RailTel Secures ₹10.64 Crore Work Order from GAIL

RailTel Corporation of India, a “Mini Ratna (Category-I)” central public sector enterprise, has secured a ₹10.64 crore contract from GAIL (India) Limited. The project involves the provision of MPLS (Multi-Protocol Label Switching) and point-to-point leased line connectivity across GAIL’s various locations. The project is slated for completion by February 11, 2025. RailTel’s shares are trading at ₹417.85, down by ₹3.05 or 0.72% from its previous close, whereas, GAIL’s shares are trading at ₹208.99, gaining ₹2.26 or 1.09% from its previous close.

About RailTel & GAIL

Established in 2000, RailTel Corporation is one of India’s biggest neutral telecom infrastructure providers. It operates a Pan-India optic fibre network spanning 61,000+ km and covering multiple stations, reaching 70% of the country’s population. Its services include broadband, VPN, and data centres. RailTel, recently granted “Navratna” status, has financial flexibility, autonomy, and investment capacity. As of now, the company has a market capitalisation of over ₹13,000 crore.

GAIL (India), the state-owned natural gas processing and distribution company, has a diversified portfolio in natural gas sourcing, petrochemicals, and LPG transmission. The Government of India holds a 51.92% stake in the company as of September 30, 2024.

Financial Performance

RailTel reported growth in both quarterly and annual financial results.

• Q2FY25 Results: Net sales surged 41% to ₹843.49 crore, while net profit rose 7% to ₹72.64 crore compared to Q2FY24.
• FY24 Results: Annual net sales increased 31.2% to ₹2,567.82 crore, and net profit grew 30.8% to ₹246.21 crore compared to FY23.

The company’s order book stood at ₹5,254 crore as of September 30, 2024, with contributions from government nominations (22.4%), tenders (75.7%), and private sector projects (1.9%).

Stock Performance

RailTel’s stock has performed well, up over 50% from its 52-week low of ₹273.60 per share. It has delivered a 220% return over the last two years.

In conclusion, the work order from GAIL is another step in RailTel’s journey to strengthen its position in India’s telecom infrastructure sector. With financial growth, a good order book, and continued demand for connectivity solutions, RailTel seems ready for development in the coming years.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.