Thanks, Danish, and warm welcome to everyone for joining in for the RailTel Corporation quarter 1 financial year '27 result discussion. From the RailTel team side, we have Mr.

Sanjai Kumar, CMD sir; then Mr. V.

Rama Manohara Rao, Director Finance; Mr. Manoj Tandon, Director Projects, Operations & Maintenance; and along with him is Mr.

Yashpal Singh Tomar, Director Network Planning and Marketing. As usual, we'll have a brief from Sanjai sir on the gone-by result, and then we'll have a Q&A.

Thank you, and over to you, sir.

Thank you, Vishal ji. A very good morning to all.

It gives me great pleasure to interact with you on the company's performance in the backdrop of Q1 financial results of FY '27, which were declared by the company on 30th July 2026. The company had a strong start to the financial year 2026-27, having achieved operating revenue of ₹893 crore in Q1 of FY '27, as against ₹744 crore in Q1 of FY '26, registering the year-on-year growth of 20%.

The telecom segment contributed ₹361 crore, and project segment contributed ₹532 crore in company's operating turnover. The total revenue for Q1 FY 2026-27 was ₹910 crore, as compared to ₹758 crore in Q1 of FY '26.

The company registered 12% growth in its profit before tax and exceptional items, which is ₹96 crore for the quarter ending 30th June 2026, as compared to ₹86 crore during the same period of previous year. The profit before tax and profit after tax for Q1 FY 2026-27 was ₹89 and 66 crore, respectively, which is almost the same as in Q1 of previous year.

Orders received during quarter ending 30th June 2026 was to the tune of ₹1,688 crore, as against total orders received during quarter ending 30th June 2025 of ₹721 crore. The company has robust order book position of ₹11,747 crore as on date.

I'm happy to inform you that the CAG has offered nil comments on the annual financial statements of FY 2025-26. We remain committed to pursuing growth and creating value for our esteemed investors.

We thank our investors for their trust in our company, which we are committed to uphold. Thank you.

Jai Hind.

Good morning, sir. Thanks for the opportunity.

Good morning, Sanjesh ji.

Thank you, sir. I just wanted to get the breakup first on the three segments, which is NLD, ISP, and IP-1.

This quarter, IP-1 is ₹27 crore.

Okay.

ISP is ₹112 crore. NLD is ₹134 crore.

What was the contribution of Railway in the total order book?

You are talking of Railway segment in the order book?

Correct.

That is around 23%. 23.5% exactly, if I say.

Got it. Now want to understand on the Kavach.

Where are we in terms of the execution for the two order win we did? How about this year how many tenders are we expecting from that segment?

Yes, actually I've been repeating this. Kavach orders are long gestation, generally will take 30 to 35 months.

There's lot of outdoor work is involved. Outdoor work is in progress in two orders of East Central Railway.

WCR, we have initiated our works because this was latest work which was West Central Railway. Outdoor works in East Central Railway is in advanced phase.

The approval of RDSO, if we see about it, is underway and is likely to happen anytime now, maybe next month. Drawing preparations have also started.

Things are going on in the right context, I would say. We are there.

If you ask about Kavach tenders, we are not seeing many Kavach tenders in this current financial year because the existing Kavach tenders which are already awarded are under execution. It is in development, I would say, and many more improvements might come based on experience.

Maybe that may be the reason. We don't really know Railways to decide when they come out with the new tenders.

I can't comment exactly on that aspect.

Once we are now doing some outdoor work and drawing and all this, when should we expect revenue recognition to happen for us?

I think this year we should book revenue out of Kavach orders.

We should start booking from this year itself.

Yeah.

Got it. Second on the telecom side, both NLD and ISP, NLD on a YoY basis, we have declined.

Last year, same quarter, we were ₹151 crore. This year, we are ₹134 crore in NLD.

What's happening in NLD? Why the growth remains to be muted?

In fact, this quarter we have turned negative. Any particular reason you think?

What I would say that normally Q1, we are expecting the renewals. Generally, our telecom customers are mostly government.

This year, somehow the renewals though services are continuing. Renewals are expected and that is why we are seeing that we could not book the revenue.

That is the major reason. As I shared with you even my last call also, that we are doing good in NLD segment.

We have got couple of new good customers like Air Force and I would say there's one private operator also. Starlink is now our customer.

Growth is happening and there is no worry for any of us regarding this thing. National Knowledge Network is one business segment where the NIC has decentralized the PO ordering.

Individual institutes are now in the process of placing orders, but they have requested not to discontinue the services because the services are being used. Those are the major reasons, I would say.

Otherwise, there's nothing to worry in NLD segment.

Once the renewals happen, we start booking the revenue. That's the way to-

Of course. Yes.

We don't book it on an accrual basis. Now that they are taking services, we book revenue, that-

No, we book on accrual basis, but then POs have to be there.

Okay. Once the POs are-

We may not Yeah. Got it.

On the ISP segment, Railwire, where are we? Competition intensity high, people moving to FWA.

Is that what is capturing the lower growth in ISP for us? No,

ISP mein, if you see the numbers, we have grown. Today we are 6.23 lakhs.

We have added almost 50,000 subscribers, if we see from the previous year at the same time today.

You see?

We have added subscribers. Of course, as you said that segment is very heated.

The ARPU is continuously under pressure. Then we are trying to do some other things, like IPTV is very good subscriber for our business in ISP segment, where we are getting good business every year.

Somehow we have to be in the market and then we have to fight with it. In broadband segment, yes, there is lot of heat.

Are we seeing demand for our cable considering that there is so much of data center build-up happening, which require a lot of terrestrial fiber and we are very well placed there? Are we seeing the private player coming to us asking for the cable capacity?

Are we seeing any sign there, or it's largely as of now the government demand what we are looking at?

No. Private players' fiber demand is there, they are asking for dark fibers.

We, having a independent and completely different right of way, our demand will always be there. We are working in that direction, how to invite investment in that kind of scenario because we don't want to put lot of capital expenditure.

Maybe we partner with someone who is sharing best revenue with us, and then maybe we can come out that kind of arrangement. As you've seen in data center also, we have good partnerships, and so that kind of model we are working out.

Of course, demand is there, and they want us to be there.

By when- Because

most other players are along the road.

Correct. Because there's a lot of demand for fiber, right?

We have good ROW, we have presence deeper in the market. That gives an advantage.

By when-

Certainly, it will come. It will take time.

Of course, the demands are there. They also may not require so fast.

Of course, demands have started coming. We will certainly be there to meet those demands in the due course of time.

Got it, sir. From a project perspective, out of this 11,000 odd crore of order book we have, how much we intend to book in this year?

I think we are expecting somewhere close to minimum, maybe 30,000 3,500 crore of project income should be booked in this quarter. We'll try certainly for best, but that is where we have certainty.

No, sorry. 30,000-

3,500 maybe.

3,500, you mean.

Yes, 3,500.

Yeah, ₹3,500 crore of revenue order in FY '27.

That is our projected revenue booking.

Margin you're looking at to be at 4% to 5% range, that's the range?

I think margin, if you see, we have improved margin in this quarter in project business. Yeah.

We are continuously on the hunt looking for better margin projects.

Got it. Kavach will have better margin than this, or Kavach will be in the same range only?

No. Kavach will be certainly better than.

Better than this, right?

Slightly better than.

We maintain the outlook what we gave last quarter that we will grow at

Yes,

25% of revenue. That guidance-

See, I have always been saying that in a company of small size like RailTel, quarterly results have to be seen with lot of study. Actually, you have very good understanding.

We are very much satisfied with our performance. A small here or there, maybe it's expected ECLs, suppose if I say.

ECL can easily affect our quarterly results, but if you see on overall annual results, we are sure that RailTel is going to do good performance.

No. That certainly does.

Small numbers for small company brings a lot of volatility. We do appreciate that.

Most of the projects are government projects. Payment delays, of course, happens.

We are sure that those payments are going to come. Then we made our ECL policy to make it more transparent what way the things are happening.

No, that certainly appreciate that, sir. One last question, last quarter also there was a sharp jump in the receivables from the telecom segment.

Have we started getting that or that kind of an elevated number can remain even for this year?

Last quarter, actually some revisions are happening. Mostly, those belong to Railways.

Some revisions in estimates are happening. Those will come.

There's no issue. That was of course, one-off event.

You rightly observed it.

Got it, sir. No, that's very helpful, Sanjai sir, as usual.

Thank you very much for answering all the questions patiently, and best of luck for the coming quarters.

Thank you.

Hi, sir. Good morning.

I just joined the call, maybe I would have missed something about the Kavach part. We are partnered with Quadrant Future for Kavach.

The approval for them is still pending. Do you have any idea when we can have some update on that so that we can start recognizing revenue?

Let me first clarify that due to Kavach approval, our projects are not getting delayed, point number one. Point number two, your concern is very right, but the progress is very good, and the final testings are underway, and approvals are likely to be there anytime, maybe this month itself we are expecting.

Since these are the latest Kavach entrants, there are many modifications are being incorporated in this latest Kavach OEM, based on the experience of the previous approved OEMs' experiences in the field. That is why some time is of course being taken, but it will happen now.

Sir.

I think earlier we had an indication that even the other OEMs should approach RailTel for this integration, and we can get some revenue from that point of view also. Is it happening, sir, or is there any alternative that other OEMs are doing as of now, sir?

See, I will not comment on this question right now, but of course, if required, sometime in the future, I will comment. Right now, we are open.

We are never closed. Whosoever gives us best commercials for bidding and participating in the tenders, we are open.

Sir. Lastly, on the margin front, historically, we have 18%, 19% margins, but since last 2 years, we are at 15%.

Being the projects revenue is going ahead of the telecom, the margins are slightly down, sir. Do you think this 15% margins range will continue, or is there any possibility in the coming maybe 2 to 3 years, 4 years down the line to get some uptick in the margins?

See, I always emphasize on this point, we are actually a group of two companies in one company. One is telecom, the other is my project business.

We are maintaining our margins between 4% to 5% in project, and telecom margins, of course, almost they are already in the range where they used to be. This is simple mathematics.

If you club the two margins, you will see the mathematics. If project business, certainly which is going because of digitalization requirement of our country, IT projects will certainly be there.

Telecom requirements will be there, but then because of continuous pressure on prices in telecom and telecom becoming something like I would say it's now basic requirement, infrastructure requirement, which earlier not used to be there. When some requirement becomes infrastructure kind of requirement, its growth is always subdued by the pricing pressures.

That's why telecom, we will see. One point I want to make it clear here, because we being telecom company, we are getting lot of project businesses.

Now we are very much in the data center business, where we have focus in future years, which will certainly be growing. We have a lot of expectation from data center business segment.

We are on the right course. We are diversifying our businesses wherever we require, and I don't see that there is any challenge for RailTel as a business, an ongoing concern.

I would say that investors need not worry.

Yes, sir. Understood.

Thanks for a lot of explanation. My question is that so I understand the telecom has a constant margins and project business we are having 5% to 6% margin.

In future, if you take any future projects, do you have any plan to uptick this project margin from 5% to 6% to 6% to 7% kind of thing? That is the question.

Second is, as you are talking about this data centers business segment, what is the contribution as of now and how do you see this one ramping up in the coming 4, 5 years? That's all my last two.

Thank you, sir.

Okay. That's what I try to explain, See, project margin, generally, if you see in the industry, many project organizations, their margins are 2%, 3%, or 4%.

Very few even operate in 4% to 5%. We will strive to remain in this range, and of course, once its share in the overall revenue will increase, there will be pressure if you see it on overall basis, the margins will be seen as declining, which is actually not.

It is because of some mathematics. Our project business segment is continuously in the same margin range.

Our telecom margins are also in the same margin, but you club together, it is seen as declining, which is not the truth if you see the two segments separately. The next question is on your data center.

Data center, we have a lot of expectation. Next, maybe '27 and '28 financial years, we should be touching around ₹500 crore of revenue from this business segment.

We'll certainly be touching this year around ₹300 crore or maybe around that somewhere, more or less, in that range. The way the global scenario in cybersecurity, sovereignty, and Government of India is also thinking in that direction.

We are expecting good business in data center segment. I think that is what I want to say in this.

Sir. Thanks a lot, sir.

Thank you.

Okay.

Sir. Thanks for the opportunity.

Sir, first is in terms of our profit and loss account, there is an exceptional gain and loss that generally we book it. This time, though the numbers are small, but this is pertaining what line item for us?

See, these are based on some basically, I would say, historicity of the debtors based on when the aging of debtors increase, we are counting it in ECL. This is only provisional, and none of the accounts are doubtful.

We get all the payments. Some payment if it getting delayed after say 1 year and then 2-year periodicity, we are bringing it into the ECL account just for the sake of transparency, but then none of the accounts are doubtful.

There is nothing to worry. These are all routines, and payments come.

Then as our revenues are increasing, naturally, the ECL size and the debtors' size is also increasing. We are focusing now very concentratedly on the debtors also so that our ECL's position is also improved.

Okay. When you say it's ECL, it is non-cash only, that is fair to understand.

Yes, it is non-cash, yes.

Okay. Got it, sir.

Then- That is why

the profit this year you see that profit is seen very flat.

If you

not consider ECL, which is actually non-cash and it's notional, we are even growing in profit also.

Right. Because I think the same period last year, it was a gain, and this year it is that loss.

That's why the profit- No. Nothing.

It can get reversed. It can get reversed as soon as we receive those payments.

Got it, sir. Got it.

Then, second, in terms of our project side, what is the international orders that is there in the project? Anything color can be provided, how has been the share, incremental opportunities that we are seeing in the international side?

International orders, if I talk about, one business we are already executing in Ethiopia, which is around ₹18 crore. It is a small bucket right now.

Other orders, the revenue is already booked, like supply of some laptops, some cubes are also supplying, like these BHISHM cubes. These are the emergency medical kits being supplied by Ministry of External Affairs to various countries in the friendly gesture by honorable Prime Minister in the time of crisis in those countries.

These are very small numbers. We are expecting to enter this market cautiously and slowly.

We are working out something in Uzbekistan. We're trying, bidding in the tenders also.

Uzbekistan, Sri Lanka we participated, but somehow we didn't get it. Vietnam also we are trying something.

Opportunities, we are continuously looking for. Ethiopia, we have now a project office, and one project director is posted there.

The work is started in Ethiopia data center project.

Okay. Got it.

In terms of data center, though you did clarify, it's looking pretty healthy in terms of revenue booking also, ₹300-odd crore this year, then moving to ₹500-odd crore. Operationally, in terms of megawatt-wise, what all we are commissioning, any operational aspects can be provided, sir?

This year, we are expecting like not this year, by May 2027, a 10-megawatt facility should be commissioned in Noida. That was the first target, maybe even earlier, but maybe 1 month 1 month early than May.

Next year, we will have this 10-megawatt. Two edge data centers are already commissioned, Mumbai and Gurgaon.

They are small-capacity data centers. We are also expanding, but by very marginal capacity of 500 kW in Hyderabad.

Noida, we will made operational very small capacity in the same place because requirement is there. That is also 500 kW.

This is all small additions whatever we can do. Then we have tie-ups tie-up with Anant Raj, with Adanis, and few other facilities we have visited.

Those data centers we are taking from them, and then we are getting empanelment in in name of RailTel. Our data center work is the first priority today for us, and we are working very consciously, expeditiously to make our presence in this segment.

Okay. Sir, from a business point of view, when we are putting our data centers, we are providing a services.

When we say do a tie-up with Anant Raj and Adani, then how the business changes vis-a-vis we owning the asset and-

No, they are the passive infrastructure we have taken there. Data center services as such will be ours.

They are the passive infrastructure where we are taking from them.

Okay. I think, yeah, that's all from my side, sir.

I'll come back in the queue.

Just to clarify on this data center piece, when you say that you are taking passive infrastructure from some of the passive player, we are actually providing the cloud services, right? We are putting our own server and then we are selling the capacity on the server.

We are not actually renting the data center, correct?

No, no. Yes, you are right.

We are providing the managed and the cloud services. We are not actually providing the data center service there.

We are providing managed services, yes.

That's the right way to put it.

Data center, we have our own, and we are taking on lease also from others like these two players, and then operation becomes us.

Correct. Then we do the managed services.

We set up our own servers and then we lease it. Are we planning to go into the GPUs as well, or we are right now only on the normal-

We are in the process. You will see something in news.

We are working very hard on that.

For the AI services?

Yeah. Yes.

AI also we have started working. We are working on a project which is likely to come from Railways on their AI requirement.

We are also working in AI. You're rightly and very this thing pointed out this fact that AI also we have entered and we are working on few use cases.

Got it. We will be building SLMs, or the SLMs will belong to the Railways?

See, it is up to the customer. These will be certainly SLMs, not the LLMs.

It depends. We are in discussion.

It would be too premature to say anything, but even if it is there, because Railway use cases will not be usable anywhere else. Indian Railways is a different organization.

It's very complex structure. Those use cases may not be used anywhere else.

Got it.

It will be a private cloud for Railway. There'll be completely air-gapped.

Air-gapped system, not the public cloud, not those kind of things. No, no,

that's clear. Very helpful, Sanjai sir.

Thank you. Thank you very much.

Thank you.

Once again, thank you all investors who have participated in our investors call. That is all I want to say.

Thank you very much.