Railtel share price target: Indian Railway stocks are currently making a buzz in the stock market. One such stock is RailTel Corporation which provides telecommunication facilities for railways. The demand for the internet is rising and access to communication services on railways is now crucial. Here, companies like Railtel will greatly benefit from this rising demand. This brings us to questions like what can be Railtel’s Share price target for 2023, 2024, 2025 and upto 2030. We will also acknowledge if it’s the right time to invest in Railtel Corporation Of India Ltd at the current price.
As per market analysts, RailTel share price could see strong upside over the next 5 years. As this article on RVNL share price target suggests, railway infrastructure stocks are doomed for robust growth given the policy impetus and growth trends. RailTel too could ride this wave given its competitive strengths.
Table of Contents
About Railtel
Railtel is a Mini Ratna public sector company under the Ministry of Railways. The company has played a key role in bringing high-speed connectivity and digital services to the Indian Railways and the country at large. Established in 2000, RailTel has spent the last two decades modernizing and upgrading the telecom infrastructure for India’s vast railway network.
Leveraging its pan-India optic fiber cable network spanning over 61,000 route km, RailTel provides essential communication services like broadband internet, VPN, WiFi, and more to keep the Indian Railways running smoothly. Beyond railways, RailTel has extended its infrastructure to enable digital inclusion across India’s remotest rural areas as part of the Digital India initiative.
Railtel’s technical chart
The share price of Railtel is Rs. 161.10 as of 24th of July. The share is trading near its all time high price of Rs. 174.7.
Technically Railtel is strong stock because:
- The stock is above its 20, 50 and 200 daily EMA.
- It broke its previous high of ₹142
- Railtel is constantly making higher highs with rising volume.
Railtel share price target 2023
Railtel’s share price target for 2023 is ₹168 as minimum target and ₹173.50 as maximum target. Looking at the financials, over the past few years, the company has delivered steady revenue growth. It’s revenue rose from Rs 1,080 crore in FY20 to Rs 1,521 crore in FY22. This reflects a healthy compound annual growth rate (CAGR) of 17%.
This growth has been achieved on the back of strong performance across RailTel’s business segments. Key growth drivers have been telecom services such as VPN, internet bandwidth and tower colocation services. The company’s system integration and project execution business has also grown significantly.
Railtel share price target 2024
As per our analysis, the minimum share price target for Railtel in 2024 will be ₹180, and the maximum price target will be ₹188.
RailTel is now looking to accelerate growth by increasing offerings in new age segments like data centers, cloud services, IoT, and cybersecurity. With India’s rising data consumption and digitization requirements, these segments offer multi-fold growth potential.
Along with revenue growth, RailTel has also seen consistent improvement in profitability over the years. Net profit has jumped from Rs 138 crore in FY20 to Rs 208 crore in FY22.
Railtel share price target 2025
Operating margins have remained healthy in the range of 22-24% due to the company’s asset-light business model and efficient operations. The debt-free balance sheet also provides stability to its net profits. As total revenue scales up further, operating leverage will ensure greater efficiency and margin expansion for RailTel.
For PSUs like RailTel, government policies and budgetary support play a crucial role. Here too, the outlook seems promising. In the year 2025, Railtel’s share price target can reach a minimum value of ₹196 and a maximum value of ₹201.
The Indian government remains committed to mass rapid digitization under initiatives like Digital India and Smart Cities mission. This is opening up significant demand for IT and connectivity infrastructure. Being a strategic entity for Indian Railways, a sustained increase in capital outlay for Railways also bodes well for RailTel.
Railtel share price target 2030
| Year | Railtel Share Price First Target (₹) | Railtel Share Price Second Target (₹) |
|---|---|---|
| 2023 | 168 | 173.50 |
| 2024 | 180 | 188 |
| 2025 | 196 | 201 |
| 2026 | 213 | 231.20 |
| 2027 | 244 | 253.60 |
| 2028 | 264 | 282.15 |
| 2029 | 288 | 297 |
| 2030 | 308 | 318.40 |
The Share price target for Railtel looks promising upto 2030. We can get maximum targets of ₹318.40 by year 2030. The government has laid out plans to make Indian Railways Future ready by 2030. Backed by this policy direction, RailTel is well-positioned for strong order book growth. Execution of these projects will drive the company’s growth over the coming decade.
Railtel Quarterly Results
Quarterly Results (All Figures in Cr.)
| PARTICULARS | MAR 2022 | JUN 2022 | SEP 2022 | DEC 2022 | MAR 2023 |
|---|---|---|---|---|---|
| Net Sales | 455.23 | 370.46 | 425.12 | 450.53 | 700.41 |
| Total Expenditure | 359.03 | 304.24 | 324.87 | 377 | 601.35 |
| Operating Profit | 96.20 | 66.22 | 100.25 | 73.53 | 99.06 |
| Other Income | 6.96 | 7.58 | 10.94 | 6.33 | 9.29 |
| Interest | 1.13 | 0.53 | 0.68 | 0.44 | 1.26 |
| Depreciation | 43.04 | 39.56 | 36.55 | 36.95 | 41.20 |
| Exceptional Items | 14.15 | 0 | 0 | 0 | 36.54 |
| Profit Before Tax | 73.14 | 33.71 | 73.96 | 42.47 | 102.43 |
| Tax | 19.03 | 8.63 | 18.79 | 10.89 | 26.88 |
| Profit After Tax | 54.11 | 25.08 | 55.17 | 31.58 | 75.55 |
| Adjusted EPS (Rs) | 1.69 | 0.78 | 1.72 | 0.98 | 2.35 |
Should you buy Railtel at the current price?
At the current price of Rs. 161.10, RailTel is valued at a P/E of around 27.59. The sector PE is 75.39, which is much higher. Railtel’s PE ratio seems quite reasonable, given the company’s track record and growth visibility. If RailTel can sustain its momentum while benefiting from sector tailwinds, there is potential for further re-rating.
Future Share Price Prediction (Forecast) of Railtel
Short term prediction for Railtel
Medium term prediction for Railtel
The Above data shows the Share price prediction of Railtel using ARIMA Model. The prediction is based on historical data from 2021.
Long term prediction for Railtel
Here is the plot showing the actual closing prices and the predicted prices using the Linear Regression model up to the year 2030. As you can see, the model has made an extrapolation based on the trend it learned from the training data from the past.
What is the Future of Railtel?
For investors with a long-term outlook, RailTel provides an attractive opportunity to ride the India digital growth wave over the next decade. The telecom services, IT/ITeS capabilities and strong parentage make RailTel a good bet for the long term future.
Why Invest in Railtel
- Railtel has shown strong profit and revenue growth over the past 3 years – a good sign that the business is expanding.
- The company has very little debt and is in a healthy financial position. This gives them flexibility to invest and grow.
- Profit margins have remained high over the past 5 years, indicating efficient operations.
- The stock price looks attractive relative to earnings growth potential. This makes it seem reasonably valued.
- Promoters own a large stake, meaning their interests are aligned with regular shareholders.
Why Not Invest in Railtel
- The company has some significant outstanding contingent liabilities. If these were to materialize, it could negatively impact finances.
- As a state-owned enterprise, there may be some uncertainty around government policies and continuity of business focus.
- The telecom industry is competitive. Railtel will need to continue adapting and maintaining network infrastructure to keep up.
Frequently Asked Questions
Is Railtel Profitable?
Railtel is a profitable company and their profit for March 2022 was ₹208.34 Crores.
Is Railtel Overvalued?
Compared to its peers, based on PE Ratio, Railtel is an undervalued company.
Are financials of Railtel good for investment?
Based on multiple analyses, we give Railtel a rating of 4.2 out of 5 for its financials. The company has sound financials with stable growth history.
Final Words
Railtel’s Share price target for future looks promising. The company has shown good financials and growth but does face some risks from liabilities, competition and industry disruption. The high promoter stake is encouraging, but investors should be aware of the potential challenges too.
Disclaimer: The stock market is subject to fluctuations, and investing involves risks. It is advisable to conduct thorough research and seek professional advice before making any investment decisions.
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