Order from C-DAC includes supply, installation, integration, testing & commissioning of IT infrastructure in green field data center at New Delhi and Bengaluru along with training & support.

The contract will be executed within 300 days from the date of work order.

RailTel, a Mini Ratna (Category-I) Central Public Sector Enterprise is an information and communications technology (ICT) provider and one of the largest neutral telecom infrastructure providers in the country owning a pan-India optic fiber network on exclusive Right of Way (ROW) along Railway track. As on 31 Dec 2022, the Government of India holds 72.84% stake in the company

The company's consolidated net profit declined 51.6% to Rs 31.95 crore despite of 8.8% rise in net sales to Rs 454.32 crore in Q3 FY23 over Q3 FY22.

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Railtel Corporation of India has received the work order from Centre for Development of Advanced Computing (C-DAC) for Supply, Installation, Integration, Testing and Commissioning of IT infrastructure in green field Data Centre at New Delhi and Bengaluru along with Training and Support amounting to Rs. 287.57 crore (including taxes).

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The credit rating agency has reaffirmed the company's long-term rating at [ICRA] AA-” and the short-term rating at [ICRA] A1+”.

ICRA said that the revision in the outlook to 'positive' factors in ICRA's expectation that Railtel Corporation of India (Railtel) will demonstrate healthy revenue growth on the back of a strong order book position and sustenance of a healthy financial risk profile demonstrated by zero debt and a strong liquidity position.

Railtel's operating income (OI) witnessed healthy growth in FY2022 and 9M FY2023 and the growth momentum is likely to continue, supported by a robust order book position of Rs. 4,985 crore as on December 31, 2022.

ICRA continues to factor in Railtel's strong liquidity position, evident from the sizeable cash and liquid investments (including fixed deposits) of around Rs. 660 crore as on December 31, 2022 and healthy financial flexibility with a conservative capital structure.

The ratings continue to reflect Railtel's strong parentage with majority ownership by the Government of India (GoI) under the Ministry of Railways (MoR), its healthy credit profile and a strong liquidity position.

The ratings consider Railtel's long track record (over 20 years) of operations in the telecom infrastructure space. The company owns ~62,000 km of optical fibre network across the country through which it provides national long-distance services, internet and passive infrastructure services.

The ratings, however, are constrained by the expected moderation in Railtel's operating profit margins due to an increase in the proportion of the relatively less profitable project segment.

Its operations in the telecom segment remain exposed to intense competition and network expansion by other telecom operators. The revenue generation from the project business, on the other hand, is exposed to lumpiness in revenues.

The ratings note that the company is obligated to pay dividends to the GoI, which might impact its liquidity position. Its cash flow from operations are also impacted by the high receivable levels, although the counterparties are GoI-held entities, a sizeable proportion of the same has back-to-back arrangements with sub-contractors and a large part of the same has favourable ageing profile.

Railtel Corporation of India is a Miniratna (Category-I) PSU, which owns a pan-India optic fibre network providing broadband and multimedia services, along with modernisation and maintenance of the communications network of the Indian Railways. It has two main lines of business—telecom and projects. Under telecom services, it provides lease line services (NLD), internet services (ISP) and passive infrastructure services (IP-1). Under projects, the company gains from its expertise to lay and maintain OFC network for other entities.

The company's consolidated net profit declined 51.6% to Rs 31.95 crore despite of 8.8% rise in net sales to Rs 454.32 crore in Q3 FY23 over Q3 FY22.

The scrip rose 0.04% to currently trade at Rs 111.75 on the BSE.

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Railtel Corporation of India has received reaffirmation in credit ratings from ICRA as under:

Long term bank facilities - ICRA AA-
Short term bank facilities - ICRA A1+

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