Telecom infra stocks end on mixed note after govt hikes customs duty

New Delhi, Jul 23 (PTI) Shares of telecom infrastructure on Tuesday closed on a mixed note after the government said it will increase the basic customs duty on specified telecom equipment to 15 per cent.

On the BSE, shares of HFCL plunged 4.21 per cent to end at Rs 112.55 apiece, Vodafone Idea declined 3.84 per cent at Rs 15.28, Tejas Networks slumped 3.15 per cent at Rs 1,273 and ITI slipped 2.28 per cent to Rs 296.

The scrip of Bharti Airtel fell marginally by 0.06 per cent to close at Rs 1,463.65 per piece on the bourse.

On the other hand, shares of Indus Towers jumped 3.06 per cent to settle at Rs 434.40, Kavveri Telecom Products climbed 2 per cent at Rs 30.11, Shyam Telecom rose 1.95 per cent at Rs 14.64, ADC India Communications gained 1.89 per cent to Rs 1,845 and Tata Communications up 0.16 per cent to finish at Rs 1,789.15 on the BSE.

The 30-share BSE Sensex dipped 73.04 points or 0.09 per cent to settle at 80,429.04.

Presenting the Union Budget for fiscal year 2024-25 on Tuesday, Finance Minister Nirmala Sitharaman said that the government has proposed to increase import duty on motherboards, technically called printed circuit boards, by 5 per cent in the Union Budget 2024-25 to boost domestic telecom gear manufacturing.

"To incentivise domestic manufacturing, I propose to increase the BCD (Basic Customs Duty) from 10 per cent to 15 per cent on PCBA (printed circuit board assembly) of specified telecom equipment," Sitharaman said.

The increase in basic customs duty for telecom PCB assembly comes with the exemption of critical minerals that are used in the manufacturing of communication equipment.

The finance minister proposed to fully exempt 25 minerals, such as lithium, copper, cobalt and rare earth elements, which are critical for sectors like nuclear energy, renewable energy, space, defence, telecommunications, and high-tech electronics from customs duties and reduce basic customs duty on two of them.

Meanwhile, the scrip of Dixon Technologies fell 3.64 per cent to close at Rs 10,941.95 after Sitharaman in her budget speech proposed slashing import duty on mobile phones, chargers and some components that are used for the manufacturing of handsets.

Shares of Syrma SGS Technology slipped 2.29 per cent to end at Rs 459.85 per piece on the BSE.

She said with a three-fold increase in domestic production and an almost 100-fold jump in exports of mobile phones over the last six years, the Indian mobile phone industry has matured.

"In the interest of consumers, I now propose to reduce the BCD on mobile phone, mobile PCBA and mobile charger to 15 per cent," Sitharaman said.

Earlier BCD on mobile phones, chargers and motherboards was 20 per cent. PTI HG HG SHW