RailTel Corporation of India, a wholly owned subsidiary of Indian Railways, has hit a new 52-week high on the exchanges. Investors are bullish on the company after registering a healthy upside record on the revenue front along with a gradual improvement in profitability. RailTel trades down 140 on BSE and has given double digit returns to its investors in a short span of time. The stock has gained nearly 38% in three months. The stock gained a little over 10% on Tuesday alone. Analysts are bullish on RailTel’s strong outlook for H2 FY23 and have given a Buy recommendation on the stock.
Feather BSERailTel stock climbed over 10% on Tuesday to touch a 52-week high 137.70 each. However, stock. ended on 135.90 each, an increase of 8.63%. its Market hat is around 4,361.55 crores.
RailTel shares have gained nearly 29 per cent in a month on Dalal Street. Meanwhile, on account of the current strong rally, the shares have now given at least 37.9% gain in three months. stores was less than 100 on August 16, 2022. Year-to-date, the stock is up about 18% on D-Street.
In the second quarter, RailTel’s consolidated net profit stood at approx. 55.24 crore – more than double 25.85 crore in Q1FY23. However, Q2 PAT declined from 67.50 crore in the second quarter of FY22. Revenue from operations was strong 428.71 Crore in Q2FY23 — Growing from 358.49 crore in Q2FY22 and 376.85 crore in Q1FY23.
Should you buy RailTel shares?
In its report, ICICI Securities Research analysts Sanjesh Jain and Aakash Kumar highlighted that RailTel’s EBITDA was low at 8.6% (up to 50% QoQ on normalization of its telecom services) to Rs 1 billion as project services margins continued to shrink (EBIT). Margin: 3.4%).
However, analysts also said that RailTel shared strong guidance on: 1) Revenue/EBITDA growth of 20% in FY23 and onwards; 2) Project business revenue of Rs 10 billion in FY 2013 (Rs 15 billion possible in FY 24, with accelerating execution); The order book is healthy at Rs 45 billion (revaluation has declined by Rs 58 billion from Q1FY23); 3) the addition of new services especially consulting, as well as the monetization of some Property, will provide a reverse; and 4) Armor and allied services will provide significant delta to EPS.
The note said, “We raise our EPS estimates by 3-11% on FY23EFY24E, and target price to Rs160 (from Rs120), as we raise the P/E multiple to 18x FY24E EPS (earlier: 17x) Keep buying. Risks: Slower revenue growth, especially in project services, and lower margins in telecom services.”
Disclaimer: The views and recommendations given above are of individual analysts or broking companies and not of Mint.
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