RailTel Q1 FY26: Revenue surges 33%, net profit jumps 36% amidst margin squeeze

RailTel Corporation, a Navratna Public Sector Undertaking and a telecom infrastructure provider, announced strong financial results for the first quarter ended 30 June 2025. For Q1 FY26, RailTel’s revenue from operations surged by 33.3% year-on-year to Rs. 743.81 crore, compared to Rs. 558.11 crore in the same period last year.

This growth was primarily driven by the Project Work Services segment, which saw an impressive 78% year-on-year growth, contributing Rs. 409.05 crore to he total revenue. The Telecom Services segment also contributed significantly, with revenues Rs. 334.76 crore, showing a marginal 2% year-on-year increase.

The company’s net profit experienced a rise, climbing by 35.8% to 66.1 crore in Q1 FY26, up from Rs. 48.67 crore in Q1 FY25. Profit before tax (PBT) also increased by 33.73% to Rs. 89.31 crore.

Despite these encouraging figures, a notable concern emerged in the form of contracting operating margins. The EBITDA margin narrowed to 17.96% from 18.87% in the previous year’s corresponding quarter. This indicates that while RailTel’s overall profits and revenues are increasing, rising operating costs or heightened competition may be squeezing profitability per rupee of sales. Total expenses for the quarter jumped by 36.29% to Rs. 672.27 crore, with expenses on projects increasing significantly by 75.5% YoY.

The company’s management stated that the unaudited financial results for the quarter ended 30 June 2025 were reviewed and recommended by the Audit Committee and subsequently approved by the Board of Directors in a meeting held on 28 July 2025. The results were prepared in accordance with Indian Accounting Standards (Ind AS)-34 “Interim Financial Reporting”.

While RailTel’s strategic focus on expanding its service offerings and enhancing network capabilities, including its extensive optical fibre network along railway tracks, continues to drive growth, the shrinking margins present a challenge that the company will need to address in the coming quarters to sustain its positive trajectory.