This smallcap telecom equipment stock has zoomed 103% in 2 months

Optiemus Infracom hit an all-time high of Rs 788 as the shares surged 17% in Monday's intraday trade amid heavy volumes

Shares of Optiemus Infracom (OIL) hit an all-time high of Rs 788, as they surged 17 per cent on the BSE in Monday's intraday trade, amid heavy volumes on the back of a healthy business outlook. In the past eight trading days, the stock of the telecom equipment and accessories company has rallied 40 per cent. In two months, it has zoomed 103 per cent.

At 12:50 PM, the stock of the small-cap company was trading 13 per cent higher at Rs 760.80 as compared to 0.15 per cent rise in the BSE Sensex. The average trading volume on the counter jumped over three-fold with around 1.78 million equity shares, representing 2 per cent of total equity of OIL, having changed hands on the NSE and BSE till the time of the writing of this report.

 

The company is engaged in the business of trading of telecommunication and allied products. One of its wholly owned subsidiary viz. GDN Enterprises Private Limited (GDN) is engaged in the business of manufacturing of the said products. The other wholly-owned subsidiary viz. Optiemus Electronics (OEL) is engaged in the business of telecommunication and allied products, including hearable and wearables, and IT hardware products.

In addition to the existing business, the company has commenced a new business/division namely "Optiemus Unmanned Systems" (OUS) and has launched technologically-sophisticated, high performance drones in various ranges. OUS will focus on producing high-quality, indigenous drones that can meet the specific needs of various industries such as Defence, Agriculture, Mining, Solar Farms, Oil and Gas, Railways, Highways etc.

On August 20, OEL announced that it has forayed into the telecom equipment manufacturing business. In its efforts to boost indigenous designing and manufacturing of telecom equipment in India, aligning with the vision of Prime Minister Narendra Modi for an 'Atmanirbhar Bharat', Optiemus is working with Tejas Networks as a manufacturing partner for a wide array of telecom equipment products like 4G Base Band Units / Remote Radio Head / ONT / ONU / Broadband Switches, and Routers from its Noida manufacturing facility.

As per industry body Federation of Indian Chambers of Commerce & Industry (FICCI) estimates, the drone manufacturing potential in India could be worth $ 4.2 billion by 2025, growing to a $23-billion industry by 2030 and making India a drone manufacturing powerhouse. Considering the approach of this unmanned system and the Government's initiatives towards promotion of drone manufacturing in India, this may make India a hub for drone production in the world.

Meanwhile, during the last four financial years, the Government of India has launched various Production Linked Incentive (PLI) Schemes to boost domestic manufacturing and attract large investments in mobile phones, hearable and wearable manufacturing, and specified electronic components. The PLI Scheme offers a production linked incentive to the manufacturer upon fulfilling the target specified under the said Scheme. The Scheme would tremendously boost the electronics manufacturing landscape and establish India at the global level in the electronics sector.

The PLI and PMP Schemes are expected to drive India's transformation into a global manufacturing hub by resulting in rapid expansion of manufacturing scale by various industries and making it competitive through a robust component ecosystem which was previously lacking. Concessions in customs duty will be given by the Government to certain consumer electronic devices to promote manufacturing across wearables, hearables and specific mobile phone components, the company said in its FY24 annual report.

Meanwhile, rating agency ICRA expects that Optiemus Group would continue to benefit from the healthy demand outlook for mobile phones, hearables, wearables, laptops, routers and others, as well as from promoters' experience and track record in mobile phone distribution and assembly.

"In FY2022, OEL resumed its manufacturing operations by targeting the wearables and hearable segment after onboarding Noise, a leading player in the Indian market. Besides Noise, the company boarded multiple clients for smart watches, laptops, tablets, mobiles and others. As a result, OEL and GDN boast a healthy confirmed order book of Rs 1,400 crore for FY25. The company should benefit from the favourable demand outlook with OEL's sizable assembly capacities built over the last few years," ICRA had said in its recent rating rationale.