Railtel Corporation Of India Limited — Q4 FY26 earnings call

Call held 1 May 2026

Management summary

RailTel delivered strong Q4 FY26 results, driven by robust operating revenue and PAT growth, alongside a healthy increase in its order book. The Telecom segment, bolstered by the video surveillance project and data center expansion, was a key contributor. The company provided optimistic guidance for FY27 revenue and capex, while acknowledging some market pressures and a slower-than-expected proliferation of edge data centers.

Highlights

  • Operating revenue for Q4 FY26 was ₹1,669 crores, an 83% QoQ increase from ₹913 crores in Q3 FY26.

  • Profit after tax (PAT) for Q4 FY26 was ₹142 crores, marking a 127% QoQ growth from ₹62 crores in Q3 FY26.

  • Total income for FY26 reached ₹4,328 crores, a 22% YoY increase compared to ₹3,551 crores in FY25.

  • The order book as of April 30, 2026, stood at ₹11,466 crores, demonstrating a 34% growth from ₹8,563 crores on December 31, 2025.

  • Data center business revenue grew significantly to ₹202 crores in FY26 from ₹127 crores in FY25, contributing to overall Telecom segment growth.

Concerns

  • Management indicated that the strong Q4 Telecom revenue had a 'one-off kind instance' due to the VSS project, suggesting potential non-recurrence of such high growth rates.

  • Management was evasive regarding updates on LTE deployment by railways, stating 'I don't have any latest update' and 'I will not say anything about it,' indicating a lack of clarity on this potential opportunity.

  • Growth in edge data centers is not happening 'overall pan-India basis' and demand proliferation to Tier 2/3 cities is expected to take '1 or 2 more years,' implying a slower ramp-up for this segment.

Key financials

  1. Operating Revenue ₹1,669 Cr +83%QoQ
  2. Total Revenue ₹1,680 Cr +82%QoQ
  3. PBT ₹190 Cr +123%QoQ
  4. PAT ₹142 Cr +127%QoQ
  5. Total Income (FY) ₹4,328 Cr +22%YoY
  6. PAT (FY) ₹346 Cr +17%YoY
  7. EPS (FY) ₹10.79

What they filed

Q4 FY26: revenue up 27.6%, net profit up 25.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ1 FY25Q2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26
Revenue558 843 768 1,308 744 +33%951 +13%913 +19%1,669 +28%
EBITDA103 129 121 180 116 +13%154 +19%133 +10%233 +29%
Net profit49 73 65 113 66 +35%76 +4%62 −5%142 +26%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹2,320 Cr Total
  • Project Segment (Q4 FY26) ₹1,220 Cr 52.6%
  • Telecom Segment (Q4 FY26) ₹449 Cr 19.4%
  • Pure Telecom (NLD+ISP+IP1) (Q4 FY26) ₹332 Cr 14.3%
  • Data Center (FY26) ₹202 Cr 8.7%
  • Data Center & Digital Services (Q4 FY26) ₹117 Cr 5.0%

Order book

high confidence

Total value

₹11,466 Cr

as of 2026-04-30 quantified

33.9% QoQ

Inflow this quarter

₹2,037 Cr

Execution

The order book of INR11,466 crores is unexecuted and will be converted into revenue during the future course of time.

Composition

  • Railways (client type) 21%
Management is optimistic about the order book and expects the trend to continue, with teams gaining experience in tender participation.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹300 Cr
    • Data center
    • Telecom and smaller power
    Sanjai Kumar: INR300 crores. And our budgeting, we have planned capex we have. Mostly it is data center and partly Telecom and some other smaller, power and all that.
  • Dividend ₹1.25/share (final)
    Board of Directors have recommended final dividend of INR1.25 per share in addition to INR2 per share paid by the company as interim dividend for FY '25-'26.

Guidance & targets

Revenue

  • Total Income Growth Revenue · FY27 · High confidence around 20%
    So our growth guidance will be around 20% for this financial year.

    — Sanjai Kumar

Project Revenue

  • Project Income Conversion to Revenue Project Revenue · FY27 · High confidence INR3,000 crores to INR3,500 crores
    And then if I -- if you see the revenue part, so I think INR3,000 crores to INR3,500 crores of income should get -- at least should get converted into revenue this year.

    — Sanjai Kumar

Project Profitability

  • Project Business Margins Project Profitability · Ongoing · High confidence 4% to 5% bracket
    The project business margins, we are continuously striving to remain in the 4% to 5% bracket

    — Sanjai Kumar

Capex

  • Planned Capex Capex · FY27 · High confidence INR300 crores
    We have around -- planned capex is around INR300 crores

    — Sanjai Kumar

Data Center Capacity

  • Operational Capacity Data Center Capacity · by May next year · High confidence 5-megawatt

    From 3-megawatt today

    So roughly, we will be having 3 megawatt this year. I mean we have already have 3-megawatts. And 5-megawatt capacity should be ready by May next year.

    — Sanjai Kumar

What to watch in Q1 FY27

Telecom Segment Revenue Growth

next quarter
Current 83% QoQ growth in Q4 FY26
Target Sustained growth or normalization after 'one-off' VSS project impact

Why it matters

To assess if the strong Q4 Telecom performance was an anomaly or indicative of a new growth trajectory.

Sanjai Kumar: So, Telecom generally has to be same in all quarters. This quarter, this time has happened due to this project, this VSS project. So there is a one-off kind instance.

Risks & concerns

  • Telecom market pricing pressure in enterprise business

    medium

    Prices are continuously under pressure in the enterprise business segment.

    Management acknowledged

  • One-off nature of strong Q4 Telecom revenue

    medium

    The strong Q4 Telecom revenue was partly due to a 'one-off kind instance' from the VSS project, implying it may not be recurring.

    Management acknowledged

  • Uncertainty and lack of updates on LTE deployment for railways

    medium

    Management provided no clear updates on LTE deployment by railways, a potential growth area.

    Analyst deflected

  • Slow proliferation of edge data centers and demand in Tier 2/3 cities

    medium

    Overall pan-India growth in edge data centers is not strong, and demand proliferation to Tier 2/3 cities is expected to take 1-2 more years.

    Management acknowledged

Q&A highlights

5 direct, 1 evasive
Order book for year-end 31st March 2026 Partial
This is as on date. So if you want to know 31st March, otherwise, 30th April, it is INR11,466 crores... around INR700 crores will be minus out of it. ... roughly INR10,600 crores or so, INR10,700 crores or so.

Clarifies the order book value specifically for the fiscal year-end, which is crucial for quarterly tracking, distinguishing it from the later April 30th figure.

Asked by Sanjesh Jain

Drivers of strong Telecom business growth in Q4 FY26 Direct
So if you talk of Telecom in terms. So actually, now we are -- we were executing one project for railways, which is video surveillance. And now that project is in commissioning stage. So there is requirement for providing connectivity to railways for the basically functioning of those CCTV cameras and all. That is one.

Identifies the video surveillance project for railways as a key driver for the strong Telecom segment growth, clarifying its recurring revenue nature.

Asked by Sanjesh Jain

Data center revenue growth and its inclusion in Telecom segment Direct
No, no. It is right now part of Telecom. Actually, I thought you were talking about pure Telecom income, which is NLD, ISP and IP1. But if you put whatever we have segmentation done, overall Telecom includes data center. So yes, that data center growth has also contributed to this overall growth.

Confirms that data center revenue is recognized within the Telecom segment and highlights its significant contribution to overall growth, with FY26 revenue at ₹202 crores.

Asked by Sanjesh Jain

Seasonality and one-off instances in Telecom revenue Direct
The seasonality in Telecom is not common feature. But projects, yes. So, Telecom generally has to be same in all quarters. This quarter, this time has happened due to this project, this VSS project. So there is a one-off kind instance.

Reveals that the strong Q4 Telecom revenue included a 'one-off kind instance' related to the VSS project, suggesting that such high growth may not be sustainable or recurring in subsequent quarters.

Asked by Sanjesh Jain

Update on LTE deployment by railways and opportunities for RailTel Evasive
I don't have any latest update. I will not say anything about it. But presently, I'm not aware of.

Indicates a lack of clear information or progress on a potentially significant opportunity for RailTel, raising questions about its future contribution.

Asked by Sanjesh Jain

Progress and demand for edge data centers Partial
So right now, though we have been hearing about edge data centers for quite some time. But in a true sense, we have not seen any growth overall pan-India basis, all operator's when I see. ... this momentum will take maybe 1 or 2 more years when this -- the demand for edge data centers will really get converted into the proliferation of these edge data centers in Tier 2, Tier 3 cities.

Clarifies that while two small edge data centers were commissioned, overall pan-India growth is slow, and significant demand proliferation to Tier 2/3 cities is still 1-2 years away, tempering expectations for rapid expansion.

Asked by Sanjesh Jain

FY27 Project revenue outlook Direct
And then if I -- if you see the revenue part, so I think INR3,000 crores to INR3,500 crores of income should get -- at least should get converted into revenue this year.

Provides specific forward guidance for project revenue conversion in FY27, offering visibility into the company's execution capabilities and future top-line growth.

Asked by Sanjesh Jain

Data center margin trajectory compared to pure Telecom margins Direct
No. Data center margins will not be higher than Telecom margin -- pure Telecom margin. Let me correct this. So presently - yes, let me correct. I have confirmed it from our ED Finance. He is saying yes, right now, yes. But I think I cannot comment upon the future trajectory because we are yet evolving in data center business.

Clarifies that data center margins are not expected to be higher than pure Telecom margins, providing important context for profitability expectations from this growing segment.

Asked by Vishal Periwal

2 min read 6 chapters

Detailed narrative

Strong Q4 and FY26 Financial Performance

RailTel reported robust Q4 FY26 results with operating revenue of ₹1,669 crores, an 83% QoQ increase from ₹913 crores in Q3 FY26. Profit after tax (PAT) for Q4 FY26 was ₹142 crores, marking a 127% QoQ growth from ₹62 crores in Q3 FY26. For the full fiscal year 2026, total income grew 22% to ₹4,328 crores from ₹3,551 crores in FY25, while PAT increased 17% to ₹346 crores, with EPS reaching ₹10.79.

Growing Order Book and Project Pipeline

The company's order book demonstrated strong growth, reaching ₹11,466 crores as of April 30, 2026, a 34% increase from ₹8,563 crores on December 31, 2025. Approximately 21% of the order book is from railways. Management guided for project revenue conversion of ₹3,000-3,500 crores in FY27, with project business margins targeted to remain in the 4-5% bracket.

Telecom Segment Driven by Video Surveillance and Data Centers

The Telecom segment contributed ₹449 crores to Q4 FY26 operating revenue, with pure Telecom services (NLD, ISP, IP1) accounting for ₹332 crores. This growth was significantly driven by the commissioning of the video surveillance project for railways, which provides recurring revenue. Data center revenue also saw substantial growth, reaching ₹202 crores in FY26, up from ₹127 crores in FY25, primarily serving government and PSU clients with hosted applications and digital services like Aadhaar authentication for exams.

Strategic Focus on Data Centers and Digital Services

RailTel is emphasizing data centers as a key future growth driver, with plans to commission 3 new edge data centers in Indore, Ujjain, Chandigarh, and Visakhapatnam this year. The company aims to increase its data center capacity from the current 3-megawatt to 5-megawatt by May next year, employing a hybrid strategy of own data centers and partnerships with real estate providers. Digital services, including Aadhaar authentication for government exams, are also contributing to overall digital growth.

FY27 Growth Outlook and Capital Expenditure Plans

The company provided a growth guidance of approximately 20% for its total income in FY27. To support this growth and strategic initiatives, a capital expenditure of ₹300 crores is planned for FY27. This capex will be primarily allocated to data center expansion, with a portion also directed towards the Telecom network and other smaller power-related projects.

Dividend Declaration

The Board of Directors recommended a final dividend of ₹1.25 per share for FY26. This is in addition to the interim dividend of ₹2 per share already paid for FY25-26, bringing the total dividend for the fiscal year to ₹3.25 per share.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Telecommunication earnings calls