The communication sector is vital to India’s growth, as the country is the second largest telecom market globally. In fact, as of 30 June 2024, its subscriber base stood at 1.096 billion suscribers, both wireline and wireless. With a current valuation of around ₹3 trillion, it presents significant investment opportunities.The industry is all set for further development, driven by increasing demand for digital services, 5G adoption, and expanding network infrastructure.
The government’s focus on cutting-edge technologies like satellite communication is further driving the sector’s advancement, with an expected growth at a CAGR of approximately 7-9% by FY24. These factors are bringing communications sector stocks in the spotlight. In this post, we’ll explore the benefits of these stocks and India’s top 10 names in the sector in the stock market.
Bharti Airtel Ltd
| Market Cap₹9,22,859 C | CMP ₹ 1,543 | All-time High₹ 1,617 | PE Ratio77.3 | 1 yr CAGR Stock Price 74% | ROCE 13.1% |
Bharti Airtel is a prominent name in communications sector stocks globally. Headquartered in New Delhi, it has a network spanning the USA, Europe, Africa, the Middle East, Asia-Pacific, India, and SAARC regions, they are considered a premier provider of ICT services. The company is one of the top 3 mobile service providers worldwide in terms of subscribers. Our diverse product portfolio, strategically located submarine cables, and satellite network, extending across 365,000+ RKMs in 50 countries and 5 continents, enable us to deliver cutting-edge digital services.
In Q1FY25, Bharti Airtel has posted consolidated quarterly revenues of ₹ 38,506 crore, which was up 2.8% YoY and 2.4% QoQ. The company’s EBITDA during the same period stands ₹19,944 Crore, compared to ₹19,746 crore in Q1FY24.
Vodafone Idea Ltd
| Market Cap ₹ 91,840 Cr. | CMP ₹ 13.5 | All-time High ₹ 19.2 | PE Ratio – | 1 yr CAGR Stock Price 20% | ROCE (FY23) 3.61 % |
Vodafone Idea Limited is an Aditya Birla and the Vodafone Group joint venture. Operating across 22 service areas in India, the leading name in communications sector stocks provides voice and data services on 2G, 3G, and 4G technologies. In July 2022, Vodafone Idea acquired 5G spectrum in Mid band (3300 MHz) and mmWave (26 GHz) and is actively working towards launching 5G services. Its subscriber base increased to 126.7 million in Q1FY25 from 122.9 million in Q1FY24
The company expects about 15% increase in their data capacity, and an increase in 4G population coverage by ~16 million by end Sep 24. Its revenue from Operations in Q4FY24 was ₹10,606 crores while it was ₹10,508 crores in Q1FY25. The EBITDA in Q4FY24 stood at ₹4,335.8 crores and ₹4,204.7 crores in Q1FY25. Further, its quarterly EBITDA grew by 4.2% on YoY basis.
Tata Communications Ltd
| Market Cap₹56,972 Cr | CMP ₹1997.30 | All-time High₹ 2,085 | PE Ratio 69.2 | 1 yr CAGR Stock Price 3% | ROCE (FY23) 17.6 % |
A leading digital ecosystem enabler, Tata Communications empowers businesses worldwide to achieve digital transformation. Focusing on borderless growth, innovation, and efficiency, Tata Communications offers solutions that connect enterprises to 80% of the world’s cloud giants and 4 out of 5 mobile subscribers. Leveraging its global network and cutting-edge infrastructure, Tata Communications drives the next level of intelligence in cloud, mobility, IoT, collaboration, security, and network services.
Besides considering Tata Communication share price, you must know that the company clocked ₹20,969 crore in revenue in FY2024 compared to ₹17,838.26 crore in FY2023. The reported EBITDA was ₹4,230 in FY2024 and the company witnessed a PAT of ₹968 crore.
Bharti Hexacom Ltd
| Market Cap₹61383.34 Cr | CMP ₹1227.00 | All-time High₹ 1,369 | PE Ratio 96.1 | 1 yr CAGR Stock Price – | ROCE (FY23) 14.3 % |
Bharti Hexacom is a communications solutions provider in 17 countries spanning South Asia and Africa. It has a comprehensive range of services, including mobile, fixed line telephone, and broadband to customers in Rajasthan and Northeastern telecommunication circles. Its spectrum portfolio has a pool of mid-band spectrum holding (1800/2100/2300 MHz bands) to effectively deploy 5G Plus services on non-standalone network architecture.
The company’s Revenue from Operations in FY2023-24 was registered at ₹7,088.8 crores , with an 8% y-o-y increase. The company’s EBITDA ₹3.490.5 crores, with a 21% increase, while its PAT was ₹504.4 crores.
Tata Teleservices (Maharashtra) Ltd
| Market Cap₹18,104 Cr | CMP₹92.7 | All-time High₹111 | PE Ratio – | 1 yr CAGR Stock Price-8% | ROCE (FY23)47.9 % |
Tata Teleservices (Maharashtra) Limited (TTML) is a leading player in the connectivity and communication solutions market, serving enterprise customers through its brand Tata Tele Business Services (TTBS). TTML offers a comprehensive portfolio of ICT services, including connectivity, collaboration, cloud, security, IoT, and marketing solutions.
Railtel Corporation of India Ltd
| Market Cap₹ 15,306 Cr. | CMP ₹ 477 | All-time High₹ 618 | PE Ratio57.3 | 1 yr CAGR Stock Price92% | ROCE (FY23)20.2 % |
A Mini Ratna (Category-I) Central Public Sector Enterprise, RailTel is among the largest neutral telecom infrastructure providers, owning a pan-India optic fiber network that covers several towns, cities, and rural areas. A robust entity among communications sector stocks, it has a strong a reliable network of 61,000+ RKM of Optic fibre. With its high-capacity network, RailTel has been chosen to implement various mission-mode telecom projects for the Government of India. Along with the Indian Railways, it is transforming railway stations into digital hubs. Together, they provide public Wi-Fi at a total of 6,108 railway stations across the country.
Railtel’s total Revenue for FY 2023-24 was ₹2,622 crore, as it registered an EBITDA of ₹335 crore and a PAT of ₹246 crore.
Hathway Cable & Datacom Ltd
| Market Cap₹ 3,783 Cr | CMP ₹ 21.4 | All-time High ₹ 28.0 | PE Ratio39.5 | 1 yr CAGR Stock Price15% | ROCE (FY23)2.29 % |
Hathway Cable & Datacom Ltd is a leading cable broadband service providers in India. It offers high-speed cable broadband services across various cities and is also a significant player in the cable television segment. Hathway has a strong presence in the digital cable TV and broadband internet markets.
Hathway Cable & Datacom Ltd had a total revenue of ₹1980.97 crore o crore in the year that ended March 2024, which increased from ₹18,585 crore in the same period of 2023. Its operating EBITDA stands at ₹322.5 crore against ₹315.48 crore the previous year and PAT is ₹99.29 crore versus last year’s ₹65.37 crore.
Mahanagar Telephone Nigam Ltd
| Market Cap₹ 3,534 Cr | CMP ₹ 56.1 | All-time High ₹ 102 | PE Ratio- | 1 yr CAGR Stock Price115% | ROCE (FY23)-8.26 % |
Mahanagar Telephone Nigam Ltd (MTNL) is a state-owned telecommunications service provider in of Mumbai and Delhi, and one of the top communication services stocks. It offers fixed-line telephone, mobile services, broadband, and enterprise solutions. Despite facing financial challenges, MTNL continues to be a key player in the Indian telecom sector.
MTNL logged in a total revenue of ₹935 crore for as of 31 March 2023, which reduced to ₹798 crores on 31 March 2024.
OnMobile Global Ltd
| Market Cap₹ 887 Cr. | CMP ₹ 83.5 | All-time High ₹ 128 | PE Ratio- | 1 yr CAGR Stock Price-30% | ROCE (FY23)4.84 % |
OnMobile Global Ltd is a global leader in mobile entertainment services. It provides a wide range of services including ringback tones, mobile radio, and other value-added services to telecom operators worldwide. OnMobile has a strong presence in several countries and continues to innovate in the mobile entertainment space.
The company’s total revenue in FY2023-24 was recorded at ₹533.4 crores, while it was ₹535.8 crore the previous year. OnMobile delivered 2.2X EBITDA (₹28.3 crores) in FY24 versus ₹12.7 crores in FY23. Similarly, its PAT was ₹15.3 crores in FY24, as opposed to ₹6.8 crore FY23.
Reliance Communications Ltd
| Market Cap₹578 Cr. | CMP ₹2.09 | All-time High₹ 2.49 | PE Ratio- | 1 yr CAGR Stock Price19% | ROCE (FY23)- |
Data sourced from Screener.in, as of 10 Sep 2024
Reliance Communications Ltd, part of the Reliance Group, was once one of India’s largest telecom operators. It offered a wide range of services including wireless, wireline, broadband, and enterprise solutions. However, the company has faced significant financial difficulties in recent years, leading to a decline in its operations.
On a consolidated basis in FY23, the company earned total revenues of ₹505 crore and the net loss after tax recorded was ₹277 crore, while total operating expenditure stood at ₹498 crore.
Why Invest in Communications Stocks?
Investing in one of the top stocks in communication sector has the following benefits:
- Essential Services: Telecom companies provide essential services that are in constant demand, ensuring a steady stream of revenue.
- Growth Potential: Advancements in technology, such as 5G and fiber optics, are driving growth in the sector.
- Dividend Income: Many telecom companies offer attractive dividend payouts, making them suitable for income-focused investors.
- Defensive Characteristics: Telecom stocks tend to be less volatile than other sectors, providing a degree of protection during market downturns.
Factors to Consider Before Investing
Your equity investment management exercise must consider the following aspects before investing in these stocks.
- Financial Performance: Analyze the company’s financial health, including revenue growth, profitability, and debt levels.
- Market Share: Assess the company’s market position and competitive advantage.
- Regulatory Environment: Understand regulations and their potential impact on the company’s operations.
- Technological Advancements: Evaluate the company’s ability to adapt to emerging technologies and trends.
- Dividend Policy: If dividend income is prioritized, consider the company’s dividend history and payout ratio.
Conclusion
Investing in communications stocks can be rewarding, especially with the help of a financial advisory. By carefully analyzing the abovementioned factors, you can identify promising opportunities and build a diversified portfolio. It’s essential to conduct thorough research and consider your individual investment goals before making any investment decisions. A reliable share market advisory firm can help you with the nuances when buying shares in this sector.
FAQs
What is the communications sector stock?
Shares by companies involved in telecommunications, media, and internet services are included in communications sector stocks. This sector encompasses wireless communication, cable and satellite providers, internet service providers, and media conglomerates.
What is the best stock for telecommunications?
Identifying the “best” stock is subjective and depends on individual investment goals and risk tolerance. However, top-performing telecommunications stocks include Tata Telecommunications, MTNL, Reliance Communications, Bharti Airtel, etc. Before making an investment decision, it’s essential to conduct thorough research and consider factors like market trends, financials, and competitive advantage.
What are the largest stocks in the communication services sector?
The largest stocks in the communication services sector vary by market capitalization and can change over time. Currently, some of the largest stocks in this sector include Bharti Airtel, Tata Telecommunications, Reliance Communications, etc. These companies are leaders in their respective sub-industries, but you could also check other players, such as One97 Communications share price.
Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.
I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.
