ITI - ITI

📊 NSE: ITI 🏢 Telecommunications - Equipment 📅 Last Updated: 12/14/2025 8:28

💰 Financial Performance

Revenue Growth by Segment

Total sales turnover grew by 165.54% YoY, reaching INR 4,323 Cr in FY25 compared to INR 1,628 Cr in FY24. The BSNL 4G project was a primary driver, contributing approximately 50% of the total revenue in FY25.

Geographic Revenue Split

Not explicitly disclosed by percentage, but the company maintains a pan-India presence through 5 manufacturing units (Bengaluru, Naini, Rae Bareli, Mankapur, Palakkad) and 11 MSP centers serving national projects like BharatNet and ASCON.

Profitability Margins

Operating Profit Margin improved from -25.00% in FY24 to -0.78% in FY25. Net Profit Margin improved from -45.03% in FY24 to -6.45% in FY25, driven by higher revenue contribution and better control over fixed overheads.

EBITDA Margin

EBITDA margin remained negative but showed significant recovery from -25% to -0.78% YoY. The company reported a net loss of INR 233.15 Cr for FY25 and a net loss of INR 117.54 Cr for the half-year ended September 30, 2025.

Capital Expenditure

Under the 2014 revival plan, GoI sanctioned a total capital grant of INR 2,264 Cr. As of April 2025, INR 1,191.56 Cr has been received. A further capex support of INR 105 Cr is sanctioned for FY26, with INR 200 Cr projected for FY27.

Credit Rating & Borrowing

Long-term rating upgraded to [ICRA]BB (Stable) from [ICRA]BB- (Stable) in August 2025. Short-term rating reaffirmed at [ICRA]A4. Acuité assigned BB (Stable) and A4+. Interest coverage ratio stood at 1.08 in FY25, down from 2.17 in FY24 due to increased interest costs.

⚙️ Operational Drivers

Raw Materials

Electronic components, mechanical parts, and telecom hardware modules (specific % per material not disclosed, but manufacturing and trading of telecom equipment are the core cost drivers).

Capacity Expansion

Current operations span 5 manufacturing locations and 1 R&D center. Expansion is focused on technology upgrades for 4G/5G equipment and smart meters rather than physical footprint expansion.

Raw Material Costs

Not disclosed as a specific % of revenue, but the company is shifting toward subcontracting and outsourcing with technology partners to drive cost savings.

Manufacturing Efficiency

Inventory turnover ratio improved significantly to 16.26 in FY25 from 6.50 in FY24, indicating more efficient stock management and higher sales velocity.

📈 Strategic Growth

Expected Growth Rate

20-25%

Growth Strategy

Execution of a robust INR 19,000 Cr order book as of June 2025, including BharatNet Phase III and ASCON Phase IV. Strategy involves converting INR 2,034.80 Cr of unbilled revenue into billed revenue within 12 months and diversifying into smart energy meters and 4G/5G technology.

Products & Services

4G/5G telecom equipment, smart energy meters, encryption products for Defence, BharatNet networking equipment, and ICT turnkey solutions.

Brand Portfolio

ITI Limited (Public Sector Undertaking).

New Products/Services

Smart energy meters and 4G network equipment for BSNL; expected to significantly contribute to the INR 19,000 Cr order book execution.

Market Expansion

Targeting strategically important ICT projects under 'Make in India' and 'Digital India' initiatives, specifically focusing on Defence and Rural Development (BharatNet).

Market Share & Ranking

Not disclosed in available documents, but holds 'preferred supplier status' and a priority quota for major Government telecom tenders.

Strategic Alliances

Maintains a Joint Venture (ISL) where ITI holds 49.06% equity; partners with technology providers for subcontracting and outsourcing to reduce social overheads.

🌍 External Factors

Industry Trends

The industry is shifting from pure manufacturing to integrated technology solutions (ICT). ITI is positioning itself as a 'Telecom Technology Company' by upgrading infrastructure for 4G/5G and smart city projects.

Competitive Landscape

Competes with domestic and international telecom equipment vendors for Government tenders, but benefits from a priority quota and long-standing PSU relationships.

Competitive Moat

Moat is derived from ~90% Government ownership and strategic importance to national security (Defence projects). This ensures continued financial support and access to large-scale PSU contracts, though it is challenged by weak internal controls.

Macro Economic Sensitivity

Highly sensitive to Government fiscal policy and telecommunication sector regulations. Revival depends on continued GoI financial support and grants.

Consumer Behavior

Shift toward digital connectivity and smart infrastructure in India is driving demand for ITI's BharatNet and smart meter offerings.

Geopolitical Risks

Exposure to global supply chain disruptions for electronic components; however, 'Make in India' status provides a buffer against import restrictions.

⚖️ Regulatory & Governance

Industry Regulations

Subject to DoT regulations and SEBI listing requirements. Currently facing challenges with non-compliance regarding statutory and listing obligations as noted by auditors.

Environmental Compliance

No pending show cause or legal notices from CPCB/SPCB as of the end of FY25, indicating compliance with environmental regulations.

Legal Contingencies

Statutory audit for FY25 resulted in a 'Disclaimer of Opinion' due to inadequate internal controls and premature revenue recognition. The company has unresolved legal disputes and doubts regarding its status as a 'going concern' due to sustained losses.

⚠️ Risk Analysis

Key Uncertainties

Execution delays in large-scale turnkey projects could further stretch the working capital cycle (currently 740 days GCA) and impact liquidity.

Geographic Concentration Risk

Operations are entirely India-centric, with 95% of revenue tied to Indian Government entities.

Third Party Dependencies

High dependency on technology partners for subcontracting and outsourcing to manage manufacturing costs and technical requirements.

Technology Obsolescence Risk

Rapid shifts in telecom technology (4G to 5G and beyond) require constant R&D investment to prevent manufacturing infrastructure from becoming obsolete.