RAILTEL - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Rating: 2.7

📊 Core Financials & Profitability

Returns Profile

ROCE at 16.2% and ROE at 12.0% — decent efficiency, but not standout.

Quarterly Earnings

EPS ₹6.68 with PAT up from ₹38.4 Cr. to ₹68.2 Cr. — +23.4% growth, encouraging but volatile.

Debt & Leverage

Debt-to-equity 0.03 — nearly debt-free, reassuring financial structure.

Dividend Yield

Just 0.74%, modest but typical for growth-centric PSUs.

💰 Valuation Metrics & Sentiment Check

Metric Value Interpretation

P/E Ratio 65.6 Extremely overvalued vs industry average (28.7)

P/B Ratio ~7.15 High premium — suggests optimistic market sentiment

PEG Ratio 22.5 Alarmingly high — valuation greatly exceeds earnings growth

RSI 34.3 Near oversold — potential technical rebound zone

MACD –6.37 Bearish divergence — trend weakening

DMA Comparison 50DMA ₹400 / 200DMA ₹381 Current price below both averages — bearish slope

Volume Spike: Current volumes > avg — could indicate short-term volatility or heavy exits.

52W Index: At 46.9% — suggests it's trading well below its yearly highs.

Institutional Trends

Both FII (+0.34%) and DII (+0.33%) increased stake — early signs of quiet accumulation?

🌐 Business Model & Competitive Advantage

Core Domain: ICT infrastructure and telecom services, primarily catering to railways and government clients.

Strengths

Backed by Indian Railways — project pipeline visibility remains high.

Strong execution track record in network rollouts and data services.

Near-zero debt and consistent profitability offer financial robustness.

Weaknesses

Rich valuation relative to earnings — leaves little room for disappointment.

Regulatory dependency and slow-moving contracts can dampen growth momentum.

📌 Entry Zone & Strategic View

Suggested Entry Range: ₹370–₹385 — near technical supports and potential bounce zone (RSI + MACD setup).

Long-Term Guidance

Suited for PSU growth exposure within digital infrastructure.

Requires cautious stance due to aggressive valuation and cyclical nature.

Keep track of new order wins, telecom monetization policies, and execution cycles.

Want me to pit RailTel against IRCON, RVNL, and RITES for PSU potential, dividend metrics, and tech infra roles? I’ll build a solid comp sheet for easy scanning. Say the word and we’ll roll. 🚄📡

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