MARKETS

RailTel Corp Shares Up 5% After Securing Rs 287.57 Crore Contract

RailTel Corporation shares jumped 5% after securing an order of Rs 288 crore from C-DAC.

Shares of RailTel Corporation of India rose 5% on March 15 as the company secured an order of Rs 287.57 crore.

The work order for the Centre for Development of Advanced Computing is to provide, install, integrate, test and commission IT infrastructure, as well as training and support at greenfield data centres in New Delhi and Bengaluru, the companies said in an exchange filing.

RailTel said the order had to be executed within 300 days of the date the work order was placed.

Shares of RailTel Corp were trading 3.3% higher at Rs 108.60 at 9:17 am on the BSE.

ICICI Securities noted that RailTel Corp had seen increased competition for project business from government entities and private companies. This led the company to shift its strategy to chasing volume-based contracts earlier from margin-based contracts. The brokerage said this could help boost earnings before interest and taxes (EBIT) for the project business.

The brokerage noted that RailTel enjoys an advantage in Indian Railways as it has exclusive access to railway infrastructure such as rights of way (ROW) across 67k-Rkms of the track, space for towers, etc. However, sharing private players with railway opening infrastructure should increase competition. The brokerage noted, though, that RailTel believes it is well-positioned due to existing relationships and the lead times of its peers in deploying capex.

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