RailTel targets Rs 500 crore data-centre revenue next year

RailTel Corporation of India Limited is targeting about Rs 500 crore of data-centre revenue next year, compared with about Rs 300 crore projected for the current year, while its 10-megawatt (MW) Noida data centre is targeted to go live by May 2027. Management said the target covers RailTel’s wider data-centre business, not Noida alone.

What is RailTel’s data-centre revenue target?

RailTel is targeting around Rs 500 crore of data-centre business revenue next year after projecting around Rs 300 crore for the current year. Chairman and Managing Director Sanjai Kumar gave the target during RailTel’s October 29, 2026 second-quarter (Q2) FY27 earnings call, describing it as an overall data-centre business objective rather than a forecast for a single location.

The implied increase between management’s two annual indications is about Rs 200 crore. RailTel did not provide quarterly milestones for the Rs 500 crore level, a segment margin target, or a split between owned, edge and other data-centre facilities. It also did not quantify data-centre revenue in Q2 FY27.

Management explicitly said the expected revenue cannot be attributed only to the upcoming Noida facility. RailTel has two other facilities, including an edge data centre in Mumbai, according to Kumar. The Rs 500 crore target therefore reflects the combined data-centre business rather than the revenue capacity of the 10 MW Noida site.

When will RailTel’s Noida data centre start operations?

RailTel is targeting May 2027 for the 10 MW Noida data centre to become live. Civil construction was in its final phase at the time of the October 29, 2026 call, and internal fittings were still to be completed before the facility could start operations, Kumar said.

The May 2027 date is a management target rather than a completed commissioning milestone. RailTel did not disclose construction spending, a customer commitment, utilisation assumptions, or a revenue contribution from Noida. Management instead said a new data centre takes time to build operating momentum after it is established.

The call does not establish that the 10 MW facility will contribute for a full year immediately after becoming live. RailTel’s comments point to a staged process, with internal works pending after civil construction and customer acquisition needed for capacity to translate into revenue.

How is RailTel expanding its edge data-centre network?

RailTel had commissioned two edge data centres in the prior year and said they were recently commissioned and already close to sold out. Management is targeting two more edge data centres in the current financial year, rather than the five-site rollout pace an analyst said had been anticipated earlier.

An edge data centre is a smaller facility located closer to users or network endpoints than a large central data centre. RailTel described the edge facilities as smaller units and said it was seeking customers alongside development. It did not disclose the capacity, location beyond the Mumbai facility, revenue, or utilisation percentage for the two sites said to be close to sold out.

The rollout has moved more slowly than the earlier expectation cited by the analyst. Kumar said edge-data-centre demand had probably not developed at the pace anticipated over roughly two years. He also said many government organisations were developing their own on-premises requirements, which may reduce immediate demand for third-party edge capacity.

Management nevertheless said RailTel was targeting two edge centres in the current financial year and expected demand to pick up. That is a plan rather than a disclosed order book. The two recently commissioned facilities being close to sold out does not provide a disclosed utilisation or revenue estimate for future locations.

What else supports RailTel’s growth plan?

RailTel reported operating revenue of Rs 1,146 crore in Q2 FY27, up 28% from Rs 893 crore in Q1 FY27. The Telecom segment contributed Rs 397 crore and the Projects segment contributed Rs 749 crore, making projects the larger contributor to quarterly operating turnover while data-centre revenue remains unseparated within the broader business.

For the first half (H1) of FY27, revenue from operations reached Rs 2,039 crore, compared with Rs 1,695 crore in H1 FY26, a 20% increase. RailTel also reported new orders of Rs 2,458 crore in H1 FY27 and an order book of Rs 12,282 crore as of the call, although management did not identify a specific data-centre order value within that backlog.

The company said it had converted around Rs 1,282 crore of project orders into revenue so far and remained hopeful of meeting its earlier anticipated Rs 3,500 crore project-revenue figure for the financial year. Management said project execution has historically accelerated in the second half, which relates to company-wide revenue and not specifically to data-centre revenue.

RailTel’s Q2 FY27 profit after tax was Rs 69 crore, up 4% quarter on quarter, while operating revenue rose 28%. Kumar attributed the difference partly to an expected credit loss provision of Rs 32 crore for certain debtors. He said the provision was unusual, involved government customers, and resulted from delays longer than normal rather than disputes.

Conclusion

RailTel has set out a data-centre revenue plan of about Rs 300 crore for the current year and Rs 500 crore for next year, supported by the planned 10 MW Noida facility and edge-data-centre expansion. The call also qualifies that plan: Noida is not operating yet, the Rs 500 crore target covers more than one facility, and edge demand has developed more slowly than anticipated.

The next disclosed milestone is RailTel’s May 2027 target for the Noida facility to go live, following internal fittings after final-stage civil construction. Investors can also watch whether RailTel commissions the two additional edge data centres targeted in the current financial year and whether customer demand improves beyond the two recently commissioned sites that management said were close to sold out.