In reference to our previous communication dated 10th November, 2021 regarding Analyst/Investor Conference Call, we are forwarding herewith the transcript (duly signed by CIRO) of the Conference Call ...
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Listing Department National Stock Exchange of India Limited BSE Limited, Rotunda Building, P l Towers, Dalal Street, Fort, 'Exchange Plaza', C-1, Block G, Mumbai - 400 001 Bandra - Kurla complex, Bandra (E), Mumbai - 400051 Scrip Symbol- RAILTEL
Scrip Code- 543265
corporate Relationship Department,
Sub: Outcome of Analyst/Investor conference.
Dear Sir/Madam,
In referente to our previous tommunitation dated 10th November, 2021 regarding Analyst/Investor Conference Call, we are forwarding herewith the transcript (duly signed by ORO) of the Conference Call held on lstti November, 2021, organised by M/s. IDBI capital Markets & Securities Limited.
2. This is submitted for your information and record.
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RailTel Corporation of India Ltd. (A Government of India Undertaking) CIN: L64202DL2000GOl107905 Registered & Corporate Office: Plate-A, 6th Floor, Office Block, Tower-2, East Kidwai Nagar, New Delhi - 110023 T: +91 11 22900600, F +91 11 22900699 I Website: www.railtelindia.com
"Railtel Corporation of India Limited Q2 FY-22 Earnings Conference Call"
November 15, 2021
MANAGEMENT: SHRI PUNEET CHAWLA- CHAIRMAN & MANAGING
DIRECTOR SHRI SANJAY KUMAR - DIRECTOR (NETWORK PLANNING & MARKETING) SHRI ANAND KUMAR SINGH - DIRECTOR (FINANCE) & CFO
MODERATOR: MR. VISHALPERIWAL-IDBI CAPITAL
Page 1 of 12
Moderator:
Railtel Corporation of India Limited November15, 2021 Ladies and gentlemen, good day and welcome to the Q2 FY22 Earnings Conference Call of
Railtel Corporation hosted by IDBI Capital Market and Services Limited. As a reminder, all
participant lines will be in the listen only mode and there will be an opportunity for you to ask
questions after the presentation concludes. Should you need assistance during the conference
call, please signal an operator by pressing '*' then 'O' on your touchtone phone. Please note that
this conference is being recorded. I now hand the conference over to Mr. Vishal Periwal. Thank
you and over to you Mr. Periwal.
Vishal Periwal:
Yes, thanks Jacob. Good afternoon everyone. Welcome to the post result investment interaction
with the Railtel Corporation management. I would like to thank the management for giving us
this opportunity to host the call and from the management we have with us today Shree Punit
Chawla - Chairman and Managing Director, Shree Sanjay Kumar - Director of Network
Planning and Marketing, Shree Anand Kumar Singh - Director (Finance) and CFO. As usual,
like you know, we will have a brief overview from field research on the business and then we
will open it for Q&A. Yes Sir, over to you.
Puneet Chawla:
Good afternoon everybody. I am very happy to interact with you on the company's good
performance in the backdrop of Q2 results for FY22 which were declared by the company on
11 th November 2021.
Total consolidated income for HI FY22 stood at Rs. 696 crores against Rs. 554 crores in the
corresponding period of previous year, this being an increase of26% year-on-year. EBIT for HI
FY22 stood at Rs. 119 crores and PAT at Rs. 89 crores which was higher by 92% and 94%
respectively on year-on-year basis.
The consolidated revenue registered a growth by 17% quarter-on-quarter, year-on-year growth
in revenue from operations for Q2 ofFY22 has been 27% in comparison to corresponding period
of the previous year. Railtel on a consolidated basis posted profit before tax of Rs. 91 crores in
Q2 of FY22 against Rs. 28 crores in Q 1 of FY22, and profit after tax of Rs. 68 crores in Q2
against Rs. 21 crores in QI ofFY22, thereby registering a substantial growth in both EBIT and
PAT, both on quarter-on-quarter basis and year-on-year basis.
In Q2 FY22, telecom business contributed Rs. 266 crores against Rs. 23 1 crores in Q 1 FY22
and project business contributed Rs. 93 crores against Rs. 76 crores in QI, thereby registering a
growth of 15% and 22% respectively in quarter-on-quarter. EBITDA for Q2 FY22 was Rs. 131
crores against Rs. 67 crores in QI FY22, thereby registering an increase of 96% quarter-on
quarter. EBITDA margin grew from 21 % to 34.4% registering again an increase of 62% quarter
on-quarter. Core EBITDA grew from Rs. 58.38 crores to Rs. 108.5 crores, registering an
increase of 86% quarter-on-quarter and core EBITDA margin increased from 19.03% to 30.27,
showing an increase of 59.02% quarter-on-quarter.
Despite the weak market scenario, Railtel has been getting multiple orders and the current order
books stand at Rs. 5000 er. We have received orders of 626 crores in JCT space, out of 1108
crores worth of orders received since April 2021 alone. We are
amiin!fliri'to;ne-w areas oflCT
Page 2 of 12
Railtel Corporation of India Limited November15, 2021 in the fields of education, health sector, HMIS, artificial intelligence etc. We are also exploring
new work avenues like tunnel radio communication for which already we have bagged projects
at a cost of Rs. 138 crores and the technology we are using is the first to be used in the Indian
Railways. Providing end-to-end solutions by executing connectivity, maintenance, Data Centre
services and network operation centre projects for the defense sector and coal sectors. We are
also working with National Forensic Science University for development of solutions in
strategic sector.
We have also started exploring opportunity in the safe city space. We quoted in one Bangalore
safe city tender, of course we could not be successful in that but then we have started entering
into this field. We also intend to play a crucial role in village connectivity projects of department
of telecommunications by using our 5000 rural broadband PoPs, we have provided wi-fi
services on 6065 railway stations.
We have also registered as a PDOA for the PM-WANI project. Our 6065 wi-fi stations now are
W ANI compliant and we have already developed Railtel wi-fi application which is under
validation with CDOT. For this, we have also signed an MOU with CDOT for delivering
technologies on Make in India, technologies for our network expansion and delivering
equipment to the end users under our rail wire programs.
Railtel intends to play a major role in modernizing train control systems by participation in the
train collision avoidance system of the Indian Railways which has been sanctioned over around
35000 Route kilometers and which will be done on the backbone of a high-speed mobile
communication corridor, which will be set up along the railway tracks on 4G or L TE technology.
To achieve reduction in input cost of bandwidth, we are exploring setting up of cable landing
stations. We also plan to set up 100 edge data centers in Tier-2 and Tier-3 cities on a Public
private partnership model. Thus, this is the way forward and the result we achieved was despite
the second wave ofCOVID in Ql FY22 hitting us hard and the impact lingered on into Q2 also.
In spite of this, the results ofH 1 which shows growth of26% year-on-year are very encouraging.
I, on behalf of Railtel company, acknowledge the faith reposed by the investors and other
stakeholders in the company and would like to reaffirm that in spite of challenges still being
faced by the country in general and the economy in particular, the company is and will continue
to strive to achieve higher benchmarks in the remaining part of the current financial year and in
the years to come. Thank you.
Moderator:
Thank you very much. We will now begin the question-and-answer session. The first question
is from the line of San jay Jain from ICICI Securities. Please go ahead.
Sanjay Jain:
First on the telecom services, phenomenal growth, congratulations. Can you just explain what
is driving this telecom services revenue? Is that the employees coming back to the office, partly
retrieving the usage and the revenue or we have booked any large revenue this quarter, and what
is the sustainable growth for the second half of this year? Will this number of260 crores, can it
go up further per quarter in the next two quarters of this fiscal y
Page 3 of 12
' '26le.e1 RAILTEL
Puneet Chawla:
Railtel Corporation of India Limited November15, 2021 The emphasis on digitalization today has gone up like it was never before. The stress on working
from home, working from remote locations has taken the demand of the telecom services to next
level. The broadband services which Railtel has, now in HI they have grown by 57%. Now, this
is basically due to people, students working from home, the demand and now once this
phenomenon has started it will continue. Similarly, health sector, people are increasingly using
tele consultations and these will continue to grow. Then, now the companies have started making
their own private network which has taken the demand of national long distance to new level
i.e., it has increased very much. In Q2, the demand as compared to QI, our increase was higher
by 15% in this sector and this will further grow. Already we are executing projects from coal
subsidiaries, so our virtual private network which we will develop for them that will increase
the revenue in the coming quarters. Thirdly, for the infrastructure provided, as I told you in my
opening remarks, we are going to execute for Indian Railways, a high speed-communication
corridor along the railway tracks which will serve their communications needs and their safety
requirements. Now, this will entail setting up of towers at almost all the railway stations. Today,
we have got 1100 towers. Now, we will be constructing around 5000 more towers. So, one
tenancy will be used for the Railways, rest of the two tenancies will be used to give out space
for the other telecom service providers which will be providing the 5G services in the near future.
So, all the sectors are bound to show a growth in the coming quarters and next year.
Sanjay Jain:
Fair enough, Sir. I got the point but can you just give us what was the growth for NLD, then
internet service ISP and the infrastructure for this quarter on a YOY basis?
Puneet Chawla:
This quarter, it was, okay you want year-on-year basis? Okay.
Sanjay Jain:
Year on year basis for all the three segments.
Puneet Chawla:
Yes, year-on-year basis, of HI.
Sanjay Jain:
No, not HI, it is ofQ2.
Puneet Chawla:
Yes, this was of HI actually, ifwe see HI it was ISP was 57%, IT was 26% and NDL was 5%.
The Q2 figures as compared to last year, they have also shown an increase.
Sanjay Jain:
Not that is okay, HI is good enough I will take it afterwards. Now, on the project business, we
have an order book of 5000 crore. It was 4000 crore last quarter, so are we telling that after
executing I 00 crores we have added another I 000 so that means this quarter we had a gross
addition of 1100 crores of order book. Is that understanding correct? And second one is ...
Puneet Chawla:
1100 is in the first two quarters starting from April till now.
Sanjay Jain:
No, in the last quarter you told that order book is of 4000.
Puneet Chawla:
Rs.4000 er. In the beginning of the F.Y ..
Sanjay Jain:
Got it, got it, got it. And the second related question is despite having such a .....
Puneet Chawla:
Just a minute, 4000 when we had gone in for the IPO last year. At that time we have ....
Page 4 of 12
Sanjay Jain:
Railtel Corporation of India Limited November15, 2021 Okay, got it. Just on the execution side, despite having such a large order book and as you
mentioned last time this order book is executed at a three years to four-year max, why the
quarterly run rate on the project business is still only 100 crores?
Puneet Chawla:
See, because the first two quarters, as I told you, that in the first quarter we were impacted badly
by COVID but if you see in the next quarter we had improved, in the second quarter of the year
we have improved as far as the project execution is concerned. First quarter was very very very
bad, you all know that thing.
Sanjay Jain:
No, even in the second quarter the revenue is only 92 crores.
Puneet Chawla:
The total, Yes you are right. Second quarter was 93 or so ...
Sanjay Jain:
92.7 crores, last quarter was 76 crores. The run rate looks significantly lower compared to a
5000-crore order book. If I say it is executable over four years that means on annual basis we
should be doing 1250 crores of order execution?
Puneet Chawla:
Yes, this is improving and that is how our overall turnover is also improving. Now, I expect
much better execution of projects in these two, I mean, quarters and we will be expecting an
overall growth of about 25%.
Sanjay Jain:
Overall growth means at the company level is expected at 25% growth in the second half?
Puneet Chawla:
Around, Yes around, I mean, complete for the full year.
Sanjay Jain:
So, for the full year we will still achieve a 25% growth, that means second half is going to be
substantially strong?
Puneet Chawla:
Yes, second half will be substantially strong.
Sanjay Jain:
Because in the first half ....
Puneet Chawla:
The project execution we will see an upward swing in these two quarters in the coming quarters.
Sanjay Jain:
Got it, got it, got it. Second question is on the COD part, is it COD completely out or we will be
rebidding for the new vendor to execute the COD project? How should we see the COD and the
revenue of 60 crores we were anticipating in the concerned COD?
Puneet Chawla:
Immediately, we will be going in for retendering this thing. This agency has failed but now we
will be retendering and then again it will come up and who knows it may be more than this. Let
us see.
Sanjay Jain:
Sir, it will be done this fiscal year itself?
Puneet Chawla:
Yes, we will be finalizing this agency within this year itself.
Sanjay Jain:
Got it, got it. Some bookkeeping question, if you can just help us, one on the admin cost which
was 6.2 crores this quarter you said that they were like ECL reversal of 15 crores. How should
we see this because it has been quite volatile? What is the quarterly or an annual admin expenses
we should look at?
Puneet Chawla:
My Director Finance will answer this question. He is here only.
Page 5 of 12
tcleM RAILTEL
Anand Kumar Singh:
Railtel Corporation of India Limited November15, 2021 ECL reversal of 14 crores in the second quarter it is from the rationalization of the calculation
of the ECL. Our debtors as on 31 st March 2021 was 886 crores, balance of debtors out of 886 er.
as on date stands at around 516 crores. We are in the process of realizing our debtors also and
due to the COVID impact, the payment position from the clients was a bit tight but we are
actively pursuing for realization and going forward with the rationalization the calculation of
ECL we do not see any substantial increase in the ECL positioning.
Sanjay Singh:
So, what should be the steady state admin expenses, 23 crores? 20 crores per quarter admin cost?
Anand Kumar Sing:
Admin cost 20 Cr., Yes.
Puneet Chawla:
Yes, 20 crores per quarter.
Anand Kumar Sing:
Yes, around that figure, yes.
Sanjay Jain:
And why was other income so high this quarter, 22.6 crore?
Anand Kumar Singh:
See with the reversal, there was a negative in the expenditure side, as per presentation aspect
any negative on the presentation has been taken to other income, so that negative portion in the
second quarter was taken to the other income.
Sanjay Jain:
So, this reversal of ECL was taken to the other income?
Anand Kumar Singh:
After reversal, the administrative and other expenses came on a negative figure.
Sanjay Jain:
Correct.
Anand Kumar Singh:
So that figure was added to the other income because as per the presentation requirement we
cannot show negative in the expenditure side.
Sanjay Jain:
Oh, got it, got it, got it. And there is a considerable increase in the working capital in the first. If
I look at the cash flows, there is 200 crores of working capital outflow out of which there is a
financial non-current asset which has taken out close to 140 crore. Can you just explain what is
the nature of that outflow? Cash flow, cash flow. Change in the working capital?
Anand Kumar Singh:
I will come back on this after some time. You can proceed.
Sanjay Jain:
One last question on the CAPEX side. We have done 60 crores in the first half. The CAPEX
spend. How should we see the CAPEX spend for the full year?
Anand Kumar Singh:
Yes, for the full year also it will be the same, I mean more so we can be around 120 to 125 for
the full year.
Sanjay Jain:
And where are you spending these 100 to 125 crore?
Anand Kumar Singh:
On building up of our network, expansion of the network, and on our data center.
Sanjay Jain:
Data center and the network. Got it. One last question from my side. I will come back in the
queue for further. Why there was a lower margin, EBIT margin in the project business, it was a
mid-single digit?
Page 6 of 12
Anand Kumar Singh:
Railtel Corporation of India Limited November15, 2021 The lower margin in the project business was certainly due to the transition of the COD, COD
income so they have not made the payments and we only recognized around 1.53 crores of COD
profit in Q2 against 15 crores which was recognized in Qt.
Sanjay Jain:
No, but even then, if I do not take it the margin is only 5. 7%. It does not come in revenue; it
does not come in EBIT. But why is the margin of the reported number lower?
Anand Kumar Singh:
See ifl look at it this way ....
Sanjay Jain:
Is there any reversal this quarter?
Anand Kumar Singh:
No, you see the project profit actually is 5.7 as you say because the COD impact is again to the
bottom line, so since there was no COD income in the second quarter it was only to the tune of
1.53 it has showed an impact.
Sanjay Jain:
I got that Anand sir, I am just saying if you remove that, last quarter it was 22%. I am not looking
at 22% but the steady straight margin I thought was somewhere around 10%, right?
Anand Kumar Singh:
The margin from Railway is around 8.5%,. Due to the slow progress in the first quarter, we
hope to see this percentage profit increasing going forward.
Moderator:
Urmil Shah:
The next question is from the line ofUrmil Shah from Haitong Securities. Please go ahead.
Sir,just a follow up on the COD project. So, ifwe expect the tendering and awarding to the new
service provider to be completed by end of this financial year, what should be the timeline
wherein we should be expecting it to be operationalized and you know we booking revenue and
earnings for the same?
Puneet Chawla:
No, from next financial year onwards, from Ql onwards because as soon as we award the
contract he is supposed to pay.
Urmil Shah:
Sir and you mentioned that the COD project can potentially have an upside from you know about
63 crore of annual run rate which was in the earlier project. So, what are the kind of changes
etc., we plan to bring in in the project so that it can you know provide you know a better
realization than the previous tender?
Puneet Chawla:
Not much substantial changes but then since it is a thing which will be basically revolutionary
and I mean people should be excited about it. I expect that we should get a good response.
Urmil Shah:
So largely because at the marketplace, you know, the impact of the pandemic reducing that
should help us you know do well?
Puneet Chawla:
Yes, that should help us.
Urmil Shah:
Sir, and if I look at the 57% YOY growth you have shown in ISP, if we have to break it down
between you know the subscriber growth and ARPU it would be good if you could help us
understand that?
Page 7 of 12
Puneet Chawla:
Railtel Corporation of India Limited November15, 2021 See, subscriber growth has been basically if I compare it with last year HI of last year, to this
year, I mean it will be about 75% growth and ARPU is around Rs. 500. Our subscribers stands
at 4.22 lakhs.
Urmil Shah:
Sir, and we had talked about you know expanding our network, the in-city network, so that we
can drive more growth in the ISP side. If you could give an update and the roadmap for the same
for FY22 that would be helpful.
Puneet Chawla:
Yes, we are already in the process of doing that. Wherever we are feeling congestion is there or
wherever demand for services has increased, so then we are basically going in for modernization
and expansion of the network. As I told earlier, as we have already spent 60 crores in the first
half of the year and in the full year around 125 crores CAPEX we are likely to spend on these
services, modernization, and expansion of services.
Urmil Shah:
Sure. Sir, maybe I will try rephrasing the question. So, it we look at the 75% growth which we
are seeing, how much they would have come within the existing network and how much would
or you know is it all from the existing network and the benefit of network addition is yet to come
in?
Puneet Chawla:
Yes, benefit of network addition is certainly yet to come in because these subscribers we could
not have joined if we had no capacities. Now, we are building capacities, in fact doubling our
capacity or increasing them multifold times for which we are already in the advanced stage of
finalizing our tenders, so this will further we want to grow by 20 times in the next two years'
time because we, as I told you, we are already having a lot of scope, a lot of demand. Department
of Telecommunication is talking to us. They want us to provide broadband services to the
villages, near the railway stations which will be very convenient for us to extend and then we
are also in talks with them for providing these services in some states, two states. So, anticipating
all this we are expanding and modernizing our network.
Urmil Shah:
Sure. Sir, my last question is on the train anticollision system project. What is the update and
how reasonable it would be to expect some awarding of the project to happen by end of this
year?
Puneet Chawla:
Yes, end of the year, I mean, we should be able to get one or two sections awarded and we
should be able to get one or two sections by the end of the year, and that is what I am expecting.
One section will roughly be around 200 crores, so by the end of the year I expect that one to two
sections we will get, and then this will continue in the further years to come because this is a
project which Indian Railways has to complete in the next coming five to six years or so. The
35000 Km what they have sanctioned.
Urmil Shah:
Sure. Sir, and should we expect ramp up of this project overall, not for us but on an overall basis
if the rollout of35000 km of high-speed network is expected to be completed in let us say you
know 10 years or so, when is that we should expect the ramp up to see a strong momentum
because ....
Page 8 of 12
Puneet Chawla:
Railtel Corporation of India Limited November15, 2021 From next year, it will certainly be ramped up because this year Indian Railways has finalized
this tender documents etc., the EPC documents, the conditions for that etc., so they have now
standardized. They have now floated the tender for the first few sections and this process will
now gain pace in the next coming year, next financial year.
Urmil Shah:
Sir for 35000 km, the opportunity size is around 25000 crores, right?
Puneet Chawla:
No, for 35000 km the total is 7000 or so, 8000 roughly, 7000 to 8000. That, of course, will
depend upon how much is the prices at which the tender was finalized. Out of that, we should
get something, I mean we should get quite something. We are well positioned for that.
Moderator:
Thank you. The next question is from the line of Ganeshram Rajagopalan from Ksema Wealth.
Ganeshram Rajagopalan: Sir I just have a basic question I will start off with. As I am looking at your segment wise revenue
and results and some telecom services on a standalone basis, it has jumped from about 230 crores
to 265 crores, about 13% jump, but on the same revenue base your profits in your results has
jumped from 39 crores to 69 crores, so that is about a 75%jump. So, in terms of margins, it has
almost doubled, right? So, any explanation as to what is driving that and how you see that going
forward?
Puneet Chawla:
See, the telecom services which we offer around the existing network we do not have to invest
much on that except our last mile what we have built it. So as somebody else also asked whether
you had given the services on the existing network, so yes that is right. So, with the growth in
demand, our existing network still has capacity on which we can build the new services and the
last mile etc. we have to provide. So that is the reason.
Ganeshram Rajagopalan: So, just to clarify, I understand that you know you are able to generate more revenue out of the
assets you know because of the increase in demand, so that explains the jump from 230 crores
to 265 crores. My question is more about the profit you are making from this revenue, right?
That has jumped up by you know it has jumped up by 75%, so the profit that you are extracting
from this increased demand seems to have jumped up. So, in terms of margin expansion that has
gone from 13% to 26% standalone basis. So, that is the part that I am not able to quite reconcile.
If you could help me with that?
Puneet Chawla:
See that is what I am saying. With the same existing resources, be it our manpower, be it our
network, with an increase of delta x we are able to generate more.
Ganeshram Rajagopalan: That makes a lot more sense. So, going forward, we do think that this kind of margin is
sustainable or do you think we could expect more expansion in that sense?
Puneet Chawla:
This certainly is sustainable, like once we invest 125 crores in our expansion program, so this is
sustainable, this growth is sustainable. The growth has to come. It is inescapable. With the thirst
thrust on digitization, this expansion has to come. This growth has to come.
Ganeshram Rajagopalan: So, this is just to understand more from a business sense. So, the second question is when we
invest in the broadband towers across the railway network, right so the CAPEX is sanctioned
sort of by the Railways and we sort of carry the asset on our bal
t?
Page 9 of 12
Puneet Chawla:
Railtel Corporation of India Limited November15, 2021 No, assets are given to us for maintenance and revenue what we get out of marketing that 7%
we share with the Railways. We keep with us and spend on the maintenance and the upkeep of
those assets.
Ganeshram Rajagopalan: Alright, alright. So, the actual asset and the CAPEX is not on our balance sheet. It is mainly on
the Railways. It is more like sort of .....
Puneet Chawla:
For new towers, CAPEX will be borne by them because Railways requires these new towers for
the high-speed mobile communication corridors which they have to build. One tenancy will be
used for the Railways, rest of the two tenancies we will give to other operators.
Ganesh ram Rajagopalan: Sir. And this is just a housekeeping question that in the previous conference, all I think you had
targeted about 2000 crores in revenue for this year and based on one of the previous answers
you gave just a back of the envelop calculation 25% growth that you are expecting, that is about
1700 crores, so on the project front is everything looking strong or is there something that could
reconcile that difference in expectation?
Puneet Chawla:
I think we did not specifically say 2000. It was always 25% to 30% only. So, between 1700 to
1800 we are confident of achieving this year also.
Moderator:
Thank you. The next question is from the line of Vishal Periwal from IDBI Capital. Please go
ahead.
Vishal Periwal:
So, in project businesses can you give clarity, like you know 5000 crore orders and key orders
that we have in this segment that will be helpful?
Puneet Chawla:
Key orders, 5000 which we already have.
Vishal Periwal:
Yes, Sir. I mean you know key order of may be main orders that will drive the growth for this
company.
Puneet Chawla:
Main orders what we are going to execute are this CCTV project for the Railways which is about
1000 crores for the project on the stations. Thai is one big project. Then, we have got orders
from the coal subsidiaries, which are around 700 crores as on date, out of which some portion
we have already executed. Then, we have got orders from defense which are around 400 crores
and then these tunnel communication orders 130 crores we have already got from various
organizations including Railways and other public sector undertakings. So, these are some of
the main projects which we are currently executing.
Vishal Periwal:
On this train anticollision system, which you mentioned, so is this I mean like you know when
you say 200 crore per section will be awarded ....
Puneet Chawla:
That is, I mean, you should not quote that it is 200, it can be more also. It can be a smaller section
can be less also and just a ballpark figure what I have told you on the section.
Vishal Periwal:
But this order is part of our order book or how one should see this?
Puneet Chawla:
No, this is not part of the order book yet. This is I had just projected that we are eyeing some
sections here and that is my projection.
Page 10 of 12
Mce1 RA LTEL
Vishal Periwal:
Railtel Corporation of India Limited November15, 2021 And you have given a color on the ARPU for the quarter at around Rs. 500. What was the number
for, I mean, taking the first quarter of this year or maybe year-on-year number if you can give
clarity? This is to get a perspective like you know how exactly the competitive intensity of the
ARPUs in the internet side will be operational. Are they increasing or are they stable?
Puneet Chawla:
They are decreasing somewhat. It was a bit more about 550 or so earlier, 575 about one to one
and a half years back. That is, of course, it has come down a bit. But then it is compensated by
the volumes. It was 575 when our subscribers were 1.2 lakhs. I mean, now it is 4.22 lakhs and
we are further increasing that, targeting to increase by 20 times in two years' time. So, that of
course probably will come down but that will be more than compensated by the increase in
volumes. And to ensure that our input cost goes down, we have made some tie ups. We have
signed an MOU with CDOT, so that we can deploy equipment at a lower cost, Make in India
equipment and deploy them at a lower cost.
Vishal Periwal:
Okay, and then a last thing from me. Some time back, ministry of Railways had issued an order
you know where in the PSUs I mean like way of doing work which is like you know nomination
way of doing work, it may not be there. Everything has to be competitive, bidding, and private
players again they can be party to it. So, in this way then are we having any thought process like
you know may be like you know going that we want to have a JD partner in a private side
wherein you both can do bidding or you still feel like you know on a competitive basis you can
bid and then further look for a vendor who can execute the work?
Puneet Chawla:
See, it is like this. The circular you are talking about is for bidding between the public sector
unit. That is for award of the project's, bidding amongst the public sector unit. It does not speak
of the works which have been awarded to us on nomination and/or which cannot be awarded on
nomination. It does not speak of that. It is just of the tendering between the companies, between
the public sector companies. So, it is only I mean stopping that.
Vishal Periwal:
Okay, so which means private players will be participating in the bid directly. Is it the correct
understanding?
Puneet Chawla:
Yes, they can participate in the bid which they decide not to give on nomination. That is still
happening. That was happening also prior to this.
Moderator:
Thank you. The next question is from the line ofUrmil Shah from Haitong Securities. Please go
ahead.
Urmil Shah:
Sir, I just needed more clarity on the train anticollision system. I just pulled up the Q4 FY2l,
you know, earnings call and there we had indicated that you know that is likely to be a total
opportunity of 25000 crores for 35000 you know route kilometers and now it appears to have
come down to between 7000 to 10000 crores. If you could explain what has been the change,
that would be helpful Sir?
Puneet Chawla:
Change in the sense?
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Urmil Shah:
Railtel Corporation of India Limited November15, 2021 Sir, what has resulted in the 25000-crore opportunity to come down to 7000 to 8000 crore? There
would be you know some changes?
Puneet Chawla:
No, 25000 crore is the total estimated cost of the project. So, I am saying that in the long run we
will get something out of it. Out of the 25000, it will not happen in one year time or so, but we
will get something out of it. That could be around 7000 or something like that which we should
get something out of it.
Urmil Shah:
So, did I understand it correct Sir? We potentially can get between 7000 to 8000 crores over the
longterm.
Puneet Chawla:
Over the years to come, I mean with the project which should be I mean you can say 20% to
35% of the total thing.
Urmil Shah;
The opportunity remains 25000 crore and potentially, I mean, nothing is 100% sure but
potentially we can get 7000 to 8000 crores?
Puneet Chawla:
Of course, not I 00% sure but then something we should be able to get.
Moderator:
Thank you. As there are no further questions, we would conclude the call. On behalf of IDBI
Capital and Services Limited, we thank you for joining in this call. You may now disconnect
your lines.
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