Shares of ITI Ltd. surged by 11% to hit a new high of ₹422.45 on the BSE during Friday’s intra-day trade, reflecting strong market optimism. Over the past week, the stock has risen by 29%, marking a remarkable 92% increase in the last two months and a staggering 302% surge over two years from ₹105.10 on January 3, 2023.
Key Drivers Behind the Rally
- Strong Order Book and Key Project Wins
- ITI has secured significant projects, including BharatNet Phase II, the Ascon project for the Defence Ministry, smart energy meters, and the Network for Spectrum.
- On November 10, 2024, ITI emerged as the Lowest Bidder (L1) for multiple packages of BharatNet Phase-3 worth ₹4,559 crore, covering states like Arunachal Pradesh, Nagaland, and West Bengal.
- A recent order worth ₹300 crore from the Bihar Renewable Energy Development Authority (BREDA) for installing 100,000 solar streetlights also contributed to positive sentiment.
- Improved Financial Performance
- ITI’s consolidated revenue from operations for H1FY25 jumped nearly fourfold to ₹1,536 crore from ₹403.51 crore in H1FY24.
- Despite a consolidated net loss of ₹161.64 crore in H1FY25, the losses have narrowed compared to ₹228.82 crore in H1FY24 and ₹568.92 crore in FY24.
- Strategic Importance and Revival Efforts
- ITI is a key player in projects aligned with Make in India, Digital India, and Smart City initiatives.
- The company is undergoing a revival under a Cabinet-approved Rehabilitation Scheme, with financial assistance of ₹4,156.79 crore, of which ₹3,025.35 crore has been disbursed.
- Diverse Portfolio and Market Presence
- ITI provides comprehensive telecom solutions, manufacturing products for defense, railways, and solar sectors, including GPON, NGN products, LED lighting systems, and encryptors for defense.
- It operates as a preferred supplier for key government entities like BSNL, MTNL, and the Ministry of Defence.
Market Performance
- ITI shares have seen significant trading activity, with over 37.76 million equity shares (39% of the floating equity) traded on the NSE and BSE.
- As of September 30, 2024, the Government of India holds a 90% stake in ITI, while public shareholders own the remaining 10%.
Outlook
The stock’s remarkable rally reflects investor confidence in ITI’s business outlook, bolstered by a robust order pipeline and strategic importance in India’s infrastructure and digital transformation projects. With its first-mover advantage in government contracts and ongoing revival initiatives, ITI is well-positioned for sustained growth in the telecom and allied sectors.
