5G Stocks in India – Industry Overview and Top Stocks!

India’s technological advancement across sectors is significant & the Centre is doing all its bit to be able to further amplify their applications, and likewise, the Centre in the latest budget to soften the roll out of 5G much ahead of the earlier timeline had announced that the center shall then engage in the auction of telecom spectrum in 2022. 

Overview of the Telecommunication Industry

This industry is divided into following subsectors: Infrastructure, Equipment, Mobile Virtual Network Operators, White Space Spectrum, 5G, Telephone service providers & Broadband, whereas over the last seven years the Indian Telecom Tower industry has grown significantly by 65%, while the number of mobile towers increased from 400,000 in 2014 to 660,000 in 2021, and similarly the number of Mobile Base Transceiver Stations have grown rapidly by 187% and increased from 800,000 in 2014 to 2.3 mn in 2021, whereas as per GSMA India is on its way to becoming the second-largest smartphone market globally by 2025 with around 1 billion installed devices & is expected to have 920M unique mobile subscribers by 2025 which will include 88M 5G connections, while India added over 500 Mn new smartphone users over the last decade, and it is expected to have 850 Mn smartphone users by 2026, representing 55% of the total population, whereas the DoT is targeting a combination of 100% broadband connectivity in the villages, 55% fiberisation of mobile towers, average broadband speeds of 25 mbps & 30 lakh kms of optic fibre rollouts by December 2022, and by December 2024 it is looking at 70% fiberisation of towers, and to have a average broadband speeds of 50 Mbps and to spread 50 lakh kms of optic fibre rollouts at a pan-India level.

Top 5G Stocks in India

  • Bharti Airtel Ltd

It is a global telecommunications company with operations in 18 countries across Asia and Africa, while its segments include Mobile Services India, Mobile Services Africa, Mobile Services South Asia, Tower Infrastructure Services, Digital TV Services, Homes Services, Airtel Business and Others, whereas the Mobile Services India segment includes voice and data telecom services provided through wireless technology (2G / 3G / 4G) in India, while the Mobile Services Africa segment includes voice and data telecom services provided through wireless technology (2G / 3G / 4G) offered to customers in Africa, whereas the Mobile Services South Asia segment includes voice and data telecom services provided through wireless technology (2G / 3G) in Sri Lanka, while the Tower Infrastructure Services segment includes setting up, operating and maintaining wireless communication towers in India, and the Digital TV Services segment includes digital broadcasting services provided under the direct-to-home platform.

  • Market Cap- ₹ 425,795 Cr.
  • Current Price- ₹ 740
  • High / Low- ₹ 793 / 629
  • Stock P/E- 86.3
  • Book Value- ₹ 113
  • Dividend Yield- 0.41 %
  • ROCE- 12.0 %
  • ROE- 5.86 %
  • Face Value- ₹ 5.00
  • Vodafone Idea Ltd (VI)

It is an India-based telecom service provider, and the Company is engaged in the business of mobility and long-distance services, it provides pan-India voice & data services across second-generation (2G), third-generation (3G), and fourth-generation (4G) platforms, its business services provide communication solutions to global & Indian corporations, public sector and government bodies, small and medium enterprises, and start-ups, while it offers voice services, broadband services, content & digital offerings, while its other services include entertainment services, such as sports, interactive voice response (IVR)-based content, wireless application protocol (WAP)-based games; voice and short message service based services, such as caller tunes, voice & SMS chat, star talk, expert advice, subscriptions services and utility services, such as missed call alerts, doctor on call and astrology services.

  • Market Cap- ₹ 29,804 Cr.
  • Current Price- ₹ 9.30
  • High / Low- ₹ 16.8 / 7.05
  • Stock P/E-
  • Book Value- ₹ -19.3
  • Dividend Yield- 0.00 %
  • ROCE%-
  • ROE%-
  • Face Value- ₹ 10.0
  • Mahanagar Telephone Nigam Ltd

It is an India-based telecommunication services company, and the Company is a provider of fixed-line telecommunication services in the two Metropolitan Cities of Delhi and Mumbai, its segments include Basic and other services and Cellular services, whereas its mobile services include prepaid, postpaid, third generation (3G) data plans, 3G settings, mobile television, international calling, value-added services, mobile connection requests, & mobile recharge, and it also provides toll-free services, leased circuits, Web hosting, industrial training, toll-free services, universal access numbers, and virtual card calling, whereas it offers mobile services in the city of Delhi including Noida, Gurgaon, Faridabad, Ghaziabad & the Mumbai city along with the areas falling under the Mumbai Municipal Corporation, New Mumbai Corporation, and Thane Municipal Corporation.

  • Market Cap- ₹ 1,553 Cr.
  • Current Price- ₹ 24.6
  • High / Low- ₹ 40.8 / 16.6
  • Stock P/E-
  • Book Value- ₹ -296
  • Dividend Yield- 0.00 %
  • ROCE- -5.20 %
  • ROE%-
  • Face Value- ₹ 10.0
  • Reliance Industries Ltd (Reliance JIO)

It has be noted that Reliance JIO is not a listed company, and it is a part of Reliance Industries, in the year of 2016, RIL launched JIO which turned out to be the disruptive at the telecom industry, while with JIO they introduced 4G services in the Indian market at much lesser prices which were approximately 95% lower than its competitors, while for the first time the voice calls and OTT platforms of the company were offered for free along with its SIM card, it now wants to be the leader in the 5G segment as well, and to do this it has developed a 100 percent home-grown and comprehensive 5G solution, which is fully cloud-native and digitally managed, and the company has successfully conducted trials of connected drones through its indigenous 5G network, and it has partnered with Qualcomm to manufacture critical equipment for the 5G ecosystem in India, while in FY21, RIL reported Rs 4,66,924 cr in revenues out of which Rs 90,287 cr was earned from JIO services, and the net profit of RIL was Rs 49,128 Cr for FY21, it has diversified into other verticals which includes JioMart, JioUPI, JioPOS, and JioSTB out of many.

  • Market Cap- ₹ 1,739,011 Cr.
  • Current Price- ₹ 2,570
  • High / Low- ₹ 2,856 / 2,180
  • Stock P/E- 27.0
  • Book Value- ₹ 1,152
  • Dividend Yield- 0.31 %
  • ROCE- 9.42 %
  • ROE- 8.16 %
  • Face Value- ₹ 10.0
  • HFCL Ltd

It is an India-based company that is primarily engaged in manufacturing of telecommunication equipment, optical fiber cables and intelligent power systems, while the Company is a manufacturer of optical fiber cables, optical transport, power electronics and broadband equipment for the telecommunication industry, it provides solutions for building wireless & optical telecommunication networks, such as optical transport networks (DWDM), rural global system for mobile communications (GSM) networks, broadband access networks, radio backhaul, fiber to the home and in-building solutions, whereas the company serves industries, including telecommunications, homeland security, defense and railways, it has its production facilities at Solan (Himachal Pradesh), Goa, and Chennai (Tamil Nadu) and through this they cater to both Indian and global markets, and its products are also exported to the UK, Eastern Europe, Africa and Middle East, and also the South & Southeast Asian regions.

  • Market Cap- ₹ 10,850 Cr.
  • Current Price- ₹ 78.7
  • High / Low- ₹ 101 / 51.6
  • Stock P/E- 38.6
  • Book Value- ₹ 20.3
  • Dividend Yield- 0.23 %
  • ROCE- 19.2 %
  • ROE- 13.5 %
  • Face Value- ₹ 1.00

Conclusion

These were some of the top 5G technology companies that investors can bet on to be able to ride with the tech-savvy future of India and the world, these companies are gearing themselves up to capitalize on the 5G opportunities, but the investors should pay special attention to the risk-return characteristics of these companies, while one should pay special attention to the debt levels around these companies as they are very high & can become a pain point towards the company’s operations in the future if they are not able to repay it, while this particular situation has happened with Vodafone India Limited, which is still in a bad situation even after the government took an equity stake in the company to make it stay afloat, whereas the company is now in need of funds and is preparing for another fundraising plan, therefore one should consider these factors before deciding on which of these companies to be able to invest in.

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