⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
RAILTEL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.8
| Stock Code | RAILTEL | Market Cap | 10,646 Cr. | Current Price | 332 ₹ | High / Low | 479 ₹ |
| Stock P/E | 32.9 | Book Value | 65.8 ₹ | Dividend Yield | 0.86 % | ROCE | 21.8 % |
| ROE | 16.5 % | Face Value | 10.0 ₹ | DMA 50 | 348 ₹ | DMA 200 | 362 ₹ |
| Chg in FII Hold | 0.14 % | Chg in DII Hold | 0.06 % | PAT Qtr | 87.4 Cr. | PAT Prev Qtr | 63.6 Cr. |
| RSI | 44.0 | MACD | -3.34 | Volume | 45,85,366 | Avg Vol 1Wk | 22,69,639 |
| Low price | 265 ₹ | High price | 479 ₹ | PEG Ratio | 1.46 | Debt to equity | 0.03 |
| 52w Index | 31.2 % | Qtr Profit Var | 5.40 % | EPS | 9.99 ₹ | Industry PE | 21.4 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT at ₹87.4 Cr, up from ₹63.6 Cr, showing sequential growth. EPS at ₹9.99 indicates moderate earnings power.
- Margins: ROE at 16.5% and ROCE at 21.8% reflect strong efficiency and profitability.
- Debt Ratios: Debt-to-equity at 0.03 shows negligible leverage, enhancing financial stability.
- Cash Flows: Debt-free structure supports healthy cash flows and operational resilience.
💹 Valuation Indicators
- P/E Ratio: 32.9, higher than industry average of 21.4, suggesting premium valuation.
- P/B Ratio: Current price ₹332 vs. book value ₹65.8 → ~5.0x, expensive relative to assets.
- PEG Ratio: 1.46, reasonable, showing growth-adjusted valuation is balanced.
- Intrinsic Value: Current valuation appears stretched, offering limited margin of safety.
🏢 Business Model & Competitive Advantage
- RailTel Corporation operates in telecom and broadband services, leveraging railway infrastructure.
- Competitive advantage lies in government backing, pan-India optical fiber network, and niche positioning in railway telecom services.
- Business model benefits from digital infrastructure expansion and government connectivity initiatives.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between ₹300 – ₹315, closer to DMA200 and support levels.
- Long-Term Holding: Suitable for investors seeking exposure to digital infrastructure growth, though current valuation is slightly expensive. Best to accumulate on dips.
✅ Positive
- Strong ROCE (21.8%) and ROE (16.5%).
- Debt-free balance sheet ensures financial resilience.
- Sequential PAT growth from ₹63.6 Cr to ₹87.4 Cr.
⚠️ Limitation
- P/E ratio of 32.9 is expensive compared to industry average.
- P/B ratio of ~5.0x indicates stretched valuation.
- Dividend yield of 0.86% is modest.
📉 Company Negative News
- Valuation premium may limit near-term upside.
- Stock trading below DMA200 indicates weak momentum.
📈 Company Positive News
- Quarterly profit variation of 5.40% YoY highlights growth momentum.
- FII holding increased (+0.14%) and DII holding increased (+0.06%), showing institutional confidence.
- Strong 52-week performance with 31.2% gain.
🏭 Industry
- Telecom and digital infrastructure sector trades at industry PE of 21.4, lower than RailTel’s 32.9, showing premium valuation.
- Sector growth supported by government digital initiatives and rising broadband demand.
🔎 Conclusion
- RailTel is financially strong with solid return ratios and negligible debt.
- Valuation is stretched, limiting near-term upside, but long-term prospects remain positive given digital infrastructure growth.
- Best suited for long-term investors with entry around ₹300 – ₹315 offering a reasonable margin of safety.
I can also prepare a comparative HTML snapshot of RailTel versus BSNL or MTNL to highlight differences in valuation, profitability, and growth prospects in the telecom infrastructure space.