RailTel Faces ₹600 Cr Blow as Bihar Cancels Education Projects
Overview
RailTel Corporation of India's shares are under scrutiny following the cancellation of Bihar Education Project Council orders totaling ₹609.56 crore. The lost projects include smart classrooms and educational materials, impacting the company's revenue outlook. Investors are watching for further clarification.
Stocks Mentioned
RailTel Corporation of India Ltd. faced significant headwinds as the Bihar Education Project Council cancelled work orders worth approximately ₹609.56 crore. The stock was in focus on Wednesday, January 14, following the news.
Project Cancellations Rock RailTel
RailTel had previously received a Letter of Acceptance for a substantial ₹262.14 crore project. This initiative involved the procurement, supply, and installation of smart classrooms in government middle schools across Bihar. However, the Bihar Education Project Council cited "unavoidable reasons" for terminating this significant order.
Further Revenue Setbacks
The company's disclosed losses extend beyond smart classrooms. RailTel also reported the cancellation of an order valued at ₹89.92 crore. This project pertained to the supply of teaching learning material for Classes I to V in government schools within Bihar. Furthermore, the State Project Director of the Bihar Education Project Council cancelled a separate LoA and work order for another project worth ₹257.50 crore, adding to the financial impact.
Market Performance Under Pressure
RailTel Corporation shares concluded Tuesday's trading session 0.80% lower at ₹340.80. The market is now assessing the full impact of these substantial order cancellations on the company's financial performance and future revenue streams. Investors will be closely watching for any further official statements or revised guidance from the company.
