Pace Digitek Limited has announced a significant business development with the receipt of an Advance Letter of Award worth Rs. 890.69 million from RailTel Corporation of India Limited. The contract encompasses supply, installation and commissioning of IP-based video surveillance systems in LHB coaches, marking a substantial addition to the company's order book.

Contract Details and Scope

The comprehensive contract includes both initial implementation and long-term maintenance components. The project involves supplying and installing IP-based video surveillance systems specifically designed for LHB (Linke Hofmann Busch) coaches, which are modern passenger train coaches used by Indian Railways.

Service Components and Timeline

The contract encompasses multiple service phases designed to ensure comprehensive coverage throughout the system lifecycle. The initial phase involves supply, installation and commissioning of the video surveillance infrastructure. Following successful implementation, Pace Digitek will provide a 3-year warranty period, ensuring system reliability and performance standards.

The agreement extends beyond the warranty phase with a 5-year Comprehensive Annual Maintenance Contract (CAMC). This long-term maintenance component provides sustained revenue visibility and strengthens the company's relationship with RailTel Corporation.

Regulatory Compliance and Disclosure

The company has fulfilled its disclosure obligations under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The announcement confirms this is a domestic contract with no related party transactions involved.

Strategic Significance

This contract represents a significant milestone for Pace Digitek Limited in the railway technology sector. The project involves working with RailTel Corporation, a major telecommunications and IT solutions provider for Indian Railways, on a back-to-back basis for one of their customers. The 8-year total engagement period, including warranty and maintenance phases, provides long-term revenue visibility and establishes the company's credentials in railway security systems.

The IP-based video surveillance technology for LHB coaches aligns with the ongoing modernization initiatives in Indian Railways, positioning Pace Digitek as a key technology partner in this transformation.

Pace Digitek Limited has delivered robust financial performance in Q3FY26, reporting consolidated revenue from operations of Rs. 644 crores, representing a 13.5% year-on-year growth and 20.7% quarter-on-quarter growth. The company achieved a profit after tax of Rs. 79 crores with a PAT margin of 12.2%, demonstrating strong operational execution across both energy and telecom segments.

Financial Performance Highlights

The company's financial metrics for Q3FY26 showcase steady growth momentum across key parameters:

For the nine months ended December 2025, revenue stood at Rs. 1,544.50 crores. The margin compression was attributed to project mix and execution phase differences, while employee expenses increased by 44.5% to Rs. 24.90 crores, reflecting capacity building initiatives across the energy sector.

BESS Manufacturing and Delivery Milestones

Pace Digitek achieved a significant operational milestone by delivering 400 MWh of Battery Energy Storage Systems during Q3FY26, with approximately 200 MWh already commissioned and operating satisfactorily in the field. Chairman & Managing Director Mr. Venugopal Rao Maddisetty highlighted that the company is among the first in India to deliver such substantial BESS capacity in a single quarter.

The company is implementing backward integration through in-house BESS container manufacturing, which will provide better cost control and supply chain management. All equipment for the 5 GWh expansion has been shipped and is expected to arrive by the first week of March 2026.

Order Book Expansion and Pipeline

The company's order book position demonstrates strong business momentum across both core segments:

The energy segment order book includes projects where Pace Digitek has been declared L1 bidder, with awards expected before March 2026. The company has secured orders across different BESS applications to avoid aggressive competition in certain market segments.

Strategic Business Structure and BOO Model

Pace Digitek has incorporated TransGreenX Energy Private Limited as a wholly-owned subsidiary to serve as a platform company for Built-Own-Operate (BOO) model projects. The BOO order book currently stands at Rs. 3,250 crores, with asset creation of Rs. 167 crores recorded during Q3FY26 for the MSEDCL project.

The company expects Rs. 2,200 crores of asset creation under the BOO model for FY2027, funded through IPO proceeds of Rs. 750 crores (net) and term loans from financial institutions.

Margin Structure and Competitive Positioning

Pace Digitek operates with a vertically integrated business model providing structural advantages across different business segments:

The company maintains competitive pricing against Chinese imports through duty advantages (5% on cells vs 10% on finished containers), local support capabilities, and spare parts availability for long-term projects requiring 95% availability under contract terms.

Future Outlook and Expansion Plans

For FY2027, Pace Digitek targets consolidated revenue of Rs. 3,200 crores, supported by strong order book execution and manufacturing capacity expansion. The company plans to explore export opportunities in Africa and Middle East markets, where pricing is more favorable than domestic rates. Manufacturing capacity utilization is expected at 80% based on existing orders, with 6 GWh of BESS orders already secured for the next financial year.