How Strong Is RailTel’s Q2 FY26 Performance Compared to Peers in the PSU Telecom Space?
About RailTel: RailTel Corporation of India Ltd., a Mini Ratna PSU under the Ministry of Railways, operates one of the largest neutral telecom infrastructure networks in India. Its optical fiber network spans over 60,000 km, connecting more than 6,000 stations and major government facilities. The company provides data, broadband, and e-office services, playing a key role in Digital India and government connectivity initiatives.
RailTel reported an impressive set of Q2 FY26 numbers, continuing its growth momentum with double-digit revenue and profit increases. Improved execution in network projects, along with strong order inflows from BharatNet and NIC, bolstered the quarter’s performance.
For traders who focus on PSU momentum, our advisory desk regularly publishes a Short-Term Swing Setup to identify breakout opportunities in government-linked stocks like RailTel and IRCON.
Q2 FY26 Performance Snapshot
| Metric | Q2 FY26 | YoY Change | QoQ Change |
|---|---|---|---|
| Revenue (₹ Cr) | 951 | +13% | +28% |
| EBITDA (₹ Cr) | 155 | +19% | +33% |
| EBITDA Margin (%) | 16.23% | ↑ 93 bps | ↑ 67 bps |
| Net Profit (₹ Cr) | 76 | +5% | +15% |
EBITDA growth was supported by a higher contribution from RailWire broadband and project implementation revenue. The company’s focus on high-margin government data network projects has helped maintain profitability despite rising employee costs.
Peer Comparison Among PSU Tech & Connectivity Firms
| Company | CMP (₹) | P/E (x) | ROE (%) | EBITDA Margin (%) |
|---|---|---|---|---|
| RailTel | 360 | 22.5 | 17.8 | 16.2 |
| IRCON | 278 | 18.3 | 19.4 | 15.0 |
| RITES | 580 | 20.2 | 18.7 | 14.8 |
RailTel’s valuation remains at a modest premium to IRCON and RITES owing to its steady cash flows and digital infrastructure positioning. The company’s expanding order book from government contracts continues to underpin earnings visibility.
Valuation Metrics Overview
| Metric | Current | 5-Year Range | Analyst Comment |
|---|---|---|---|
| P/E | 22.5x | 16–24x | Trading near upper end of historical band |
| EV/EBITDA | 13.8x | 10–15x | Valuation fair given growth prospects |
| ROE | 17.8% | 15–20% | Consistent profitability with low leverage |
Investors seeking insights into PSU market momentum can refer to our daily Nifty & BankNifty Pulse section for tactical positioning updates across large-cap indices.
With consistent government contract wins and a robust balance sheet, RailTel remains well-placed to benefit from India’s digital infrastructure expansion under BharatNet and PM GatiShakti projects.
Investment Horizon Verdict
Short Term (1–3 months): Range-bound; consolidation likely near ₹340–₹370 levels.
Medium Term (3–9 months): Positive bias with potential upside toward ₹420 if order inflow momentum sustains.
Long Term (9+ months): Attractive PSU digital play; potential to deliver steady compounding as revenue mix diversifies.
Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, believes RailTel offers a unique combination of PSU safety and digital growth. Investors can consider accumulating gradually for a long-term horizon, given its improving profitability and national infrastructure alignment.
Discover more insights at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on PSU Telecom Stocks
- Is RailTel a good long-term investment after Q2 FY26 results?
- How does RailTel compare to IRCON and RITES?
- Which PSU telecom stock offers stable growth prospects?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
