Shares of the state-run telecom equipment manufacturer ITI Ltd hit upper circuit on Thursday after the company was declared as L1 (lowest bidder) by Ministry of Defence in a contract worth Rs 7,000 crore. ITI Ltd has been declared as L1 in “ASCON Phase IV Project” by Ministry of Defence for the contract value of Rs 7000 crores (approximately), company said in an exchange filing. Following the announcement, the stock of ITI rose as much as 20% to Rs 122.2 on BSE today.
The Indian telecom sector seems under pressure since after the inception of disruptor Reliance Jio Infocomm which continues to hurt the profitability of telecom companies. India’s largest telecom Bharti Airtel which is a profit-making firm since the year 2000, also went into losses in the financial year 2016-2017. Bharti Airtel reported a loss of Rs 9,925.6 crore for the FY 2017 which is an unimaginably low if we look at the profit figures of the previous year which stood at Rs 7,546.5 crore.
ITI Ltd is one such telecom stock which could have doubled your investment in the last six months. Shares of ITI have risen more than 100% in the last six months while the benchmark indices Sensex and Nifty have returned around 10% only. The stock of the state-run telecom company ITI had advanced as much as 114% to the Thursday’s closing price of Rs 122.2.
Earlier this year, the public sector telecom company ITI Ltd has posted a 21% rise in net profit before tax at Rs 305 crore for 2016-17 as compared to Rs 251 crore for the last financial year. Company’s Chairman and Managing Director S Gopu said ITI plans to explore business opportunities in the IoT, e-Governance and ICT areas in addition to telecommunication and defense projects.
ITI Ltd is India’s first Public Sector Unit (PSU) which was established in 1948. Ever since then it has contributed to 50% of the present national telecom network. Its manufacturing facilities are spread across six locations with a countrywide network of marketing/service outlets, the company offers a complete range of telecom products and total solutions covering the whole spectrum of switching, transmission, access and subscriber premises equipment.