RailTel Corporation is eyeing new partners as it prepares to bid for tenders being rolled out by the Railways for the deployment of Kavach —the anti-collision system.
The Railway PSE, which provides broadband and VPN services, is already partnering with Quadrant, a Kavach OEM. Quadrant’s products are currently in the testing stage and awaiting approvals.
The company will explore “more partnerships” with other OEMs, in which RailTel can act as a system integrator by bidding for projects and rolling out the automatic train protection system.
Bids are likely to be placed for ongoing routes such as Delhi-Mumbai and Delhi-Howrah/Kolkata, said Sanjai Kumar, CMD of RailTel, during a recent analyst call.
At present, the Railways has three Kavach OEMs—Medha, HBL Power and Kernex. Two more, Quadrant and Digitronics, are awaiting product approvals, which are likely in “a month or two,” sources told businessline. A few other vendors have also approached the Railways with proof-of-concept and are carrying out product testing.
“We will look for alternative partners (apart from Quadrant) who already have the product…. Some of them are already present. Kavach tenders have been floated by the South Central Railways, and we will bid for those,” Kumar said.
“Our role will be that of a system integrator,” he added.
Initial installation will be in Ultra High Frequency (UHF) and later upgraded to LTE technology.
Brokerage firm ICICI Securities, in a recent report, said RailTel is developing another version of Kavach with LTE, which will be rolled out later.
The Railway PSE is hopeful that Kavach tenders will add close to ₹4,000-5,000 crore to its order book and provide 8-10 per cent boost to its EBIT (earnings before interest and tax) margins.
“We aim for a 20-22 percent market share with the Kavach rollout,” Kumar said.
Edge Data Centres
RailTel has also completed tendering for setting up edge data centres. In the first phase, 102 edge data centres will be rolled out. The tender was won by Techno Electric & Engineering Company.
Kumar said Techno will incur the entire capex (capital expenditure) for setting up the data centres, while RailTel will receive a commission of 12-13 per cent of the revenue and act as a marketing partner and provide technical support. The Railways will receive lease payments for providing space for these data centres—typically a 10x10 room.
RailTel is also eyeing opportunities to cross-sell connectivity services and envisions executing 5-10 data centres in FY25.
The Video Surveillance System (VSS) awarded under the Nirbhaya Fund for railway stations had previously slowed due to unclear camera specifications. However, the issue has now been resolved. Partial execution has been completed at around 300 stations, and “execution should pick up pace shortly.”
Guidance
According to Kumar, the company has earmarked a capex of around ₹250 crore and is expecting a 25-30 percent growth in revenue for the ongoing fiscal year. The PAT (profit after tax) is likely to grow by around 10 per cent.
Its existing order book is at around ₹4,800 crore, which includes 22 per cent from Railways projects and the remaining 78 per cent from non-Railways projects.