RailTel Eyes International Opportunities After Navratna Tag

RailTel Corp. has started the groundwork for setting up international business after securing Navratna status from the government, according to the company's Chairman and Managing Director, Sanjai Kumar.

The government classifies public sector undertakings into three categories—Maharatna, Navratna, and Miniratna. Navratna status is granted to companies previously classified as Miniratna Category I for outstanding financial and market performance.

Kumar told NDTV Profit that the Navratna status will give RailTel an edge in the market and send a positive message to its investors, purchasers, and customers.

In addition to exploring business opportunities internationally, the status upgrade includes a host of other benefits for RailTel. 

“We can make more investments when we compare with the previous status. We can now open offices abroad as well. We have recently started some foreign business efforts,” he said.

The RailTel chairman said that the company will be setting up offices internationally as and when opportunities arise. 

“As we get business opportunities in countries where we want to explore the markets, we will not have to wait for any approval from higher authorities,” he said.

As a result of the Navratna status, the corporation will no longer require prior government approvals for capital expenditures of up to Rs 1,000 crore.

“More capital expenditure will certainly be required compared to previous financial years and we will utilise this facility as and when the need arises,” Kumar said. 

While predicting performance for the ongoing financial year, Kumar expressed confidence in improving margins.

“Margins from projects are going to remain close to 5–6% overall. When we talk about telecom business, our Ebitda margin will be 30% plus and that is where we are going to continue,” Kumar noted.

Kumar expects RailTel to enter the next financial year with an order book of around Rs 5,000 crore, adding a significant number in the remaining part of the fiscal. 

“We are expecting that around Rs 1,900 to Rs 2,000 crore worth of the order book will be converted into revenue. We also expect to add new orders worth Rs 2,000 to Rs 2,500 crore this financial year,” he said.