Railtel Corporation Of India Ltd

File No. RC~~FIN(MISC)/2/2024-0/o Addi. 341164/2024/0, \ GM/Finance/CO;RCIL (Computer No. 42676) Rui/Tel Co1yJOrulio11 of India Limited ~ Vishal Pcriw11I:

Ladies and gentlemen, good day and welcome to RailTel Corporation Q4 FY24 Post Results Earnings Conference Call. As a reminder, all participant lines will be in listen-only mode and there will be an opportunity for you to ask questions _after the presentation concludes. Should you need assistance during the con f'crence call, please signal an operator by pressing star then Lero on your touch-tone phone. Please note that this conference is being recorded.

I now hand the conference over to Mr. Vishal Pcriwal from IDBI Capital. Thank you and over to you, sir.

Yes, thanks Sejal. Good al\emoon everyone and welcome to RailTel's Post Results Earnings Call for Q4 and FY24. First of all, I'd like to thank the management for giving us this opportunity lo host their call and the dais, today's dais is graced by Shri Sanjai Kurnurji, who is the Chairman and Managing Director, Shri V. Rama Manohar Rauji, Director Finance, Sllri Manoj Tandonji, Director Projects O&M, and Shri Ynshpal Singh Tomarji, who is the Director of Network Planning and Marketing. So as usual, we'll have a brief overview from the management on the gone-by quarter and then we'll line open for Q&A. Yes, Sanjay sir, over to you.

Thank you Mr. Pcriwal and greetings to everyone. A very good atlernoon to all investors. It gives me great pleasure to interact with you on the company's performance in lhe backdrop of Q4 and yearly audited financial results of the company for FY2023-24, which were declared by the company on 2nd May 2024.

The company achieved total revenue of INR852 crores for Q4 as against INR675 crores in Q3 ofFY24 and fNR707 crores in Q4 of FY23, registering a sequential growth of26% quartcr-on- qunrtcr and 21 % year-on-year basis. The opcmting revenue of the company for Q4 is fNR833 erores as against INR668 erores in Q3 ofFY24 and fNR697 crores in Q4 ofFY23, registering a growth of 25% QoQ and 20% year-on-year basis. The telecom segment contributed INR336 crores and project segment contributed INR496 crores in company's operating turnover in Q4.

The profit before tax in Q4 of FY24 is fNR I 02 crores as against INR84 crores in Q3 of FY24, registering a growth of 2 1 % QoQ basis. The company posted profit afler tax of INR 78 crorcs in Q4 ofFY24 as against INR62 crores in Q3 ofFY24, registering a growth of26% QoQ basis.

EBITDA for Q4 ofFY24 is fNRl45 crores as against Q3 of FY24 of fNRl25 crores, thus registering a growth of 16% QoQ. For the year ended 31-03-2024, the company achieved a total income of INR2,622 crores and a total PAT of fNR246 crores, registering a 31% growth respectively in both parameters in turnover as well as profit as compared to the last year. I would also like to share about two important events which happened recently.

One is that we have recently finalised an MOU with Quadrant Future Tech Ltd, forging an exclusive partnership for aggressively participating in KA VACI-I tenders, which was await eel by our investors for quite some time. Quadrant Future Tech Ltd is under the process of final approval by ROSO as an OEM for KA VACII product. Combining this with our in-house expertise, we arc committed to contribute in the journey of Indian railways for implementation of indigenous safety systems like KAVACH and will also explore to prolifernte the KAVA Cl I technology abroad as well. Page 2 of 13 2 Generated from eOffice by HARISH CHANDRA BATRA, GM/FINANCE/CO/RCIL/HC. GM/FINANCE/CO/RCIL. Corporate Office on 09/05/2024 04:40 pm

File No. RC~1}£FIN(MISC)/2/2024-0/o Addi. \ 1 · GM1Finance1C01RCIL GM/Finance/CO;RCIL (Computer No. 42676) Rai/Tel Co1poratio11 of India limited ~ The second event, which is also significant, is that with the support of Indian I ligh Commission in South Africa, we have signed a tripartite MOU with lnoviTel and Tsiko Africa Energy and Infrastructure for Tsiko Group. In this collaboration, we arc exploring oppo1tunities in telecom, railways and other JT/ICT busin<!sses in South Africa and the adjoining areas. This is a leap forward for us lo take Rai!Tcl 's services beyond the border.

We express our profound gratitude for the trust bestowed upon us by our investors and stakeholders whose unwavering support propels us to our continual ascent. Jai I !ind. Thank you.

Thank you very much. We will now begin the question and answer session. The first question is from the line ofSanjesh Jain from ICICI Securities. Please go ahead.

Good afternoon, sir. Thanks for taking my question. I got a few of them. First, can you help us with the order book which we have as oa 31st March? And number two, what is the expectation of order book for our FY25, both from railway and non-railway segment? And related questions would be on the KA VACI-I now that we have signed an MOU. Can you help us understand how does RailTel fits in this ecosystem? And what is tbe margin from that particular project? And what is the size of incremental order we are looking from that MOU which we have signed?

Thank you, Sanjesh ji. Thank you, ICICI. Thank you for being with us continuously since our listing. So our current order book size is arow1d 4700 crores. And out of this, we expect to implement and eonve1t into revenue is around 2000 odd crores this year. So that is the second question. And third one is related to KA V ACH. So KA V ACII, we have been, I think, answering this question for quite some time that what we are doing in KAVACH. So l have always infonncd the respected investors that we arc on the job.

And now we have found, we have completed the first step towards it and that we have signed an MOU with a new entrant in this area. They are an old company already working in railway sector. So now they have developed this product, KA VACI-I, which is compliant not only to the existing deployment specifications, but lo the latest standards, which are 4G complied.

So the earlier KA V ACH product was not 4G complied. So this new product is 4G complied already. And the POC Testing is underway. And we have already decided to associate with them from this stage. I am not really aware, but we are expecting that in next may be two to three months, the tenders would come and we will compete in these tenders. And we expect that next three, four years, we may be doing, if we talk of KAY ACH exclusively, then may be INR4,000 crores to INRS,000 crores of deliveries.

We should get these orders to the tune of INR4,000 crorcs to INRS,000 crores kind of delivery orders. And if we Lalk of complete system like LTE and this one put together. So there I guess that we will try our best to get even better, but we hope that we'll get orders lo the tune of around INRS,000 crores to INR7,000 crorcs of orders. LTE as well us KAV /\Cl I.

INRS,000 crores to TNR? ,000 crores on 5G or it is total KA V AC! I?

It is total. Both are pmi of the same system, but the OEMs would be different. Tenders are also coming separate. They arc not in one tender. Page 3 of 13 3 Generated from eOffice by HARtSH CHANDRA BATRA. GM/FtNANCE/CO/RCIL/HC. GM/FINANCEtCO/RCIL. Corporate Office on 09/05/2024 04:40 pm

File No. RCllJiFIN(MISC)/2/2024-0/o Addi. \ 1 · GM; Finance/CO/ RCIL GM/Finance/CO/RCIL (Computer No. 42676) Rai!Te/ Corporation of India Limited ~ So one will be for deploying 4G. the other will be for the deploying KA VACI!. And both put together, you're telling could be in lhe lune of rNR5,000 crorcs to rNR7,000 crorcs?

Yes, that will be complete system of train collision avoidance system.

Got it. That's fair and quite a good news. Just to understand a little bit more, you said it's a new entrant and it is still under the POC. Who are the competition here in the KA VACI I for us"/ It's the companies like Siemens?

No. Right now, one is Mcdha. The other one is HBL NIFE. J\.nd th..: third one is Kcrncx. And G.G. Tronics is also another new entrant whose producl is also under testing.

Okay. Got it. And the company you said is Quadrant FuturcTck. Is that name'! Yes, Quadrant FuturcTck.

Quadrant, Okay. I've got it. And they arc quite established and capable company?

Yes. They have a good experience of working in railways sector. They are already working in this sector. Fair enough.

Their products are different though, but Yes.

That holistically answered my question very well there. Second on the telecom service. I think we were hopeful of doing double digit 10%-12% kind of a revenue growth this year and we probably ended in a mid-single digit. What's happening on the telecom side and what arc the challenges we arc looking al, and how should we sec this revenue in next year?

Yes. Actually, if you are aware, I think -- number one, 5G could not get the kind of fanfare ii was launched. But I think telcos arc also struggling. So SG also could not make the numbers.

That is one aspect of it. But tariffs arc also continuously under pressure. And demand, of course, is there. But because of falling tariffs, we are not able to see that kind of growth in terms of revenue.

But we ure finding -- we are trying to find new ways so that we can make ii more feasible and possible for us to make a double digit growth, at least I 0% of growth. So we have worked out some strnlcgies in this and we arc hopeful that we will be successful in laking the growth of telecom business to I 0% kind of.

Got it. The next is on the margins in the project business. This quarter, again, the EBIT n111rgin was on the lower end. You said that the older project, which had lower margin, was completed.

Any particular reason for this quarter having a margin of only 2.4%'!

See, if you sec the -- like I have been telling you earlier also, so I think during - I remember I think it was half yearly meet or I think maybe subsequent one, wherein I had been informing Page 4 of 13 4 Generated from eOffice by HARISH CHANDRA BATRA. GM/FINANCE/CO/RCIL/HC. GM/ FINANCE/CO/RCIL. Corporate Office on 09/05/2024 04:40 pm

, File No. RC~-fliFIN(MISC)/ 2/2024-0/ o Addi. \ ~ - GM/Finance/CO/RCIL GM/ Finance/CO/ RCIL (Computer No. 42676) Raiffe/ Corporation of India Limited ~

So few businesses which we were lo enter, like, for example, in education, we were Lo enter the education sector in a bigger way. So we had to take some forward calls, some aggressive calls.

And that is the reason that Q4. this affected our margin. Otherwise, you can take this only incidental to quarter four. And ovcmll. if you sec, we have been able to make it better number, if you see on a complete financial year.

Got it. On this project, on the KA V ACH side, what is the expected margin that we arc working with in our projection? Will you be able to do a 5%?

TI1is will not be possible for us to share because sometimes these are business secrets and because there's a lot of competition and people might lake advantage ofit. Bui certainly, we will do our best because it is competition. lt is not domination. Dul Yes, 8% to 10% we expect that we should be able to manage. Got it.

But still, I don't want to really comment much upon it. fair enough, sir. Just one last. ..

And then moreover, this all depends on the scope, the competition, because there arc many factors. You come to know in a particular tender that sometimes market intelligence you get, that so many bidders are interested, who are the parties who are participating, what kind of jobs they already have on their hands. So there arc many factors. We decide accordingly.

That's correct. On the Edge data center, where are we now in terms of... I thought we have completed the tendering, right?

Yes. So there's good news that we have onboarded a partner and the partner has already started its survey. And th.is year, we are expecting that JO to 12 Edge data centers will be operational.

And next year, we'll take a good number of data centers. So by the end of this year, we should be getting the same reflected in our numbers, maybe by quarter four. Yes.

Okay. And what is the estimated revenue from that? 1 won't be able to comment it right now, because this is ultimately revenue share. But yes, this year, I won't be able lo say much about it. Maybe ...

But at a full blown, will this segment give us INRI00 crorcs of annual revenue?

Yes, in the two years run, we can expect. Not right now.

When it matures, it is big enough, we should be able to do I 00. So that at least is a target for us.

Thank you, Sanjay sir. Thanks for patiently answering our questions. And best of luck for the coming quarters. Page 5 of 13 5 Generated from eOffice by HARISH CHANDRA BATRA. GM/FINANCE/CO/RCIL/HC. GM/FINANCE/CO/RCIL, Corporate Office on 09/05/2024 04:40 pm

File No. RC~"l)iFIN(MISC)/2/ 2024-0 / o Addi. 341164/2024/0 .. \ ,'· GM1Finance1CO;RCIL GM/ Finance/CO/ RCIL (Computer No. 42676) Rail Tel Corporation of India limited May 03, W 24 ~ Sanjesh ,Jain:

Thank you. The next question is from the line of Sanjesh Jain from ICICl Securities. Please go ahead.

Yes, thanks for taking my question again. Sir, can you just share the annual revenue for our sub- segment, NLD. ILD. and ISP'/ So this year, let me, so let me try to give you the answer. Let me get the number. If you have a11y other questions in the meantime, I can segment them. Only qum1crly or you want annual? FY '24.

FY '24, yes. So !Pl ifwe talk of, it is INR 238 crores. Okay.

ISP, INR433 crorcs. And NLD was INR 59 1 crores.

And what was the contribution of railway and non-railway in the project?

In the project? Railway project overall is 17% of the total revenue coming from railway. But project-wise, I don't have the exact break-up. Railway project is around INR266 crores out of 1302. So roughly, Yes, roughly 15%, 17%, I think. 17%. Yes.

So railway was quite low in the projects this year. And that should ... And this includes the VSS project? I think YSS itself ...

VSS project actually C0llid not be undertaken to the extent we expected. And that is also one reason that Q4 was afTected. Because there is some -- if you see the website of the MeitY, so they have come out with new guidelines for procurement of cameras and security-related specifications have been given. So that is -- wc were already following that. So that bas affected slightly our supplies. And now those things arc getting settled. So we should be able to finish this project this year. I think by end of December, we will be closing this project.

And that will be totally INR800 crores was what we were expecting, right?

Yes, it is close to 800. So some of it is already executed to the part. Some part of it is already executed. And roughly close to INR600 crorcs is remaining, which we are expecting to close this year.

Uot it, got it. I think •· and what 1s the Rail Wire i\ Rl'U and subscriber?

Rail Wire ARPU this year, because of competition again, so we had to tweak our tariffs also.

And because of U1ere's a lot of churning, new ISPs are also corning with very aggressive tariffs. Page 6 of 13 6 Generated from eOffice by HARISH CHANDRA BATRA. GM/FINANCE/CO/RCIL/ HC, GM/FINANCE/CO/RCIL, Corporate Office on 09/05/2024 04: 40 pm

File No. RS!J,--Jli.FIN(MISC)/2/2024-0/o Addi. 341 279/2024/v~ \ GM;Finance/CO/RCIL (Computer No. 42676) Rai/1'el Corporation of India Limited ~

So AR.PU is slightly lower. It is 5 IO for this financial year. /\nd numbers are close to 1NR5. 75 lakhs. 5. 75 lakhs. These have not grown so much.

But there is one good news in this. We have recently got an order frorn Government of Gujarat, where it is subsidy-based model. And we have to provide broadband connectivity to I lakh households in Gujarat in next one year. So we hope that this will certainly give us boost and we can take the same model when we successfully execute this to ulhcr states also.

And so how docs this work'' Customer doesn't pay and Government pays for it.

Govenunent will pay subsidy to us on each connection. We provide to the subscribers, to their homes.

So lhe overall ARPU including the subsidy will be equivalent to INR500 or will it be lower than that?

No, that will again, it will affect /\RPU of course because the plans will be generally targeting the rnral areas. So those plans may not be that heavy. But then consumption again would be not that much and that is another part of it. So because urban area generally consumption is more.

So what is tbe AR.PU for this 100,000 new customers we are anticipating? ARPU should be somewhere around 200. Okay. Plans will be 400 kind of. Annual.

We are yet lo launch il. We are working on the tariffs and all. But this is very recent order.So we are still working on the tariffs and we are free to fix the tariffs depending upon the target market.

Only the gap will be filled by the government? No, not gap. There is a fixed subsidy. Okay, it's a fixed subsidy.

Because there is one time expenditure to provide this broadband lo every home. So we all when we take a connection, we provide the modem. We have to lay some fiber and all that. So we have a partner who will be working with us and they will be doing all this activity.

So we will be laying any fiber for this because this will be more? Page 7 of 13 Generated from eOffice by HARISH CHANDRA BATRA, GM/FINANCE/CO/RCIL/HC, GM/FtNANCE/CO/RCtL. Corporate Office on 09/05/2024 06:20 pm

File No. RC~1JiFIN(MISC)/2/2024-0/o Addi. 341164/2024/O'-i.\ 1 · G M/Finance /CO;RCIL GM1Finance1C01RCIL (Computer No. 42676) Rui/Tel Cu1porutio11 uf!ndia Limited ~ Sanje~h J11in:

No, not really. Sec Gujarat. 13haratNct they already have laid a lot of fiber within the state of Gujarat. So that fiber will be available for us to use. That is the actually basic tenet of this complete design, the scheme of the government. And we will be sharing a part of revenue also lo government of Gujarat.

And what is the capex expected for next year?

Capex will be in the range of somewhere around INR250 crorcs. Okay, so INR200 crorcs lo INR250 crorcs?

TNR250 crores. Yes, INR 200 to INR 250 erorc, hut I think we will be able to make INR 250 crore. Okay, this is fur FY25.

Yes mostly we will be spending on network expansion enhancing our and data center also.

We haven't announced any dividend this time around while we have generated a good cash now in FY24, will that be taken separately a board meeting for that or how should one think about it?

Generally, we do this exercise at the lime of AGM. So we have been doing this every year al the time of AGM, so we will do certainly. We'll take it to the board and they'll take approval of board and the11 we'll announce it.

Got ii. That's clear. Thank you, sir, again. Thanks for taking all the questions and best of luck.

Thank you. The next question is from the line of Dhvani Shah from Investec. Please go ahead.

Thank you for taking my question. I just wanted to understand how should we look at telecom margins for the next year'? Telecom margins'? Yes. it will be 20% lo 22% in the range of 20 plus basically 22% and close to that to maintain the same.

And on the unallocated assets, can you help us understand why is there such a big jump since last year?

Sorry, there's a lot of noise in the background.

Can you just explain why there has been an increase in the wiallocated assets? Come again.

Why has there been such an increase in the unallocated asscL~ versus last year'/ Page 8 of 13 8 Generated from eOHice by HARISH CHANDRA BATRA, GM/FINANCE/CO/RCIL/HC, GM/FINANCE/CO/RCIL. Corporate Office on 09/05/2024 04:40 pm

File No. RC~~FIN(MISC)/2/2024-0/o Addi. 341164/2024/0, \ GM/ Finance/CO;RCIL (Computer No. 42676) RailTel Corpora1io11 of India li111i1ed ~

Give me some time we will answer to this. It is cash and bank balance.

Okay, because the jump if you sec in the asset segment that's given is from almost rNR25,000 lakhs to INR I, 14,000 lakh as per given in the segment-wise asset and liability statement.

Mr. Batra will be answering this question. He is GM Finance.

Primarily the cash and bank balance and certain other assets are also there.

He's talking of segmental. I think Dhwani ji he will find out the complete answer to your question. In the meantime, if you have any other questions otherwise we will answer your question. Yes. That's it. Thank you.

The next question is from the line ofVishal Periwal from lDBI Capital. Please go ahead.

Yes, sir. Thanks for the opportunity. l think, sir, the previous participant I think the question was like there has been changes in certain - the amount has been moved from tclecom services to unallocable assets.

Even lbe project side, the line item in the segmental asset side it has seen an increase, but at a company level definitely the net working capital or what we derive it's not been major change.

So, the query was what does movement ha~ been happening between the segments. So, that was just to clarify that?

Thank you. Vishalji. Our finance team is just working on it.

Sure. And, sir, a couple of maybe like reiteration if I can ask. I think at a project segment level there has been an improvement in the margins. If you look at FY24 that is an annual year basis al a EBIT margin is 22% which was around 20% odd.

So, I think though you have clarified, but can you say that like the margin pressure or probably like the pricing pressure which you also touched upon brieny in the call. So, can we say that is mostly gone and probably things are looking better in the last second half or the fourth quarter?

Can you say based on what you're seeing on the ground, sir?

No, actually, we talk of project business. So, many limes, as I told you earlier also that. ..

Sir, this was regarding tclecom. Telco, I think. There we are seeing an improvement in margins?

Telecom pricing pressure is yes. It is still there. It's going to be there. So, Indian telccom sector is certainly much different from worldwide, world over. This has been a different story and in fact, all of us know that our tel cos are always under pressure. Page 9 of 13 9 Generated from eOffice by HARISH CHANDRA BATRA. GM/FINANCE/CO/RCIL/HC. GM/FINANCE/CO/RCIL, Corporate Office on 09/05/2024 04:40 pm

File No. RC~lliFIN(MISC)/ 2/ 2024-0/ o Addi. \ GM; Finance/ CO/ RCIL (Computer No. 42676) Ra11Tel Corporation oj India Limited ~ In fact, Vodafone is struggling to come back. So, that pressure is going to be there. That is the story of Indian telecorn sector market that will remain.

Right. right. Okay. And then, sir, in project segment, l think the order book continues lo remain strong and you're guiding, like, you know, touching 1NR2,000-odd crorcs. So, typically, when wc gt:! this order, can you share some name with whom do wc compete to get this project's order?

It depends. Sec. we arc working on different sectors. So, many times, they arc private sectors. like L&T or Airtel or Jio, Stcrlite. They arc, like, our competitors when we are working on system integrator kind of projects. Sometimes, they are PS Us, our competitors, if the tender is mostly invited. Sometimes, mostly invited by the state govemments among the PSUs.

And even defense organizations are also inviting many times among the PS Us. So, this is what, like, Tata Communications, Airtel, they arc the, from private sector side Sify, ir you talk of telecom sector. And Airtel and Jio, they are in system integration also sometimes when it is specifically having a sizable component oftelecom business also. So, they are our competitors.

Okay. And then, this order book, how exactly arc we seeing in any target that you have given to the team, that the INR4,700-odd crores, how do you see this coming year? Execution will be pretty good. So, there will be depletion, but what we are targeting in terms of inflow, any color? • On inflow of new order book, the order you arc talking ol'? Yes.

Yes. So, we expect with the kind of tenders, including those from railways, we expect that it should be, we should strive to get orders of around TNR4,000 crores. New orders.

Okay. And this will also have an element of KAVACH also. ll will be part of it. Y cs. Of course.

Of course. Okay. And U1en. U1is KA YACH order for the quadrant, is it already approved vendor by the railway?

They are in the process of approval. Prototype has already been approved and the proof of POC testing is underway. Field trial is underway. And now, this is not a challenge. So, once prototype is approved, then field trials, they have lo tweak their soflware and maybe some hardware kind of devices.

But now, ii is almost, so that is what we were waiting. We were in discussion with the quadrant for quite some time. And now, we have signed an MOU with them. So, mostly we will be bidding in the tenders with this product.

Okay. And in this edge data center, which you clarified, so can you share who all our clientcle are? 1 think for whom we do this work. And again, like in India, any competitors also that you Page 10 of 13 10 Generated from eOffice by HARISH CHANDRA BATRA. GM1FtNANCE1C01RCtL/HC, GM/FtNANCE/CO/RCIL, Corporate Office on 09/05/2024 04:40 pm

File No. RC~1}£FIN(MISC)/2/2024-0/o Addi. 341164/2024/ 0 ~ \ 1 · GM/Finance/CO;RCIL GM;Finance/CO/RCIL (Computer No. 42676) Rai/Tel Corporation of India Limited ~ sec in this sector, in this segment, that from a sector point or view, if you can give some color, it will be helpful?

Mostly, we will be, again, eyeing government customers, mostly because of most of the, many of the customers, they arc comfortable when the data center activity, data center operations arc managed hy in-house government-owned entity, in-house team of government-owned entity.

And that is where wc arc. So, that is one.

And second, many ofll1e applications, like video gaming applications, there the latency is a very important parameter. And the data center, the closer it is to the user, it gives you better performance. Aad similarly, these live events, kind of IPL matches, even these OTT platforms like I lutstar, and then Nctllix an<l many more, llwy are also, they arc looking fur best experience to their users.

So, that as close as possible, they are dose to the customers, subscribers, because the number of users are also increasing. Every time they require a fatter pipe, if you are somewhere away, and that introduces latency also. So, that is, these are the kind of prospective customers.

One more thing I would like to share with the investors through your question, that recently we have won an order from Prasar Bharali, where we are developing an OT!', which is being actually based on the content provided by Doordarshan. And it will be vc1y useful to the rural and remote areas. It will he popular in Tier 3, Tier 4 towns, because of their taste, and it will be kind of even targeting the linguistic areas, like statewide, tbey can target.

So, that is a very good order, which we have, and we will he, we ~re very much confident, we arc very much i:xcited about this. So, that will also be one prospct:livc user of our Edge Data Center.

Okay. Got it, sir. And then, this Gujarat work, you did briefly mention, the subsidy will be given.

The subsidy is on the capcx, which is more like a modem router. Then the customer, usually they have to take the plan and then they have· to pay for it. ls that a business, obviously?

In a sense, let's say it is capex, but actually it is not directly capex. It is subscriber-based. So, individuals, every individual subscriber we add, we get the subsidy.

But then, on annual basis or monthly arc onboarded, there is no subsidy. On a monthly basis, they get a ...

No. There is no rccuning. There is nothing. Actually, generally, the challenge has been in laking such kind of services to the 11.1ral and remote areas, that one-time expenses are sometimes prohibitive. And the operators, they see commercial angle and they don't have an early ROI.

And then, ultimately, these services arc nnt available lo tl10se folks, those masses. So, that is the idea.

Okay. So, basically, the idea is like, the Railwire wherein the subscriber base could sec some bit or improvement with these kind of initiatives thal the government is taking and then RailTcl becomes a bencficiaiy. That's how one can read? Page 11 of 13 11 Generated from eOffice by HARISH CHANDRA BATRA, GM/FINANCE/CO/RCIL/HC, GM/FINANCE/CO/RCIL. Corporate Office on 09/05/2024 04:40 pm

File No. RC~l)liFIN(MISC)/ 2/2024-O/ o Addi. 3411 64/2024/O, \ lj'· GM1Finance1CO1RCIL GM / Finance/CO/ RCIL (Computer No. 42676) Rai/Tel Curpuratio11 of India Limited ~ Sanjai Kum11r: Visl111l Periwnl:

Yes. So, generally. actually, railways, RailTcl subscriber base is mostly in rural areas. 13111 then, we were also facing this challenge that who will put this money, this one-Lime expenditure Lo take these services, these broad hand services to the home, So, sometimes, there are some affluent subscrihers in those areas, some SMEs in those areas. They Lake such services. llul then. puhlic in gcncrnl, generally, was nol very keen to start such services. So, now, with this kind of support from government, it will be possible. And one more fact that the llharatncl project has also actually provided this kind of used fiber being laid in those states. And so, lhal will take us closer to the subscriber base.

Okay. Good lo hear 1hi,. And maybe one last question. Overnll, 1 think at a company level, I mean, we have been guiding 20%-25% kind of revenue growth. So, how do you sec this in l'Y25 for us? This is my last question.

You arc talking of revenue guidance, revenue growth guidance'/ Yes. I think we arc done.

Okay. Sure, sir. I'll come back in the queue for more, sir. Thank you very much. Thank you.

Thank you. The next question is from the line of Raaj from A1jav Pa11ners. Please go ahead. Sir, please go ahead. Yes, Mr. Raj.

Mr. Raj, may I request you to unmute your line and speak, please? The line for Mr. Raj has been dropped. The next question is from the line of Decpak Purswani from Svan lnvcstmcnl. Please go ahead.

Yes. Sir, jusl wanted to understand about the data center business. lfyou can throw some light in terms of what would be the megawatt capacity we would be looking out to add ii up and what would be the revenue model in this kind of business?

So if you're talking about edge data center, then we are actually going to have a very small edge data center at around I 00 locations and those will be somewhere around, I think if we put together complete capacity, so it will be somewhere around, I think, 20. 20 mcgawalts?

No, 20 kilo walls for euch. 20 racks and 10 kilowults each. So it is 20 megawalts. Roughly around 20 megawalts. A small 100, soil will be 0.2 megawatts in each location. 0.2 megawatts. Page 12 of 13 12 Generated from eOttice by HARISH CHANDRA BATRA, GM/FINANCE1C01RCIL/HC. GM/FINANCE/CO/RCIL Corporate Office on 09/05/2024 04:40 pm

File No. RC~~FIN(MISC}/2/2024-0 /o Addi. 3411 64/2024/0, \ GM/ Finance/CO/ RCIL (Computer No. 42676} Rai/Te/ Corporation of India Limited ~

Okay. And sir, how would be our revenue model in this? This would be a core location with any of the government agency or where we would be only getting the rental part or this would be a completely different model from the data center point of view?

Yes. So this is going to be a difTerent model in the sense that the investment is being done by our partner and because of our network connectivity, because of our access to the government and the trust government shows in a government entity that kind of marketing we have already and then their own marketing capability. So this is a kind of combined efTort we will be making and this is a unique model, I think. I don't know whether such kind of model already exists.

Okay. And any thoughts once this would be operational, what would be the revenue potential we arc looking at from this business and what would be the EBITDA margin we would be targeting for this business?

EBITDJ\ margin, if we talk of, it will be in range of I 0% or so because this is on revenue sharing basis. Investment is being done by them and we will be h,iving our own marketing and sales teams available. So I suppose this will be in the range of somewhere around 10%.

Okay. And what would be the revenue potential from this?

Revenue, I would say this 20 megawatt complete once it is rolled out, then it should give us· around maybe close to somewhere around INRI 00 crores of revenue.

Okay. Thank you. Thanks a lot, sir, for answering the question. I wish you all the best. Thank you.

Thank you. Ladies and gentlemen, this was the last question. We would now conclude the call.

On behalfof RailTel Corporation, that concludes this conference. Thank you for joining us and you may now disconnect your line. Page 13 of 13 13 Generated from eOffice by HARISH CHANDRA BATRA, GM/FINANCE/CO/RCIL/HC. GM/FINANCE/CO/RCIL, Corporate Office on 09/05/2024 04:40 pm