ICRA reaffirms ratings of Railtel Corporation at 'AA/A1+' with 'stable' outlook

Railtel Corporation of India said that the credit rating agency ICRA has reaffirmed the company's long-term rating at '[ICRA] AA' with 'stable' outlook.

The agency has also affirmed the companys short-term rating at ICRA] A1+.

ICRA stated that the reaffirmation of ratings considers Railtels long track record (over 20 years) of operations in the telecom infrastructure space. In addition, it has executed critical projects of national importance such as BharatNet, National Knowledge Network (NKN) and railway signalling, among others.

The ratings continue to factor in Railtels strong parentage, with the majority ownership by the Government of India (GoI) under the Ministry of Railways (MoR). This strong parentage enables the company to execute all connectivity-related projects of the Indian Railways and secure business from other public-sector undertakings (PSUs).

The ratings factor in the healthy growth in the operating income (OI)and the sustenance of its strong financial risk profile, supported by zero debt and a healthy liquidity position. ICRA expects the company to continue demonstrating significant growth in OI, aided by its robust order book position of Rs. 8,600 crore as of January 2026.

ICRA continues to consider Railtels strong liquidity position, bolstered by its sizeable cash and liquid investments (including fixed deposits) of Rs 319 crore as on 30 September 2025. Further, Railtel maintains healthy financial flexibility with a conservative capital structure.

The ratings, however, are constrained by the expected moderation in the companys operating profit margins (OPM) due to a growing proportion of the project segment which has lower margins compared to telecom segment. However, its cash flow generation is anticipated to remain healthy, translating into a comfortable credit profile.

The ratings also factor in the companys obligations to pay dividends to the GoI, which might impact its liquidity position.

Railtel Corporation of India is a "Mini Ratna (Category-I) public sector undertaking which owns a pan India optic fibre network to provide broadband and multimedia network in all parts of the country along with modernisation and maintenance of railway network.

The scrip had gained 1.14% to end at Rs 333.25 on the BSE today.

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