Navratna PSU of the Government of India Signs 30-Year Revenue-Sharing Deal With TECL To Build 10MW Noida Data Center, Targeting 25-30 Per Cent FY25 Growth

With a market capitalisation of Rs 12,789 crore, the company has delivered a 3-year return of 300.7 per cent, although the 1-year return stands at -3.56 per cent.

RailTel Corporation of India Ltd., a Navratna PSU under the Ministry of Railways, has announced a strategic partnership with Techno Electric & Engineering Co. Ltd. (TECL) to set up a 10MW data center in Noida. This move marks a key step in RailTel’s broader plan to strengthen its presence in the data center segment. The partnership, finalized through an open tender process, will operate on a revenue-sharing basis, under which RailTel will receive a fixed share of the total revenue. The agreement spans 30 years, with the possibility of an extension by mutual consent.

RailTel is leveraging its existing telecom infrastructure to diversify into high-growth areas. The company already provides broadband and ICT services across 6,000 railway stations in India and operates a vast optical fiber cable (OFC) network of over 62,000 route kilometers, reaching more than 70 per cent of the country’s population. Through this joint venture, RailTel aims to fast-track its data center ambitions, which also include a 30MW facility planned on its Noida land parcel. This initiative aligns with its strategy to scale operations in the rapidly growing digital infrastructure sector.

Founded in 2000, RailTel’s operations span two core business segments: Project Work Services and Telecom Services. The Project Work Services segment, contributing significantly to its top line, registered a robust 157 per cent revenue growth between FY22 and FY24, driven mainly by railway-related contracts. The Telecom Services segment grew by 21 per cent during the same period, supported by the company’s extensive urban and railway fiber networks. RailTel’s order book stands at Rs 4,680 crore, offering strong revenue visibility.

As of May 30, 2025, the stock is trading at Rs 398.5. The 52-week high and low are Rs 596.8 and Rs 275.9 respectively. With a market capitalization of Rs 12,789 crore, RailTel has delivered a 3-year return of 300.7 per cent, although the 1-year return stands at -3.56 per cent. The stock trades at a PE ratio of 63.43, reflecting investor expectations for future earnings growth. The company has guided for a 25 to 30 per cent revenue growth and a PAT margin of 9 to 10 per cent for FY25.

RailTel’s expansion into data centers, supported by revenue-sharing partnerships, underscores its evolving business model. Investors tracking Small-Cap and mid-cap growth stories, particularly in the telecom infrastructure and ICT services segments.

Disclaimer: The article is for informational purposes only and not investment advice.