RailTel Corporation of India Limited

Communication Services — Telecom Services · NSE

₹254.55+₹1.05 (+0.41%)

DalalBaazaar Score

65 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by high debt relative to equity, negative free cash flow, small-cap size, which brings sharper price swings.

In simple words: Strong business and financial position, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:28 pm

Understanding the Business

Company site ↗

The 60-second version of RailTel Corporation of India Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

RailTel Corporation of India Limited provides broadband telecom and multimedia network services in India, Jamaica, and Trinidad and Tobago. It operates through Telecom Services and Project Work Services segments.

IndustryTelecom Services

SectorCommunication Services

Employees595

Annual revenue₹4,269 Cr

How does it make money?

Turns over ₹4,269 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹16 left at the operating level before interest, tax and depreciation. Each of its 595 employees supports ₹7.17 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹7.17 Cr

Who are its competitors?

The closest listed comparisons in its industry are BHARTI AIRTEL LIMITED, VODAFONE IDEA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 18.7% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE20.2%

What is the outlook?

2 analysts covering the stock expect revenue to grow about 17.0% and earnings to grow about 15.1% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+17.0%

Est. earnings growth+15.1%

Analysts2

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +119% while net margin moved -16% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+119%

Margin effect-16%

DalalBaazaar Score

65/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Debt/Equity of 2.82x is high — earnings must service borrowings before shareholders see anything
• Current ratio of 1.32 covers short-term liabilities, without much slack
✗ Free cash flow is negative — growth is being funded by borrowing or fresh equity
✓ Operating profit covers interest 51.6x over
✗ Debt has grown 15.1% a year — worth checking what it bought

Quality vs. Valuation

Company Quality

65/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

67/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

23.6x

3Y Median

39.8x

40 monthly readings · mean 46.5x · range 23.6x–85.2x

Sector Median

21.7x

median of 2 sector peers

🟢Current valuation is approximately 41% below its 3y median of 39.8x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟡Against its sector it is priced broadly in line with the peer median of 21.7x.

vs. its own history

Cheap

39.8x median over 40 months · -41%

vs. sector peers

Fair

21.7x median of 2 peers · +9%

vs. generic bands

Fair

15x–35x

EV/EBITDA

11.4x

PEG

1.05

What's Good / What's Bad

🟢 What's Going Well3

Return on equity is rising
ROE has improved from 11.4% to 15.3%.
Return on capital is rising
ROCE has improved from 14.5% to 18.7%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

3 items require attention · 3 high

🔴Debt has risen sharplyFinancial
Total debt is up 52% over 3 years, from ₹42 Cr to ₹64 Cr.
🔴High leverageFinancial
Debt/Equity of 2.82x — earnings must service borrowings before shareholders see anything.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 5.7 points, from 21.8% to 16.2%.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 18.7% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Priced below its own history
The stock trades 41% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 21.8% to 16.2%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 2.82x. Interest is payable whether or not the business has a good year.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 22% a year✓ 29.8% CAGR
Latest reported year was 27.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 14%✓ 16.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹44 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 16%✓ 18.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 4 neutral · 2 weak

Market Cap

₹8,169 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

23.6x

Fair

Fairly valued against the generic band

P/B Ratio

3.61x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹10.78

Profitable

Profitable on a per-share basis

ROE

16.3%

Strong

Strong capital efficiency

ROCE

18.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

2.82x

High

High leverage

Revenue Growth (YoY)

27.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

25.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.28%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹86 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

17.1x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

ROA

5.1%

Average

Average asset productivity

Operating Margin

11.0%

Average

Average margins

Net Margin

8.1%

Average

Average bottom-line conversion

Current Ratio

1.32

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.73

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

257.1 / 268.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

45.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,951 Cr	₹2,564 Cr	₹3,466 Cr	₹4,269 Cr	+29.8%
EBITDA	₹426 Cr	₹495 Cr	₹602 Cr	₹690 Cr	+17.4%
EBITDA Margin	21.8%	19.3%	17.4%	16.2%	—
PAT (Net Profit)	₹188 Cr	₹246 Cr	₹300 Cr	₹346 Cr	+22.5%
EPS	₹5.87	₹7.67	₹9.34	₹10.79	+22.5%
ROE	11.4%	13.5%	15.0%	15.3%	—
ROCE	14.5%	17.4%	18.1%	18.7%	—
Total Debt	₹42 Cr	₹46 Cr	₹45 Cr	₹64 Cr	+15.1%
Free Cash Flow	₹107 Cr	₹347 Cr	-₹70 Cr	₹44 Cr	-25.7%

🟢 Revenue has grown at 29.8% a year over 3 years.

🟢 EBITDA has grown at 17.4% a year over 3 years.

🔴 EBITDA Margin has fallen from 21.8% to 16.2% over 3 years (-5.7 pts).

🟢 PAT (Net Profit) has grown at 22.5% a year over 3 years.

🟢 EPS has grown at 22.5% a year over 3 years.

🟢 ROE has risen from 11.4% to 15.3% over 3 years (+3.9 pts).

🟢 ROCE has risen from 14.5% to 18.7% over 3 years (+4.3 pts).

🔴 Total Debt has grown at 15.1% a year over 3 years.

🔴 Free Cash Flow has shrunk at 25.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹5,830 Cr

Total Liabilities

₹3,568 Cr

Cash & Equivalents

₹397 Cr

Operating Cash Flow

₹316 Cr

Capex

-₹272 Cr

Shareholding (proxy)

Institutional Holding

3.0%

Insider Holding

72.8%

Corporate Actions

Dividend Rate

₹3.25

Ex-Dividend Date

13 Aug 2026

Analyst Consensus

Recommendations

0 Buy · 0 Hold · 2 Sell

Target Price (Mean)

₹245

-3.8% vs CMP

Target Range

₹220 – ₹270

Peer Comparison

Company	P/E	ROE
BHARTI AIRTEL LIMITED	39.8x	20.2%
VODAFONE IDEA LIMITED	3.6x	—

Recent News

1 positive2 mixed3 general

RailTel Corporation of India shares rise over 2% as firm bags second order of the week worth ₹197 crore from SBI

Upstox, 14 OctOrder win

🟢Potentially positiveAn order or contract win, which adds to future revenue. How much depends on its size against annual sales and on when it is executed.

Is RailTel Corporation of India the Best Stock in Its Sector? A Look at the Numbers

Univest, 15 Oct

RailTel share price jumps 2% on winning repeat order from SBI

Business Standard, 14 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Stocks in news: Adani Enterprises, Hyundai Motor India, BHEL, BEL, Groww, Tata Elxsi and RailTel

The Economic Times, 14 Oct

RailTel Corporation shares jumps 6% after ₹166.8-cr work order from EPFO

Moneycontrol.com, 19 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Why RailTel Corporation of India Share Price is Rising

Equitymaster, 19 Aug

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Profitability · Valuation

MiddlingRisk

WeakFinancial Health

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 3 high-severity red flags sit above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑