This PSU telecom equipment share price has zoomed over 50% in one week

ITI share price hit a 10-month high of Rs 335 after it rallied 10 per cent on the BSE in Monday's intraday trade amid heavy volumes. The rally in ITI stock came after the company announced that it has emerged as the lowest bidder (L1) for three packages of BharatNet phase-3 project for a total value of Rs 4,559 crore.

 

The stock price of the state-owned telecom equipment company was trading at its highest level since January 2024. It had hit a record high of Rs 384.35 on January 17, 2024.

 

ITI stock is trading higher for a fifth straight day, zooming 51 per cent during the week. In comparison, the BSE Sensex was up less than 1 per cent during the period. The Government of India (GoI) held a 90-per cent stake in ITI at the end of the September 2024 quarter.

 

At 09:58 AM, ITI share price was quoting 9 per cent higher at Rs 331.65 as compared to the 0.10 per cent rise in the benchmark index. Average trading volume on the counter jumped nearly two-fold today with a combined 29 million equity shares changing hands on the NSE and BSE.

 

ITI, on Sunday, November 10, informed the stock exchanges that the company, with its consortium partner, has emerged as the lowest bidder (L1) for Package number 15 of BharatNet Phase-3 project comprising Arunachal Pradesh, Nagaland, and Manipur states with an order value of Rs 1,537 crore.

 

ITI Limited also emerged as the L1 bidder (on November 7, 2024) for package No. 8 in the state of Himachal Pradesh, and for Package No. 9 in West Bengal, and Andaman and Nicobar Islands with an order value of Rs 3,022 crore. With this, ITI has emerged as the L1 bidder for three packages (8,9, and15) taking the total order value to Rs 4,559 crore.

 

The BharatNet Phase-3 Project is divided into 16 packages, spread across all states and union territories. Public sector telecom company BSNL had invited tenders for the design, supply, construction, installation, upgradation, and operation and maintenance of the Middle Mile Network of BharatNet in 16 Packages/Circles.

 

The BharatNet Phase-3 project is envisaged to develop (creation, upgradation and operation and maintenance) the middle mile network of BharatNet on design, build, operate and maintain (DBOM) model.

 

Recently, ITI won an order from Bihar Renewable Energy Development Authority (BREDA) for supply and installation of 100,000 numbers of Solar Street Light Systems to Bihar State Government worth Rs 300 crore, the company said.

 

ITI manufactures telecom equipment and provides solutions to telecom service providers, the Ministry of Defence and other Government agencies. The company's product portfolio includes GSM (Global System for Mobile communication) and CDMA (Code-Division Multiple Access) products; defence products; and other diversified products. ITI's service portfolio includes managed leased line networks, standalone signalling transfer point networks, turnkey telecommunication solutions, data centres, etc.

 

With the first-mover advantage, ITI has been one of the key contractors for the projects of BSNL, MTNL, Ministry of Defence, Ministry of Rural Development, etc., in the last few decades. Given its strategic importance, ITI has been involved in Government projects such as Make in India, Digital India, and Smart City.

 

While historically, majority of the revenue and profit clocking happens in the last quarter of the fiscal year, the company's performance is likely to improve in FY2025 with stronger order execution in the second half of the year, though the ability of the company to demonstrate healthy and profitable execution of the projects remains to be seen, according to analysts.

 

Meanwhile, last month the rating agency Acuite upgraded its long term rating of bank loan facilities of ITI with a 'Stable' outlook.

 

Acuite said the rating factors continued support from Government of India, despite discontinuance of letter of comfort from Department of Telecom (DoT) and established track of operations. In addition to that, albeit deterioration in scale of operations and increase in losses year-on-year from FY22 to FY24 ,improvement in scale of operations and reduction in losses  in the Q1FY25 had been witnessed and expected to improve further in coming quarters and financial years on account of healthy order book position of Rs 11,227.32 crore as on 30th June 2024, providing a revenue visibility in the near to medium term.