Telecom Stocks React to Customs Duty Hike

Shares of telecom infrastructure firms experienced mixed results following the government's announcement of a customs duty increase on certain telecom equipment. The Union Budget 2024-25 included measures aimed at boosting domestic telecom manufacturing by hiking import duties on specific telecom components and reducing duties on crucial minerals and mobile components.

Shares of telecom infrastructure firms experienced a varied performance on Tuesday, in response to the government's decision to increase the basic customs duty on certain telecom equipment to 15 percent.

On the Bombay Stock Exchange (BSE), HFCL shares dropped 4.21 percent to settle at Rs 112.55 per unit, Vodafone Idea declined by 3.84 percent to Rs 15.28, Tejas Networks fell 3.15 percent to Rs 1,273, and ITI slipped 2.28 percent to Rs 296. Meanwhile, Bharti Airtel saw a marginal dip of 0.06 percent, closing at Rs 1,463.65 per share.

In contrast, Indus Towers' shares climbed 3.06 percent to Rs 434.40, Kavveri Telecom Products increased by 2 percent to Rs 30.11, Shyam Telecom rose 1.95 percent to Rs 14.64, ADC India Communications gained 1.89 percent to Rs 1,845, and Tata Communications inched up 0.16 percent to Rs 1,789.15.

The broader BSE Sensex dipped 0.09 percent, closing at 80,429.04 points.

During the Union Budget presentation, Finance Minister Nirmala Sitharaman proposed increasing the basic customs duty from 10 percent to 15 percent on the printed circuit board assembly of specified telecom equipment to bolster domestic manufacturing. Additionally, she proposed exempting 25 critical minerals used in manufacturing communication equipment from customs duties.

Dixon Technologies' shares fell 3.64 percent to Rs 10,941.95, following a proposal to lower import duties on mobile phones and some components in the interest of consumers.