The Tata Group-backed Tejas Networks stock shot up 20% in early morning trade on Monday, October 21, to a three-month high of ₹1,427 per share. This dramatic increase comes after the business’s excellent Q2FY25 results, which were disclosed on Friday after market hours.
In Q2FY25, the company’s consolidated revenue from operations increased six times to ₹2,811 crore from ₹396 crore in the same quarter the previous year. After reporting a net loss of ₹13 crore in Q2FY24, it made a huge comeback with a profit after tax (PAT) of ₹275 crore.
The company reported a net profit of ₹353 crore for H1FY25, up from a net loss of ₹39 crore in the same period last fiscal year. This is after the company had nine straight quarters of net losses. The company maintained this trend after returning to profitability in Q4FY24.
Tejas Networks’ revenue mix in the September quarter was mostly driven by contributions from the Indian private sector, which accounted for 93% of total revenue. This represented a notable 13.7x YoY rise, mostly because of shipments to TCS related to BSNL 4G. On the other hand, overseas revenues made up 3%, indicating a 3% YoY loss, primarily from significant exports to South Asia and Africa. The India-government category contributed 4%, indicating a 5% YoY decline.
The business, which has already sent equipment to over 58,000 sites, increased the pace of 4G/5G RAN shipments for BSNL’s pan-India network. Additional orders for densification of installed 4G sites in specific circles were also received by it. Tejas Networks witnessed significant international demand for its GPON and DWDM technologies, winning over new clients in the Americas and Africa, including a first order for network modernisation in the United States.
According to the company’s Q2 investor presentation, after the September quarter, the order backlog was at ₹4,845 crore, of which ₹4,627 crore came from India and ₹218 crore from outside markets.
The business is concentrating on a number of significant prospects in the wireline and cellular industries going forward. The company stands to gain from the growth of BSNL’s 4G network and the subsequent upgrading to 5G in the wireless sector.
It also aims to target initiatives like the Kavach system of Indian Railways, a technology that avoids collisions, and private 5G applications for big businesses in India.
The company intends to leverage the expansion of DWDM backbone networks in the utility sector and Bharatnet Phase 3 efforts to its advantage in the wireline industry. In addition, the company is negotiating network modernisation and FTTH (Fibre to the Home) contracts with several operators in the Americas and EMEA (Europe, the Middle East, and Africa).
Tejas Networks is positioned to take advantage of major development prospects in the changing telecom market thanks to these strategic initiatives.
Wealth Creator
The stock has returned an amazing 1421% over the last four years, from ₹90 per share to its current trading value of ₹1,369, a remarkable gain. Interestingly, the stock saw its biggest monthly gain in April, rising by 74%.
The largest shareholder in Tejas Networks is Panatone Finvest, a Tata Sons subsidiary, and the company is a component of the Tata Group. For use by utilities, government, defence, and telecommunications service providers in more than 75 countries, it develops and produces high-performance wireline and wireless networking equipment.
