Railtel Shares: Railway Stock Tanks 4%; Icici Securities Sees Further Downside

Shares of RailTel Corporation of India Ltd tanked 4 per cent successful Tuesday's waste and acquisition amid a broader weakness successful nan market. But if were to spell by ICICI Securities, nan banal stares astatine further downside potential. The home brokerage has suggested a 'Sell' connected RailTel pinch a revised target of Rs 270 from Rs 280 earlier. 

On Friday, nan PSU banal fell 3.6 per cent to deed a debased of Rs 310.65. The ICICI Securities' target suggests a 13 per cent downside for RailTel complete nan prevailing marketplace price. 

Post its Q4 results, RailTel has guided for gross maturation of 25-30 per cent successful FY26 and EBIT separator of 11-12 per cent. Revenue maturation for nan Navaratna PSU is seen importantly higher successful nan 'Projects' segment. Railtel is expecting bid inflow of Rs 4,000 crore successful FY26 and is aiming to thrust faster gross successful telecom services and prime up successful information centre business. 

ICICI Securities, however, is unimpressed. The brokerage said while nan RailTel's Q4 nett profit grew 46.3 per cent YoY, successful general, it exhibits lumpiness. 

"Railtel delivered profit maturation of 27.6 per cent successful FY25, successful statement pinch nan guidance of 25–30 per cent. The institution has reiterated its guidance of revenue/profit maturation of 25–30 per cent for FY26 connected beardown bid book (OB) summation of Rs 3,150 crore successful FY25; however, telecom gross run-rate is slower than expected," nan brokerage said. 

It added that Railtel sees its Projects business’ EBIT separator astatine 4–5 per cent and consolidated separator astatine 11–12 per cent, which are somewhat little than expected. 

"We trim our FY26–27E EPS by 3–4 per cent connected slower telecom services gross and little projects EBIT margin; target value lowered to Rs 270 (from Rs 280) pinch a P/E aggregate to 20 times FY27E (unchanged). Retain SELL," it said.

ICICI Securities said nan Quadrant’s Kavach exertion is now established, which has helped Railtel participate successful Kavach. The first Rs 244 crore Kavach statement has been won, and nan execution is apt from Q3FY26. 

"Kavach execution is besides limited connected support of Version 4.0 products wherever nary subordinate has yet received approval. RailTel does not expect immoderate hardware bottleneck for its Kavach equipment, arsenic Quadrant has an exclusive proviso statement pinch Railtel. It appears Railway has delayed nan implementation of LTE network, arsenic they are evaluating nan deployment of 5G connected nan 700MHz spectrum band. Immediately, Railway would beryllium utilizing UHF exertion for moving Kavach system," nan brokerge said.

Railtel said it is very adjacent to commissioning 2 separator information centre and is apt to committee 7–8 separator information centres successful FY26. Total gross expected is Rs 10 crore from nan information centre conception and Railtel would make this portion of it, arsenic nan remaining gross shall beryllium shared to partner who has put capex to set-up information centres. 

Railtel is trading nan information centre, and implementing web connectivity and information layer, ICICI Securities noted.