TEJASNET - Tejas Networks Limited Share Price

Tejas Networks Limited reported strong results for Q4 FY25, achieving revenues of INR 1,907 crores, a 1.4x increase year-over-year, while the total revenue for FY25 reached INR 8,923 crores, more than $1 billion and up 3.6x year-over-year. Despite this growth, the company recorded a profit after tax of negative INR 72 crores in Q4, and a PAT of INR 447 crores for FY25, largely impacted by provisions for inventory obsolescence amounting to INR 117 crores in Q4 and INR 181 crores for the full year.

Management highlighted significant achievements, including the successful shipment of over 100,000 sites for the BSNL 4G project, marking one of the largest single-vendor RAN networks delivered globally. The order book at the end of Q4 stood at INR 1,019 crores, predominantly from India, with expectations for continued growth in FY26 driven by expanded product offerings and increased R&D investments.

Looking ahead, management anticipates FY26 to differ significantly due to the completion of the BSNL 4G project, emphasizing new revenue streams from enhanced product portfolios, particularly in 5G solutions. The company has partnered with NEC Corporation for advanced wireless technologies, aiming to leverage this relationship for global market expansion and innovative product offerings.

In terms of guidance, management expressed optimism about the upcoming fiscal year, citing a healthy pipeline of projects across both private and government sectors, which are expected to contribute positively to revenues, with a focus on both short-term and long-term growth strategies. The overall market for Tejas Networks is projected to grow, driven by the increasing investment in telecommunications infrastructure domestically and internationally.

Q&A Section Summary from Tejas Networks Limited Q4 FY25 Earnings Call

1. Question: "Sumit sir, on this inventory, obsolescence, and various other write-downs of intangibles, which amount to roughly INR140 crores, will there be any spillover expected in FY26?" Answer: "Evaluating inventory for obsolescence is an ongoing process. While there will always be provisions, this quarter's significant efforts were largely one-time, so future provisions may be smaller."

2. Question: "Can you update us on the follow-up contracts from BSNL for 4G and 5G, VIL order win, Rail Kavach, and BharatNet?" Answer: "We're in advanced discussions for the BSNL add-on and expect to close soon. The VIL orders are expanding post-execution. Rail Kavach's tender is delayed, while discussions for BharatNet are ongoing with system integrators."

3. Question: "With an order book of INR1,019 crores and last year's revenue at INR2,500 crores, how do we expect to outperform in FY26?" Answer: "While we don't give revenue guidance, the order backlog and strong pipeline hint at good opportunities for FY26, especially with our broader product offerings."

4. Question: "What do you expect in terms of financial metrics to reach breakeven?" Answer: "Employee costs are primarily fixed. Depending on our margin, to cover our costs, revenue should be in the range of INR500-600 crores per quarter."

5. Question: "Can you give insights into the size of opportunity from the NEC tie-up and cost structure in competitive tenders?" Answer: "The NEC partnership allows us access to their customer base, enhancing our international presence. Competitively, we're up against global players, but our recent product developments have positioned us favorably."

6. Question: "What is the expected impact of tariff-related news on Tejas Networks and its competitors?" Answer: "While tariffs impact manufacturing costs for everyone, our competitive landscape remains largely unchanged. The real risk lies in potential declines in customer investment due to global uncertainties."

7. Question: "Regarding the BSNL 4G to 5G transition, what portion will involve upgrades?" Answer: "The BSNL contract includes seven years of maintenance. Upgrades will be a mix of existing bands and new tenders for additional bands, so specifics on order sizes remain uncertain."

8. Question: "What does your future capex outlook look like from telecom operators?" Answer: "Reports indicate growth in capex between 3%-8% for our sectors. The active equipment market, which we serve, is projected to expand significantly as demand continues to rise."

This summary reflects key inquiries and insights shared during the earnings call, focusing on pivotal elements of Tejas Networks' business outlook and financial expectations.