We have the first question from the line of Sanjesh Jain from ICICI Securities. Please go ahead.
Good afternoon, sir. Thanks for opportunity. I got a few questions. First, on the bookkeeping side, can you give us a revenue breakup for the three segments within telecom business?
Yes. So we have, right now we have, two segments.
Okay.
Telecom and projects. Hello?
No, no. Within telecom, NLD, ISP, and IP-1.
Acha, acha. Okay, okay, okay, okay. Within telecom. Right. Okay. So, it is INR 155 crore from NLD, INR 113 crore from ISP, and INR 25 crore from IP-1. This is the breakup of core telecom income. Other than telecom income, we have, ICT revenue of INR 54 crore, which includes data center and other income, and other operating income of, INR 3 crore. So total put together is INR 350 crore.
That's very clear. Sir, just one question on the telecom business, particularly, now this year has appears to be slightly weaker than earlier what we thought from the revenue growth perspective, and this quarter again appears to be even lower at 3% kind of a growth in the telecom business. How should we see this growth panning out for next year, and what really is causing this, slowness in the telecom business?
See, yes. So basically, in telecom market, there have been. I would say that there have been constant pressure on pricing. That was one major reason for, I would say, dampened growth team. But then, due to our continuous effort, as I told during previous quarterly meeting discussions, the interaction with investors also, that we have increased our focus on telecom also, and those efforts have now started showing results.
So, I believe that in coming quarters, maybe, maybe may not be Q4, but at least from quarters in the next financial year, we will start seeing results in telecom sector also. But yes, right now, whatever you said is true. In nine months, if you see overall, there have been 5% growth. But we, based on what I said right now, that we have now tried to find out how can we increase our telecom income, and we have accordingly increased our effort, and those efforts will certainly bring dividends, and we should be able to maintain our growth guidance in telecom income in 8%-9% range.
Got it.
Is that okay?
Can you brief us what efforts are we doing in terms of accelerating the telecom revenue?
Yes. So see, one is, we have to listen to the market call that you have to reduce your tariffs. Somewhere, we were earlier not ready to reduce tariffs beyond a certain limit, but then for that, we need to increase the network capacity and all that. And I believe we, as a management, think that this will certainly have impact on our strategy.
Okay.
So we are concentrating on NLD traffic, which is actually have been generally mute. RailWire segment is continuously under pressure. Margins are getting thin, but we are getting now momentum in growth in numbers also, subscriber numbers. If you see, right now, we have increased, we are closing, inching towards 600,000 subscribers. So RailWire also, we believe that we will make some impact, but our focus is mainly on NLD business.
Got it. Got it. And for this, do we need to do more CapEx to increase the capacity on the fiber? Because generally we have been doing CapEx equivalent to the-
CapEx, CapEx was already underway, and, we were only to increase the line cards and all that. So that does not matter much, but we were already underway preparing for this. That's why some time is taken. And you must have seen that we have already done a lot of CapEx during last two years in our telecom network.
Got it.
Yeah.
Within the telecom, we also thought this data center, what we have done deal with the Techno, that should also start contributing. Is there any delay in that contribution as well?
See, the data center, which is major contributor, which is supposed to be major contributor, is likely to be ready by March 2027, because that is under construction. But yes, we have started smaller scale activities in Edge Data Centers at 2-3 locations, like in Gurgaon, in Mumbai, and one is also now ready for starting work in Indore. Those will be small ones, and there we should get business numbers. Apart from that, our agreements with Anant Raj and other like TCS and the like, there also we are finding some traction, and we should get numbers in the next financial year from these activities in data center.
Next on the project business, any new deal wins in the Kavach railway project and in deployment of 4G, 5G?
See, in deployment of Kavach, one tender we have already participated, and, results of that tender is yet to be declared, but otherwise, there is a status quo as far as the PO received is concerned. We already have two older orders, which are in East Central Railway, amounting to total INR 468 crore, and work is going on, at site in these, against this, these two orders. But one tender is still undecided. We are waiting for the results to come.
Deployment of telecom services, towers, and all, anything...
So that is part of the Kavach order.
Okay.
That is part of the total and all that thing, erection of towers is already happening.
Okay, okay.
Yeah.
So, now, coming to the guidance, you said that this year, you still believe that you can do the guided number, which was around 20% growth at the top line and at the bottom line. For the nine months, at least, it doesn't look like we are on track. What gives us the confidence that for the full year, we should be able to do a 20% growth? Should Q4 be much stronger for us?
See, if you see even previous years also, Q4 generally has been heaviest of the all four quarters.
Correct.
Q3 has been slightly muted. Q2 and Q4 are the numbers bringing quarters. Q4 certainly is going to be better. But because if you see the nine months overall numbers, you will find a trend also. Nine months put together. Q4 is certainly going to make its whatever trend has been going from last two, three years, Q3 is going to be heavier.
Got it. Got it. But generally, Q4 is heavy, so it will come on a high base. But to achieve a 20% growth for the full year, we need to do a significantly higher in the Q4.
Yes. Certainly, yes.
Okay. Just one last question to understand the project business margin. It has been quite volatile, right? Ranging from a decently 6-7% margin earlier now to consistently doing 3%-4%. Do you think there is a reset in the margin, and the new margin should be anywhere between 4%-5% in the expectation for us?
I think, if, as far as I remember, I've been maintaining margin in 4%-5%, in the last few quarters.
Interruption.
Yes, I have been.
Okay.
Because, yes-
Got it.
When you increase the volume, certainly all the works you're not going to get in higher margin. We, though. Actually, we have changed, slightly changed our strategy also, because many times you have to add value to the product, project. You should sometimes take a call, sometimes you need to enter a new sector, you have to take a call. Sometimes there's a very fast turnaround in a project so that your cash flows are supported, you have to take a call. So those, all those factors certainly matter.
Got it.
But yes-
No, no, no, no.
There's one. Yeah.
Just trying to understand. But this is a new normal, right, now?
Yes.
Got it, sir. That's, that's very helpful and best wishes for the coming quarters.
Thank you. A reminder to all the participants, you may press star and one to ask a question. A reminder to all the participants, you may press star and one to ask a question. We have the next question from the line of Viraj Mithani from Jupiter Financial. Please go ahead.
Yeah, thank you for the opportunity. My question is, how are we going to be benefiting from this recent budget proposal of, announcement for increase in safety of railways?
Your voice-
There are any-
Your voice, just your voice is not very clear.
Am I clear now? Is it clear now?
Better. Better, better.
Yeah. So my question is: How are we going to benefit from this budget proposal on safety equipment, on this railway safety? So what are the avenues for us in this sector?
The budget is just now presented, so we are also observing what finer details come out, and I think it will be appropriate only after those deliberations happen and we get the finer details to react on to that.
Okay. Sir, what would be your guidance for this coming year? The next year would be fiscal 27.
20-20% growth item.
On the sales side, and the margin side, net margins would be in the range of 7%?
Net margins, sir, yes. You are talking of project margin or you're talking of overall margin?
Overall margin.
The overall margin should be 10%-11%, EBIT, I'm talking about.
Net would be 5% around, right?
No, I didn't say that. Project will be in the range of 4%-5%. Telecom is going to be there in the range of 20%-21%. So overall, will be somewhere around 10%-11%. Is that clear?
Yes, sir. Yes, sir. Thank you very much.
Thank you. A reminder to all the participants, you may press Star and One to ask a question. We have the next question from the line of Vishal Periwal from PL Capital. Please go ahead.
Yes, sir, thanks for the opportunity. Sir, in terms of the telecom services, you mentioned others, data center revenue of INR 56 crore this year. So same period last year, this number could have been how much, sir?
Last year?
Yes, sir.
Last year it was INR 51 crore. Data center, yeah, ICT revenue, others and data center put together. Others was INR 18 crore last year. This year it is INR 15 crore.
Okay, okay. Got it. And similarly, sir, in terms of project services also, can you give a breakup of Indian Railways and others in the revenue?
Railway projects, if we talk of, it is INR 112 crore this quarter, and other than railways, is INR 452 crore.
Okay. Sorry, sir, similarly, from the same period last year, if available, sir.
So last year, for the same period, it was INR 123 crores from railway project, and other than railway projects, it was INR 307 crores.
Okay. Got it. Got it. And the project order book that is there, so in terms of railway and non-railway, can you also provide it?
Just a minute. Projects from railway, it is... I have it. So railway projects, order book, if I talk of, it is around INR 1,000 crore from railway stream, and then other than railway is INR 5,511. Talking of projects, so INR 5,000 crore is non-railway and INR 1,000 crore, close to INR 1,000 crore is railway. I'm talking of project income only, it does not include-
Yeah.
Telecom income.
Okay, okay. So is it fair to say, I think we mentioned, order book of in the range of INR 8,000-odd crore. So,
Yeah, telecom.
10, and the remaining is telecom?
Yeah, so there's telecom income, there is railway signaling projects we have... I would say, I think, so if we count signaling projects also, so it is INR 1,700 crore, put together, and telecom is around INR 400+ crores from railways. And other than railways also, there is telecom. So all put together is INR 8,400+.
Okay, okay, okay. But so generally, when we do a breakup, railway, non-railway, so telecom is a part of railway, we consider that, right?
See, it, these are all basically bifurcations. Whatever way you want, you can. So project income and telecom income, these are the two scenarios. Within the telecom, we generally do not bifurcate into railway telecom and other than telecom. That is not the normal, normally, we are not taking this way. We are only bifurcating project, railway and non-railway.
Got it, sir. Got it, got it. Yeah, I think that, that's pretty much from my side, sir. I'll come back in the queue.
Thank you. A reminder to all the participants, you may press Star and One to ask a question. Participants, if you wish to ask a question, please press Star and One. We have the next follow-up question from the line of Viraj Mithani from Jupiter Financial. Please go ahead.
Yeah. Am I audible, sir?
Yes, please.
Sir, recently you got some school order. What was that? Can you just give some details of it? It was canceled again, but what is the scope in that area would be? In Bihar, we got it, yeah.
Yeah, yeah. So you are talking about canceled order, or you are talking about new order?
New order and cancel both. Bihar, we got some school order, and they were canceled, and then we got-
There are y eah, yeah. So there are some, they are basically education in Bihar. They are working on many fronts, so they are setting up new laboratories in schools. So one project is related to laboratories, setting up of physics, chemistry and biology laboratories. So that is the, that is staying, and we are working. Already work is in progress. The other one is basically around smart class. That was around, about smart class. We really don't know reason behind the cancellation. It's because of their own internal decision. But, so we are, we have not been told also, but they have withdrawn those orders.
Sir, what is the margin in the Smart Class business? What kind of margin would that be? It will be, what kind of margin there is?
4%-5% only.
Same, 45. Okay. And sir, we have some hospital project also, which was done on pilot basis. Is there any scope there? Hospital management.
Which one?
RailTel did some hospital management project some time ago on a pilot basis.
Hospital management for whom?
On a pilot basis, done some for the government hospitals, was done some years ago, so.
No, no, we have, we have rolled out a very huge hospital management information system for Indian Railways. There are more than 700 hospitals and dispensaries, railway dispensaries, where we have already rolled out 4, 5 years back. Recently, we have completed for Brihanmumbai Corporation also, which is also a very sizable, good amount, value of work for, again, for the same HMIS. So we have... I don't remember any POC you are talking of. I just don't really recall.
Maybe it's, it's the same project maybe you're talking about, which you're talking about.
So, okay. But those are full-fledged projects. They are not POC.
Okay, and they are margin effective, right?
Yeah, yeah.
Okay. Thank you, and all the best, sir. Thank you.
Thank you. A final reminder to all the participants, you may press star and one to ask a question. Thank you very much. As there are no further questions from the participants, we would conclude the call now. On behalf of PL Capital, that concludes this conference. Thank you for joining with us today, and you may now disconnect your line.