Eltel

In this report, analysts Emil Sandquist and Isak Lindelöv present a comprehensive analysis
of Eltel, a Nordic provider of critical infrastructure services to power and telecom networks.
Following a decade of depressed margins after the fiber and 5G rollout downturn, CEO
Håkan Dahlström has replaced four of five top-level managers and shifted the Group’s focus
from volume-driven legacy work towards the higher-margin Emerging Business segment. A
structural revenue mix shift, margin recovery through operational and commercial
excellence, and eleven consecutive quarters of margin improvement support a target price of
SEK 17.5, corresponding to an upside of 36%.

Key Takeaways
● Emerging Business drives revenue growth: Growing from 0% of group revenue in 2023
to 23% in Q1 2026, the segment should reach 25% by 2027E at a 20% CAGR, lifting group
revenue ~5.5% annually and blended margins as mix shifts toward 8–10% EBIT margin
work.
● Operational Excellence expands margins: Headcount keeps falling in absolute terms as
revenue grows, raising revenue per employee from 2.29 to 2.91 SEKm by 2028E, while 40%
fleet electrification cuts transport costs, together adding roughly 100 bps of EBIT margin by
2027E.
● Commercial Excellence lessens price pressure: Top-five customer concentration down
to 40% of revenue and a surveillance system peers would need half a decade to replicate
should sustain pricing power well beyond the forecast period, adding a further 100 bps of
EBIT margin.