ITI Share Price Jumps 8%, Up Over 40% in May; What Should Investors Do With This PSU Stock?

Mumbai, May 29, 2025 — Shares of ITI Ltd, the state-run telecom equipment maker, surged by over 8% in intraday trading on Wednesday, continuing their robust rally through May. The stock has climbed more than 40% this month, outperforming both the Nifty 50 and the broader PSU basket. This sharp move has prompted investors to reassess the stock’s future potential — and whether now is the time to buy, hold, or take profits.

A Rally Fueled by Optimism and Policy Support

The surge in ITI shares is underpinned by a mix of sectoral optimism, improving financial metrics, and renewed focus on public sector enterprises (PSEs) by the government. With the Centre aggressively pushing digital infrastructure and indigenous manufacturing under the Digital India and Atmanirbhar Bharat initiatives, ITI — as one of India’s oldest telecom PSUs — is beginning to attract renewed investor interest.

“PSU stocks have been re-rated in recent months, and ITI is riding that wave, aided by fresh orders and a pickup in telecom infrastructure investment,” said Rahul Shah, Vice President of Equity Research at Motilal Oswal Financial Services. “There’s a thematic shift happening where investors are looking beyond traditional growth names and turning to value plays with turnaround potential.”

Strong Volume Action and Technical Breakout

Market participants have taken note of the high trading volumes in ITI shares on both the NSE and BSE, suggesting sustained institutional participation. The stock broke through a key resistance level of ₹180 this week, and analysts see further upside if it sustains above this level.

According to Mehul Kothari, AVP - Technical Research at Anand Rathi, “The breakout on the weekly charts indicates a bullish reversal. If momentum continues, ITI could test levels of ₹200–₹210 in the near term. However, a trailing stop-loss below ₹165 is advisable for those entering fresh positions.”

Fundamentals Still Catching Up

While the price rally is impressive, some analysts remain cautious due to ITI's still-challenging fundamentals. The company has posted moderate revenue growth, but profitability remains under pressure due to legacy issues and high operational costs.

For Q4 FY25, ITI Ltd reported a net profit of ₹12.5 crore, compared to a loss of ₹18 crore in the same quarter last year. Revenues stood at ₹245 crore, marking a 20% year-on-year increase. The turnaround is attributed to higher order execution and cost-control measures.

“ITI has shown signs of a gradual recovery, but it still has a long way to go in terms of sustainable growth,” said Siddharth Sedani, Head of Equity Product at ICICI Direct. “It is a classic case of a PSU stock with deep value but also deep restructuring needs. Investors need to be patient and cautious.”

Government Push and Order Wins Key to Growth

One of the key growth drivers for ITI has been recent government orders in the telecom and defense communication space. The company is working on modernization projects, including 4G/5G infra components and secure communication systems for the Indian Armed Forces.

Earlier this month, ITI secured a ₹350 crore order from BSNL for network infrastructure rollout under the BharatNet Phase II project. The company is also expected to participate in fresh bids under the PLI (Production-Linked Incentive) scheme for telecom equipment manufacturing.

“ITI is at the right place at the right time. The government’s emphasis on indigenization in telecom and defense offers a strong tailwind. But execution will be the real test,” said Naveen Kulkarni, Chief Investment Officer at Axis Securities.

What Should Investors Do Now?

Given the sharp rally, investors are split between riding the momentum and booking profits. Here’s what different investor types might consider:

For Short-Term Traders:

• Continue to ride the rally with a strict stop-loss below ₹165.

• Watch for profit-booking near ₹200 levels; risk-reward becomes less favorable beyond that point unless fresh triggers emerge.

For Long-Term Investors:

• Consider accumulating on dips, especially if the stock retraces to the ₹150–₹160 range.

• Long-term prospects hinge on execution, order inflows, and policy support; risk tolerance and patience are essential.

For Conservative Investors:

• Wait for consistent quarterly results before entering.

• Monitor free cash flow improvements and margin expansion as signs of true turnaround.

Conclusion: Momentum Is Strong, But Fundamentals Must Follow

ITI Ltd’s recent surge reflects a growing interest in PSU stocks and India’s push for self-reliance in strategic sectors. The company is showing early signs of a turnaround, aided by government contracts and telecom infrastructure projects. However, fundamentals are still stabilizing, and execution remains a key challenge.

For now, the stock presents an opportunity for informed, risk-tolerant investors. While the rally may continue in the short term, long-term success will depend on how well ITI can transform into a modern, competitive telecom player.