With the introduction of 5G services, increasing internet usage, and expanding digital platforms, the telecom industry in India has experienced significant growth.
The gross revenue of the telecom sector in the second quarter of Fiscal year 2024 was Rs. 82,741 crore. It is estimated that 500 million new internet users will be added in the next five years, creating new business opportunities.
Globally, India ranks second in terms of total internet users. The overall tele density of India is 85.76%. The rural market holds 59.44% and the urban market holds 133.42% of the tele density. The Indian telecom sector contributes to 6.5% of the nation’s GDP.
Why should you invest in telecom stocks?
Telecom stocks comprise shares of companies in several segments like mobile network operators, 4G, 5G, white space spectrum, telephone service providers, broadband, and infrastructure equipment.
Investing in the telecom sector can be a good idea for various reasons:
1. Consistent demand: Phones and laptops have become a daily need for people. Therefore, there is a steady demand for telecommunication services.
2. Regular income: Many telecom services are subscription-based, meaning companies get regular customer payments. So, these companies have predictable income sources.
3. Global growth: Telecom companies operate in many countries. This reduces risks and helps in spreading revenue sources. The international presence of these companies also diversifies their income sources.
4. Technological growth: Telecom companies are always working on new technologies. For example, the introduction of 4G and now 5G services in India. This simply attracts more customers and increases the profit.
5. Steady dividends: Some telecom companies pay regular dividends to their investors. Investors enjoy steady income along with potential stock price growth.
Top Telecom Stocks in India
India’s telecom sector is one of the largest and fastest-growing in the world. Some of the top telecom stocks in India that you might consider are:
Bharti Airtel
Bharti Airtel was Founded in 1995 by Sunil Mittal. The company is headquartered in New Delhi, India. Bharti Airtel operates in 18 countries across South Asia, Africa, and the Channel Islands. It is the second-largest mobile network in India.
Bharti Airtel is the market leader in the telecom sector of India. Airtel provides 5G, 4G, and LTE Advanced services in India. Its present services include Fixed line telephone, mobile telephony, broadband, satellite television, payments bank, digital television, internet television, and IPTV.
Bharti Airtel has given around 125% returns in the last three years. The company’s profit turned around Rs. 8500 Crores in FY 2023 from the loss of Rs. 30000 Crores in FY 2020. FIIs and Mutual funds have increased their stake in this telecom stock. Overall, the company is increasing its range in the telecom sector which makes it one of the best telecom stocks in India.
Tata Communications
Tata Communications was founded in 1986 as Videsh Sanchar Nigam Limited. The company is owned by the Government of India and based in Mumbai, Maharashtra (India).
Tata Communications offers broadband, internet services, and IT services. It provides network and software-defined network platforms like SD-WAN, Ethernet, the internet, multiprotocol label switching (MPLS), content delivery networks (CDNs), and private lines.
Tata Communications is one of the growing companies in the telecom sector. It has delivered a stunning 372% return in the last five years. The company’s profit turned around Rs. 950 Crores in FY 2023 from the loss of Rs. 85 Crores in FY 2020. FIIs and Mutual funds are constantly buying their stock which is a good buying signal.
Indus Towers
The company was founded in 2007 in Gurugram, Haryana (India). It was incorporated by Bharti Infratel, a subsidiary of Bharti Airtel. It has 22 telecom centers across the nation.
Indus towers provide passive infrastructure services to mobile network operators and other wireless service providers. The company merged with Bharti Infratel, creating the largest mobile tower infrastructure in the world. Its major customers are Airtel, Jio, Vi, and Bharti Hexacom.
Indus Towers has a market cap of over Rs. 1,15,000 Crores. Its profit turned nearly doubled from around Rs. 3000 Crores in FY 20 to Rs. 6100 Crores in FY 23. Mutual Funds have increased their holding up to 400% in this telecom stock.
ITI
ITI was founded in 1948 as a departmental factory. In 1950 it was incorporated as a public company. Currently, it has six manufacturing units in Bangalore, Mankapur, Naini, Raebareli, Srinagar, and Palakkad. The company is based in Bangalore, India.
ITI manufactures GSM mobile equipment, data handling, electronic manufacturing facilities for PCBs, smart energy meters, HDPE pipes, etc. It also produces Information and communication technology equipment.
The company has posted losses in the last three years but stock has given significant returns in the last five years. DIIs have increased their stake up to 10% in the last year. The company is working on the development of telecom equipment.
Vodafone Idea
Founded in 2018, Vi has its headquarters in Mumbai, Maharashtra, and Gandhinagar, Gujarat. It is the third-largest telecom network in India and the twelfth-largest in the world. The two separate brands Vodafone and Idea merged in 2018 creating Vi.
It is a mobile network operator providing 2G, 3 G, 4G, 5G (some cities), VoLTE, LTE Advanced, and WIFI services. Its products are mobile telephony, wireless broadband, and other internet services.
VI has shown significant growth after the merger between Vodafone and Idea. The company’s loss is constantly reducing its losses. It has better opportunities to turn profitable in upcoming years. Seeing its remarkable future opportunities, FIIs have increased their stake up to 1200% in the last year.
RailTel
RailTel was formed in September 2000. Its headquarters is in New Delhi, India. It is a public sector industry that works for the safety system of Indian railways and to modernize train control operations.
The company offers broadband and VPN services across railway stations in India. It creates a broadband, telecom, and multimedia network across the nation. It covers around 5000 stations across the country. Its services include Broadband, Internet services, and technology.
The Indian government is working towards the advancement of railway networks rapidly. so there are plenty of opportunities in Rail telecom. Due to a surge in demand, Railtel stock is in demand. It has given massively 330% returns in the last five years. The company’s profit doubled in the last five years. FIIs and DIIs have doubled their stake in the last year.
Explore the best Railway Stocks for Massive Returns :)
Tejas Networks
Tejas Networks was incorporated in 2000 in Bangalore, Karnataka (India). The company operates in 75 countries. Tejas Networks has built many IPs in several areas of telecom networking. This makes it a potential exporter to other developing countries like South Asia and Africa.
It deals in developing and selling its products to internet service providers, utilities, security, and government entities. Its products are fiber broadband access, Ethernet, 4G, and LTE services.
The company has given stunning 1200% returns in the last five years. FIIs and Mutual Funds have increased their holding in Tejas Networks.
GTL
GTL Limited was established in 1987 in Navi Mumbai, Maharashtra (India). It is the largest network service provider in India and is a global group enterprise.
Its services include planning networks, radio frequency, transmission engineering, fixed and core network engineering, and broadband networks. The company also maintains the established networks.
Future opportunities for investing in Telecom Stocks
With advancing technology and increasing internet usage, the telecom sector has an exciting future ahead. Here are some major points about the upcoming trends and opportunities:
5G Services: Telecom companies are rolling out 5G networks, which promise faster internet speeds and more reliable connections. Investing in these companies can capitalize on the growing demand for enhanced connectivity.
Data Usage: With increasing video streaming, online gaming, and remote work, data consumption is growing rapidly. Telecom companies can benefit from higher data plan sales and increased network usage.
Global Reach: Emerging markets present growth opportunities as more people gain access to mobile phones and the Internet. Investing in telecom companies with international reach can tap into these expanding markets.
Cloud Services: Telecom companies are expanding into cloud computing and storage services. This diversification can increase their profitability and attract investors looking for growth in digital infrastructure.
Conclusion
Investing in the telecom stocks offers good portfolio growth. However, investors should consider both the opportunities and risks, including regulatory challenges and competitive pressures within the industry.
Align your financial goals with the investment objectives. Understand the industry, its dynamics, and associated risks. You need a well-planned approach to maximize returns and achieve long-term growth. Thorough research and knowledge can boost your telecom stocks investments.
