RailTel shares surge 8% on securing ₹16.8 crore defence contract

Shares of RailTel Corporation of India jumped 8 percent on Friday after the company announced that it had secured a ₹16.8 crore work order from the Ministry of Defence. The project involves laying Optical Fiber Cable (OFC) and is expected to be completed by March 2026. The latest order adds to RailTel’s growing portfolio of government contracts, boosting investor confidence.

RailTel revealed the details of the new contract in an exchange filing, stating that it had received the work order for OFC laying from the Ministry of Defence, valued at ₹16,89,38,002 (including tax). The project will enhance the communication infrastructure for the ministry and strengthen RailTel’s position as a leading telecom infrastructure provider.

String of Recent Contract Wins:

The latest order follows a series of contract wins for RailTel. Earlier this month, the company bagged a ₹37 crore work order from the Madhya Pradesh State Electronics Development Corporation. Additionally, it recently secured a ₹288 crore contract from East Central Railway. Under this deal, RailTel will implement Kavach, an indigenous Train Collision Avoidance System, across 502.2 route kilometers of low-density railway tracks, significantly boosting railway safety measures.

Strong Financial Performance:

RailTel reported a 4.68 percent rise in standalone net profit to ₹65.05 crore in Q3 FY25, compared to ₹62.15 crore in the same quarter last year. The company's revenue from operations jumped 14.85 percent to ₹767.62 crore during the period, reflecting its growing business momentum.

Stock Price Trend:

Following the contract announcement, RailTel’s stock surged 8.1 percent to its intraday high of ₹321.60. Despite the recent rise, the stock is still 48 percent below its 52-week high of ₹618.00, which it hit in July 2024. Meanwhile, it recently touched a 52-week low of ₹265.30 earlier this month.

In the past year, the PSU stock has shed 15 percent, but it has rebounded in March, gaining 10 percent so far, following a 31 percent decline in February. The stock was relatively flat but closed in the green in January.

With consistent contract wins and improving financial performance, the company continues to attract investor interest. However, the stock remains significantly below its peak, offering potential upside if RailTel sustains its growth trajectory and wins more high-value contracts.

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