Specializing in optical networking, wi-fi merchandise, and broadband options, Tejas is betting on these key areas to drive its subsequent section of development.
Strengthening its place, it lately inked a ₹5.3 billion know-how collaboration with NEC Corp. to develop superior 5G and wi-fi options. This partnership offers Tejas entry to NEC’s confirmed 4G/5G core know-how, enhancing its competitiveness in next-gen telecom improvements.
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But, regardless of these development prospects, the inventory tells a unique story.
Tejas Networks’ share worth has tumbled over 40% up to now six months, buying and selling close to its 52-week low of ₹651. Whereas broader market traits have performed a job, weak quarterly outcomes have been a key issue behind the decline.
Tejas Networks Q3FY25 efficiency
Tejas reported Q3 FY25 income of ₹26 billion, marking a 4.7% year-on-year enhance.
Nonetheless, profitability hasn’t saved tempo. Regardless of returning to profitability this quarter after a loss in the identical interval final 12 months, working revenue declined over 30% sequentially, and web revenue fell greater than 40%. This displays ongoing margin pressures.
The corporate can be going through a working capital crunch, with commerce receivables surging to ₹47 billion and stock ranges rising to ₹31.2 billion as a consequence of delayed collections and inventory buildup from ongoing challenge execution.
Whereas Tejas holds a powerful order e book of ₹26.8 billion, efficient monetary administration will probably be vital for sustained profitability.
Margins have fluctuated as a consequence of shifts in Tejas’ product combine, with completely different configurations shipped every quarter. The corporate acknowledged that margins from its first wi-fi challenge with BSNL had been decrease than its conventional wireline enterprise. Nonetheless, as worldwide offers acquire momentum and the order e book diversifies, margins are anticipated to recuperate.
R&D and future development
With a workforce exceeding 2,350 workers—over 60% in R&D—Tejas is doubling down on innovation.
The corporate stays dedicated to its ₹6 billion R&D finances, even when income development slows in FY26 as a consequence of delayed orders. This highlights Tejas’ long-term technique to construct differentiated telecom options regardless of short-term profitability pressures.
Within the close to time period, Tejas expects to finish BSNL’s first one-lakh website order this monetary 12 months. Past that, additional 4G enlargement, 5G upgrades, and standalone 5G builds within the n78 (3.5 GHz) band are on the horizon. Execution will probably be vital as the corporate positions itself for the subsequent section of development.
Outlook for FY26
Tejas stays assured about stronger income conversion in Q4FY25 and FY26, pushed by anticipated BSNL 5G orders, Vodafone Concept’s community enlargement, and worldwide offers spanning the US, Center East, Africa, and Latin America.
The corporate can be investing in non-public 5G options, high-speed fibre upgrades, and synthetic intelligence (AI)-driven networking—strategic bets geared toward long-term development.
To speed up world traction, Tejas has expanded its management staff, bringing in former Nokia India head Sanjay Malik and strengthening its gross sales drive.
Whereas profitability challenges persist as a consequence of excessive receivables, delays in massive authorities and enterprise offers, and product combine shifts, administration sees these as short-term hurdles reasonably than structural points.
Tasks and development
Regardless of short-term profitability pressures, Tejas Networks is betting on main 5G, fibre enlargement, and community modernization initiatives to enhance monetary efficiency. The administration is concentrated on increasing gross sales, strengthening management, and diversifying its product combine—strikes that sign a long-term development technique.
A profitable scale-up of initiatives like BSNL’s 5G rollout, BharatNet Section 3, and personal 5G enterprise deployments over the subsequent two quarters might present much-needed income momentum. Nonetheless, execution dangers stay, and efficient money move administration will probably be vital to translating these alternatives into sustained profitability.
Tejas can be eyeing fibre upgrades for energy and railway networks, that are shifting from 100G to 400G+ applied sciences, presenting one other development avenue.
In the meantime, Tejas is conducting proof-of-concept (PoC) trials with Indian telecom operators, which might result in bigger offers. Its profitable execution of BSNL’s 4G contract has already boosted its credibility, attracting curiosity from world gamers.
The corporate is in discussions with tier-1 worldwide operators, however these offers require customized R&D and spectrum-specific variations, extending gross sales cycles.
On the federal government incentives entrance, Tejas has booked over ₹5 billion in PLI incentives over the previous 12 months. It obtained the FY23 incentives in FY24 and expects the FY24 incentives within the present monetary 12 months.
The administration is actively participating with authorities businesses to expedite approvals, making certain well timed entry to those advantages.
International enlargement
Tejas is increasing in key worldwide markets, together with Indonesia, Malaysia, the Center East, North America, and Latin America. To strengthen its foothold, the corporate is leveraging native partnerships for in-country presence, language assist, and buyer relationships—vital for community deployment and gross sales.
In North America and Latin America, regulatory challenges seem minimal. The important thing requirement is certifying tools for efficiency, security, and radiation compliance by way of businesses similar to TÜV and UL.
Whereas potential tariffs stay unsure, Tejas is ready to navigate any adjustments. Gross sales cycles in these areas are usually lengthy, involving a number of phases of lab testing, subject trials, and industrial negotiations, however as soon as a vendor is chosen, contracts typically prolong over a number of years.
Tejas is actively pursuing main US authorities programmes, together with the BEAD (Broadband Enlargement in Rural America) and Rip and Substitute (Community Modernization Initiative), a multi-billion-dollar challenge.
Collaborating with native companions, the corporate is aiming for a share of those contracts whereas positioning itself as a frontrunner in circuit emulation over packet networks—an important know-how for modernizing legacy telecom infrastructure in North America.
Financials and valuations
During the last 5 years, Tejas’ gross sales have grown greater than fivefold. After 5 consecutive years of losses, the corporate turned worthwhile in 2024, and this momentum has continued into 2025.
View Full Picture
For the primary 9 months of FY25, Tejas reported income of ₹70 billion and a web revenue of ₹51 billion, reflecting sturdy enterprise execution.
Nonetheless, excessive working capital necessities, margin pressures from the BSNL 4G/5G challenge, rising depreciation, and heavy R&D investments have weighed on returns. Execution delays have additionally added pressure, however higher order achievement and higher-margin world offers might enhance profitability.
Tejas’ inventory has dropped about 42% within the final six months. Its price-to-book (PB) ratio stands at 3.6, barely above its historic median of three.5, suggesting the market within reason valuing the corporate’s belongings.
Nonetheless, its EV/Ebitda has fallen to 10.9, considerably decrease than the historic median of 21.4—reflecting investor considerations over short-term profitability and execution dangers.
Conclusion
Tejas Networks has made important strides, with sturdy income development and a strong order e book. However the actual check lies in execution.
Over the subsequent three years, success will rely on how properly the corporate converts orders into income, manages money move, and sustains profitability. If the BSNL 5G rollout, non-public sector 5G enlargement, and world offers play out as anticipated, Tejas might see a major re-rating.
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Nonetheless, working capital pressures, execution delays, and extended margin pressure stay dangers. The chance is large, however so are the challenges.
Disclaimer: This text is for data functions solely. It’s not a inventory advice and shouldn’t be handled as such.
This text is syndicated from Equitymaster.com
