Introduction
ITI Limited (formerly Indian Telephone Industries Limited), a Government of India undertaking, has been instrumental in India’s telecommunications and defense manufacturing sectors since its inception. Established in 1948, ITI has been a pioneer in indigenous production of telecom equipment and is strategically positioned in a rapidly digitizing economy.
Vision and Mission
- Vision: To emerge as a key contributor to India’s digital and communication needs through advanced manufacturing and innovation.
- Mission: To enhance telecommunications infrastructure in India and contribute to defense and allied sectors with reliable, cutting-edge solutions.
Historical Share Price Performance
| Time |
ITI |
Nifty50 Returns |
Sensex Returns |
Industry Returns |
Sector Returns |
| 1 Day |
14.6% |
-0.22% |
-0.14% |
6.48% |
4.57% |
| 1 Week |
28.42% |
2.04% |
2.25% |
15.37% |
11.92% |
| 1 Month |
20.99% |
1.97% |
2.66% |
10.69% |
8.25% |
| 3 Months |
27.3% |
-0.92% |
0.51% |
14.75% |
9.24% |
| 6 Months |
23.75% |
5.73% |
6.39% |
33.04% |
31.56% |
| 1 Year |
25.08% |
17.43% |
16.86% |
53.86% |
56.25% |
| 3 Year |
227.49% |
40.95% |
39.13% |
268.25% |
205.79% |
| 5 Years |
322.62% |
106.55% |
101.75% |
1,014.11% |
857.27% |
| 10 Years |
1,005.41% |
191.82% |
190.18% |
1,073.66% |
895.99% |
Revenue Mix
ITI Ltd derives its revenue primarily from the following segments:
1. Telecommunication Equipment and Services: The largest contributor to ITI's revenue includes switching systems, optical fiber solutions, and associated equipment.
2. Defense Projects: ITI is involved in key defense communication projects, including the Army Static Switched Communication Network (ASCON) Phase IV, valued at ₹8,280.36 crore.
3. Other Services: Ancillary revenue streams include servicing equipment and providing related solutions.
For FY24, the company reported:
- Total Revenue from Operations: ₹1,26,363 lakh
- Telecommunications and Services Contribution: ~80%
- Defense Projects Contribution: ~20%
Products and Services
ITI’s offerings span across multiple domains:
1. Telecommunications Products: Manufacturing and servicing of switching systems, transmission equipment, and networking solutions.
2. Defense Communication Systems: Providing secure and robust communication infrastructure for military applications.
3. Digital Infrastructure: Optical fiber networks, data centers, and Internet of Things (IoT) solutions.
4. Project Execution: ITI has an extensive role in turnkey projects like BharatNet and Smart City initiatives.
Financial Metrics (FY24)
| Metric |
Value |
Remarks |
| Revenue from Operations |
₹1,26,363 lakh |
Declined by ~9% YoY due to delays in execution of certain projects |
| Net Loss |
₹56,892 lakh |
Loss widened due to higher finance costs and operational inefficiencies |
| Other Income |
₹4,450 lakh |
Includes interest and miscellaneous earnings |
| Total Expenses |
₹1,87,719 lakh |
Reflects rising costs for materials and services, coupled with employee expenses. |
| EPS |
₹(5.93) |
Declined due to increased losses |
| Order Book |
₹11,927 crore |
Provides strong visibility of future revenues |
Shareholding Pattern
As of Sept 2024, ITI's shareholding structure demonstrates a strong government presence:
| Summary |
Sep 2024 |
Jun 2024 |
Mar 2024 |
Dec 2023 |
Sep 2023 |
Jun 2023 |
May 11, 2023 |
Mar 2023 |
Dec 2022 |
Sep 2022 |
Sep 28, 2022 |
Jun 2022 |
| Promoter |
90% |
90% |
90% |
90.3% |
90.3% |
90.3% |
90.3% |
90.2% |
90.2% |
90.1% |
90.2% |
90.1% |
| FII |
0.0% |
0.1% |
0.1% |
0.1% |
0.1% |
0.1% |
0.1% |
0.1% |
0.1% |
0.1% |
0.1% |
0.1% |
| DII |
7.9% |
7.9% |
7.9% |
7.6% |
7.6% |
7.6% |
7.6% |
7.7% |
7.7% |
7.8% |
7.7% |
7.8% |
| Public |
2.0% |
2.0% |
2.0% |
2.0% |
2.0% |
2.0% |
2.0% |
2.0% |
2.0% |
2.1% |
2.0% |
2.1% |
Peer Comparison
| Stock |
Current Price |
PE TTM Price to Earnings |
Market Capitalization |
Dividend yield 1yr % |
Net Profit Qtr |
Net Profit Annual YoY Growth % |
Operating Revenue Qtr |
Revenue Growth Qtr YoY % |
Price to Book Value |
| ITI Ltd. |
368.1 |
-70.5 |
35370.25 |
0.00% |
-70.33 |
-58.10% |
1016.2 |
312.31% |
19.82 |
| Tejas Networks Ltd. |
1337.15 |
51.68 |
23490.76 |
0.00% |
275.18 |
272.97% |
2811.26 |
610.00% |
7.6 |
| Optiemus Infracom Ltd. |
738 |
93.4 |
6336.26 |
0.00% |
13.73 |
35.54% |
476.58 |
73.71% |
14.86 |
| Avantel Ltd. |
167.7 |
69.44 |
4079.63 |
0.12% |
22.9 |
95.82% |
77.42 |
42.49% |
24.86 |
| GTL Infrastructure |
2.32 |
-3.6 |
2971.71 |
0.00% |
-214.05 |
62.50% |
336.38 |
-4.10% |
-0.56 |
| ADC India Communications |
1860 |
29.5 |
855.6 |
1.61% |
8.72 |
153.03% |
50.79 |
5.59% |
12.08 |
| Kore Digital Ltd. |
1659.35 |
41.09 |
665.07 |
0.00% |
2.24 |
256.72% |
41.05 |
289.75% |
8.89 |
Insights:
- ITI's negative margins highlight operational challenges compared to its peers.
- Strong competition from established players like BEL and HFCL, which operate with better profit margins and execution capabilities.
- Opportunities lie in differentiation through innovative defense and telecom solutions.
SWOT Analysis
| Strengths |
Weaknesses |
| - Backing by the Government of India. |
- Sustained financial losses impacting market sentiment. |
| - Robust order book providing long-term revenue visibility. |
- High inventory and working capital requirements. |
| - Expertise in telecommunications and defense communication systems. |
- Dependence on a limited number of clients, primarily government entities. |
| Opportunities |
Threats |
| - Expansion into digital infrastructure and 5G rollouts. |
- Rising competition from private and global players in similar domains. |
| - Government initiatives like "Make in India" and "Aatmanirbhar Bharat." |
- Regulatory and compliance challenges affecting project timelines. |
| - Diversification into IoT and Smart City projects. |
- Delays in receiving payments from government and other clients. |
Additional Insights
1. Strategic Importance: As a PSU, ITI plays a key role in fulfilling India's self-reliance goals in communication and defense sectors.
2. Growth Catalysts: Government initiatives like BharatNet and Make in India provide growth avenues for ITI in digital infrastructure.
3. Operational Challenges: Legacy inefficiencies, high finance costs, and delays in project execution remain critical areas for improvement.
Conclusion
ITI Ltd has a significant role in India's telecommunications and defense landscapes. Despite financial hurdles, its robust order book, government support, and strategic initiatives in digital infrastructure and IoT signal growth potential. To capitalize on these opportunities, ITI must improve operational efficiencies, optimize cost structures, and strengthen execution capabilities. With these measures, ITI can solidify its position as a key player in India's industrial transformation.
Sources:
- ITI Limited Audited Financial Results for FY24.
- Tijori Finance, Trendlyne
Discalimer!
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