Railtel stock price may reach Rs 185 in one-year time frame

RailTel is a Mini Ratna Central Public Sector Enterprise and one of the largest neutral telecom infrastructure providers in the country owning a Pan-India optic fibre network along the Railway track. The network covers all important towns & cities of the country and several rural areas. The company was incorporated on September 26, 2000 with the aim of modernizing the existing telecom system for train control, operation and safety and to generate additional revenues by creating nationwide broadband and multimedia network, laying optical fiber cable using the right of way along railway tracks. Currently, the optic fiber network of RailTel covers over 58,742 route kilometers and covers 5,848 railway stations across towns and cities in India. RailTel has a strategic relationship with the Indian Railways and it undertakes a wide variety of projects including provision of mission critical connectivity services such as video surveillance system at stations and within trains, ‘e-Office’ services and implementing short haul connectivity between stations and long haul connectivity to support various organizations within the Indian Railways. The company also undertakes various passenger services including content on demand services and Wi-Fi across major railway stations in India. The company believes that their experience and expertise in handling and undertaking telecom and ICT projects has led them to be selected for implementation of various mission-mode projects for the Government of India including rolling out the National Knowledge Network, Bharat Net (formerly, the National Optical Fiber Network) and USOF funded optical fibre based connectivity project in the North East India.
RailTel started providing the free public Wi-Fi service at Indian railway station with a vision of turning Railway stations into a platform for Digital inclusion. RailTel has provided high speed Wi-Fi at 985 stations associating Google as the Technology partner. In the next phase, the company has roped in Tata Trust for providing Wi-Fi at remaining B, C, D and E category stations across the country. The idea behind providing free Wi-Fi to these very small stations catering to mainly rural/low population density areas is to provide the people with state of the art Wi-Fi facility. Easy and low-cost availability of Smart phones in the market coupled with free Wi-Fi at railway stations in rural area will go a long way in the digital growth for rural India. While private operators find it hard to create telecom infrastructure in rural areas due to high CAPEX involved, RailTel is penetrating the hinterland of the country to bring state-of-the-art telecom infra for the rural population bridging the digital divide of urban and rural India. As a disclaimer, it is worth mentioning that the data accumulated above has been taken from the Railtel website and other research reports. The Railtel stock currently quoting at Rs 130 is a safe portfolio buy with a price appreciation target of Rs 185 in one-year time frame.
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.