RailTel poised for ₹1,000 crore Kavach bids

RailTel — the Railways-owned PSE that is into broadband and VPN services — has bid for ₹500 crore-odd worth Kavach (the indigenous automatic train protection system) orders between October and December (Q3 FY25); while it expects to bid for another ₹500 crore worth of orders in the first quarter of the coming fiscal (FY26), officials told businessline.

RailTel has partnered with Quadrant, one of the Kavach OEM providers, with the latter getting design approvals recently. Bids have been placed jointly by the two.

“The tenders are currently under evaluation by the Railways,” the official said.

If RailTel wins the bids, the Kavach roll-out will drive home margins in the 8-10 per cent range, in line with its other Railway projects.

What is Kavach?

The Kavach train collision avoidance system (TCAS) has three-to-four main components that include a radio frequency identification (RFID) technology — integrated into tracks and wireless devices; RFID readers — equipped in the driver’s cabin (locomotive); radio infrastructure — that includes towers and modems at railway stations; and cabin instrument panels that display signals and speed limits.

The protection system alerts a pilot to red signals and applies automatic brakes if necessary. It also provides an onboard display of signal to enable safer operation in adverse visibility.

According to V Rama Manohara Rao, Director (Finance), RailTel Corporation of India, the bids are not for a single tender but are spread out across various railway zones and divisions.

“As and when the tenders are coming up, depending upon our suitability and other parameters, we will keep participating,” he said adding that the current addressable market is nearly ₹7,000—8,000 crore, that is tenders worth this amount is ready for roll-out, over the next two to three year period.

If RailTel wins the orders, these are expected to “go into execution” in FY26 (from April).

“….we may be participating in another ₹500 crore in the next financial year or so. So our order book is looking up…. participation in the tenders will be around ₹1,000 crore in the next year. So, the execution mode will depend on how much we win,” Rao said during a recent investor call.

RailTel will be fore-fronting the Kavach projects while Quadrant will be the OEM provider; which means the CPSE will be booking the entire revenue with the components being “bought out” from the partner.

It is being expected that nearly 50–60 per cent will be the roll-out cost whereas equipment buyout will be around 40–50 per cent (the remaining portion).

Roll-out plans

So far, Indian Railways has worked out a three phase Kavach roll-out plan covering over 66,000 route KMs (rKM) of key and high density routes across its total network of 68,000 rKM, to be completed by 2030.

In the first phase, which is currently underway, bids for 14,735 rKM has been invited; while phase II — to be implemented in FY26 — will see bids for 17,000 rKM. The third phase — covering FY27 and FY28 — will be for 30,000 rKM.

At least 10,000 locomotives, including the new Vande Bharat trainsets will come pre-installed with the anti-train collision system.

The average cost of installation of the system works out to be ₹50 lakh per rKM. In total, sanctions for installation of Kavach 4.0 has been received in 36,000 rKM, of which umbrella sanction received in FY25 was for 30,000 rKM.