News
November 21, 2025
India’s telecom sector enters multi-year growth cycle; upstream oil stocks back in favour: JM Financial
India’s telecom sector is entering a multi-year growth cycle driven by strong ARPU expansion, consolidation, and easing capex, says JM Financial’s Dayanand Mittal. Bharti Airtel and Reliance Jio are set to dominate as free cash flows surge. Meanwhile, upstream oil companies like Oil India and ONGC emerge as top picks amid attractive valuations and strong production growth despite soft crude prices.
**India's Telecom Sector Poised for Years of Growth, Oil Stocks See Renewed Interest**
The Indian telecom industry is on the cusp of a significant growth phase, fueled by rising average revenue per user (ARPU), market consolidation, and a potential slowdown in capital expenditure, according to a recent analysis by JM Financial. Dayanand Mittal, an analyst at JM Financial, highlighted these factors as key drivers for a multi-year expansion cycle within the sector.
The report indicates that Bharti Airtel and Reliance Jio are strategically positioned to dominate the market in the coming years. A crucial element driving this dominance is the expected surge in free cash flows for these companies. Increased ARPU, meaning customers are spending more on telecom services, directly translates to healthier bottom lines. This, coupled with a more streamlined capital expenditure strategy, allows these companies to generate substantial cash, which can then be reinvested for further growth and innovation.
While the telecom sector is buzzing with optimism, the upstream oil sector is also witnessing a resurgence in investor interest. JM Financial identifies Oil India and ONGC (Oil and Natural Gas Corporation) as particularly attractive investment opportunities. Despite the current environment of relatively soft crude oil prices, these companies are favoured due to their compelling valuations and robust production growth.
The attractiveness of upstream oil companies lies in their ability to generate profits even with moderate crude oil prices. Their strong production growth further bolsters their financial performance, making them appealing to investors seeking value and stability. This renewed interest signals a potential shift in investment strategies, with investors recognizing the long-term potential of these established oil producers.
The JM Financial report paints a picture of a dynamic Indian market, with both the telecom and upstream oil sectors presenting compelling growth narratives. While Bharti Airtel and Reliance Jio are expected to lead the telecom revolution, Oil India and ONGC are poised to capitalize on their production capabilities in the energy sector. The coming years will be crucial in observing how these trends unfold and shape the Indian economy.
The Indian telecom industry is on the cusp of a significant growth phase, fueled by rising average revenue per user (ARPU), market consolidation, and a potential slowdown in capital expenditure, according to a recent analysis by JM Financial. Dayanand Mittal, an analyst at JM Financial, highlighted these factors as key drivers for a multi-year expansion cycle within the sector.
The report indicates that Bharti Airtel and Reliance Jio are strategically positioned to dominate the market in the coming years. A crucial element driving this dominance is the expected surge in free cash flows for these companies. Increased ARPU, meaning customers are spending more on telecom services, directly translates to healthier bottom lines. This, coupled with a more streamlined capital expenditure strategy, allows these companies to generate substantial cash, which can then be reinvested for further growth and innovation.
While the telecom sector is buzzing with optimism, the upstream oil sector is also witnessing a resurgence in investor interest. JM Financial identifies Oil India and ONGC (Oil and Natural Gas Corporation) as particularly attractive investment opportunities. Despite the current environment of relatively soft crude oil prices, these companies are favoured due to their compelling valuations and robust production growth.
The attractiveness of upstream oil companies lies in their ability to generate profits even with moderate crude oil prices. Their strong production growth further bolsters their financial performance, making them appealing to investors seeking value and stability. This renewed interest signals a potential shift in investment strategies, with investors recognizing the long-term potential of these established oil producers.
The JM Financial report paints a picture of a dynamic Indian market, with both the telecom and upstream oil sectors presenting compelling growth narratives. While Bharti Airtel and Reliance Jio are expected to lead the telecom revolution, Oil India and ONGC are poised to capitalize on their production capabilities in the energy sector. The coming years will be crucial in observing how these trends unfold and shape the Indian economy.
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Business