Partner With Us NRI

Open Free Trading Account Online with ICICIDIRECT

Incur '0' Brokerage upto ₹500

Best 5G stocks to invest in India

3 Mins 24 Feb 2023 0 COMMENT

Much before the DOT approved the free trial of 5G technology in India and followed it up with the 5G auctions, the debate over 5G technology and 5G stocks has been going on in India for quite some time. Most investors are already curious to know about the best 5G stocks in India and the methodology to decide what are the 5G stocks to buy in the stock markets. Obviously, they cannot be seen as traditional telecom players, as technological sophistication, breadth of application and ability to handle scale are much higher in 5G.

With the 5G auctions completed and the big telecom players like Reliance Jio and Bharti Airtel lapping up a chunk of the 5G auctions, the future may be round the corner. From a stock market perspective, we first understand the nuances of 5G technology and then look at proxies as the best 5G tocks to buy in India. Before going to the list of best 5G stocks, here is a quick look at the 5G technology and the 5G market. after all, 5G networks are already active in over 60 countries globally including China, US, EU, South Korea etc.

What is 5G Technology

5G is an abridgement of Fifth Generation, and is the latest global wireless standard. Large swathes of India are already on 4G, but even from here, the transition to 5G is going to be a huge shift in user experience. Telecom technology up to 4G was more of a point-to-point connection. However, 5G can handle scale with speed and thus bring even machines and devices into this loop, apart from users. 5G as a technology is much more suited to high end cloud computing, artificial intelligence, machine learning, Natural Language Processing, Internet of Things (IOT) etc.

Expected 5G market size 

The size of the 5G market will depend largely on the quantum and quality of investments. Based on preliminary estimates, the 5G market is estimated at $55 billion currently and expected to grow nearly 5-fold to $250 billion by the year 2026. In short, the potential for 5G and its applications in India are huge and once it attains critical mass, the growth from then on can be virtually exponential.

Best 5G stocks to invest in India 

Since 5G is still an evolving technology, the market has to be looked at from multiple perspectives. Here are a few stocks that can help leverage the 5G shift in India.

Tejas Networks

Sector - Telecom Equipment / Accessories

52-week High / Low
Rs773.00 / Rs359.50

EPS (Rs-4.74) ROE (-2.72%)

CMP – Rs623.80

MCAP – Rs9,526 crore

P/E (N.A.) P/BV (3.58)

Tejas Networks is majority held by Tata Sons and manufactures telecom equipment that are 5G compatible. It has a portfolio of patented 5G products.

Tech Mahindra

Sector – Software and Consulting

52-week High / Low
Rs1,837.75 / Rs944.10

EPS (Rs45.33) ROE (17.57%)

CMP – Rs1,020.85

MCAP – Rs99,380 crore

P/E (22.52) P/BV (3.96)

Tech Mahindra started offering IT solutions to British Telecom and has maintained its leadership in the telecom software space. It offers value added IT-enabled services to the telecom sector and one of the big beneficiaries of the shift to 5G.

Bharti Airtel

Sector – Telecom and software services

52-week High / Low
Rs877.10 / Rs629.05

EPS (Rs-2.86) ROE (-2.03%)

CMP – Rs822.05

MCAP – Rs457,325 crore

P/E (N.A.) P/BV (5.84)

Bharti has been first of the block to launch 5G telecom services in select geographies, although it may not have been as aggressive as Jio in spectrum bidding. With over one-third market share in telecom in India and a very strong Africa franchise, Airtel’s 5G enabled digital services could be the added booster. Bharti Airtel was the only telecom company that managed to survive the pricing onslaught of Jio and has even overcome the regulatory challenges pertaining to Adjusted Gross Revenues and Spectrum Usage Charges.

Reliance Industries

Sector – Digital, Telecom, Retail and Hydrocarbons

52-week High / Low
Rs2,855.00 / Rs2,181.00

EPS (Rs63.96) ROE (8.99%)

CMP – Rs2,565.10

MCAP – Rs17,35,406 crore

P/E (40.11) P/BV (3.60)

After petchem, oil and retail; Reliance is now a leader in telecom and digital solutions too. It operates through Reliance Jio. Its public issue is expected some time in the next 3-4 years. Despite its size in terms of revenues and market cap, Reliance has the best ecosystem to deploy smooth 5G experience and related services.

Sterlite Technologies

Sector – Telecom Services

52-week High / Low
Rs299.45 / Rs128.60

EPS (Rs-3.62) ROE (-7.94%)

CMP – Rs187.05

MCAP – Rs7,450 crore

P/E (N.A.) P/BV (4.11)

Sterlite Technologies is part of the Anil Agarwal group. While it started off with telecom cables, it has now transitioned into offering 5G ready end-to-end solutions for enterprises. Sterlite offers 5G services ranging from design, deployment, optical interconnect, VAS, network software and system integration.

Disclaimer: ICICI Securities Ltd. (I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and Member of Multi Commodity Exchange of India Ltd. (Member Code: 56250) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Ms. Mamta Shetty, Contact number: 022-40701022, E-mail address: complianceofficer@icicisecurities.com. Investments in securities markets are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investors should consult their financial advisers whether the product is suitable for them before taking any decision. The contents herein mentioned are solely for informational and educational purpose.