Railtel share price

Railtel Shares Surge 10% After Securing Rs 79.8 Crore MHADA Contract: Growth on the Horizon

Railtel Corporation of India is back in the spotlight with a significant 10% jump in its share price, hitting Rs 449 in Wednesday’s afternoon trade (October 16). The surge comes on the heels of a major Rs 79.8 crore order from the Maharashtra Housing And Area Development Authority (MHADA). The contract will see Railtel establishing, migrating, and managing cloud-based data centers and disaster recovery sites for MHADA, a critical win that further boosts the company’s standing in the telecom sector.

Despite this positive momentum, Railtel shares had dipped by 21% over the past three months. However, with this new contract and other recent achievements, the tide appears to be turning.

Railtel’s New Navratna Status: A Game Changer

In a move that strengthens its position in the market, Railtel was elevated to Navratna status by the government on August 30. This prestigious recognition puts Railtel among the elite public sector enterprises in India, giving it enhanced decision-making powers and greater operational freedom. With a reported annual turnover of Rs 2,622 crore and a net profit of Rs 246 crore in FY24, Railtel is now better equipped to seize new opportunities and scale up operations.

Strong Order Pipeline and Revenue Growth

This isn’t Railtel’s only major win in recent months. In September, the company secured another significant contract—worth Rs 156 crore—from Maharashtra Rural Development. The project focuses on operationalizing ASSK-GP initiatives across the Konkan, Pune, and Nashik regions, further cementing Railtel’s role in driving rural development through technology.

Impressive Financial Performance in FY24

Railtel has consistently delivered strong financial performance. In the June 2024 quarter, the company posted a 25.2% year-on-year rise in net profit, reaching Rs 48.7 crore. Revenue from operations also grew by 19.4% YoY to Rs 558.1 crore, underscoring the company’s solid growth trajectory.

Looking ahead, Railtel is forecasting telecom revenue to grow by 9-10%, with project revenue expected to hit Rs 2,000 crore. This is projected to drive overall revenue growth of 25-30% in FY25, painting a promising picture for the future.

What Investors Are Watching

With shares trading 8% higher at Rs 440 on the NSE by 12:50 PM, investor sentiment is clearly bullish. Railtel’s ability to secure large-scale contracts and its recent elevation to Navratna status have created a positive outlook for the company.

Key things to watch moving forward include the successful execution of the MHADA and Maharashtra Rural Development contracts, as well as Railtel’s ongoing efforts to expand its telecom and IT services portfolios. With its strong project pipeline and financial growth, Railtel is well-positioned to maintain its upward trajectory in the coming quarters.

Conclusion:

Railtel Corporation of India is on a roll, with its shares seeing a 10% jump following the announcement of a new Rs 79.8 crore contract from MHADA. Its elevation to Navratna status, along with recent large-scale project wins and solid financial performance, signals a bright future for the company. Railtel share price, Investors will be keeping a close eye on how Railtel executes these contracts and capitalizes on its enhanced status to drive further growth in FY25.

FAQs:

1.Why did Railtel’s share price jump 10%?

A. Railtel’s shares surged after it secured a Rs 79.8 crore contract from MHADA, boosting investor confidence.

2.What is Railtel’s new Navratna status?

A. Railtel was elevated to Navratna status on August 30, giving it greater decision-making power and operational freedom.

3.How much profit did Railtel report in FY24?

A. Railtel reported a net profit of Rs 246 crore and a turnover of Rs 2,622 crore for FY24.

4.What was Railtel’s latest major contract win?

A. In September, Railtel won a Rs 156 crore contract from Maharashtra Rural Development to operationalize projects in Konkan, Pune, and Nashik.

5.How did Railtel perform in the June 2024 quarter?

A. Railtel posted a 25.2% YoY rise in net profit, reaching Rs 48.7 crore, with revenue from operations growing 19.4% YoY.

6.What is Railtel’s revenue growth forecast for FY25?

A. Railtel expects telecom revenue to grow by 9-10%, with overall revenue growth projected at 25-30% for FY25.

7.How has Railtel’s stock performed recently?

A. Railtel’s shares jumped 10% after the MHADA contract, although they had declined by 21% over the past three months.

8.What are Railtel’s major upcoming projects?

A. Railtel’s major projects include managing cloud-based data centers for MHADA and operationalizing ASSK-GP projects in Maharashtra.

9.What is the significance of Railtel’s Navratna status?

A. Navratna status allows Railtel to have greater autonomy in decision-making and operations, giving it an edge in expanding its business.

10.What sectors are driving Railtel’s growth?

A. Railtel’s growth is driven by its expanding telecom services and IT project revenue, especially through government contracts.

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