PSU Stock Trading Ex-Dividend Today, ICICI Securities Says "Buy" For 33% Upside

ICICI Securities has a "Buy" on Railtel Corporation of India Ltd for a decent return of up to 33% with a target price of Rs 145 apiece. The stock declared an Interim Dividend for FY23. It is a small-cap PSU Miniratna Stock that operates in the Telecommunication sector. It has a market capitalisation of Rs 3,498.23 crore.

Railtel Corporation of India Stock Performance & Dividend History

The shares of the Railtel Corporation of India last traded at Rs 109 apiece on NSE. The stock has fallen 0.50% as compared to its previous close of Rs 109.55 apiece. The stock made its debut on the exchange on 26 February 2021. It has fallen 10.18% since the date of listing. In a week it has fallen 9.51%. In 1 month it fell 13.53%. In 1 year it fell 4.34%.

It recorded 52-week high on 28 November 2022 at Rs 148.70 apiece and 52-week on 31 March 2022 at Rs 84 apiece, respectively. Since March 2021, the stock has declared 5 Dividends, which include 2 Final Dividends and 3 Interim Dividends.

Railtel Corporation of India Dividend

The company in an exchange filing on January 31, 2023, said, "Pursuant to Regulation 30 and 42 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Board of Directors has declared the interim dividend of FY 2022-23 at the rate of 15% of paidup share capital (Rs. 1.50 per share). Further, the Board of Directors has also approved Wednesday, 08th February, 2023 as the "Record Date" for the purpose of payment of interim dividend of FY 2022- 23."

ICICI Securities Suggest "Buy" For Rs 145 target price

Railtel Corporation of India's (Railtel) Q3FY23 EBITDA grew 5% YoY to Rs0.7bn and was impacted by ECL provision of Rs210mn. Telecom services revenue growth has been healthy at 16% YoY; however, company has reduced EBIT margin guidance for telecom services to 20-25% (earlier: 25-28%). Project revenue was disappointing at Rs4bn for 9MFY23 (vs guidance of Rs10bn for FY23), and was impacted by lower chip availability. It expects to book Rs4bn of revenue from projects in Q4FY23. Railtel has seen increased competitive intensity in project business, both from government entities and private companies. Therefore, Railtel has shifted its strategy from chasing margin-based contracts to volume based which can help in growing absolute EBIT in projects business. The company has cut project business EBIT margin guidance to 7- 8%. We have cut our EPS estimates by 14% for FY23 and 5% for FY24 and target price to Rs145 (earlier: Rs160) as we rollover valuations to FY25E, but reduce PE multiples to 15x (from 17x). Maintain BUY.

Disclaimer

The stock has been picked from the brokerage report of ICICI Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.