Why Tejas Networks Share Price is Rising

Tata's golden touch extends to the stock market.

FY24 saw a phenomenal performance from Tata stocks, with seven companies becoming multibaggers and averaging a whopping 85% return.

Now, Tejas Networks, a Tata-backed company, is grabbing headlines with its impressive surge.

It's shares skyrocketed 20% this morning, reaching a record high, hot on the heels of a 17% jump yesterday.

This follows Tata's initial investment in Tejas Networks back in August 2021, which triggered a 450% rally within a year. Investors are buzzing with questions: Is this another stellar ride in the making, or is there more to the story?

Let's find out why Tejas Networks' shares are on an uptrend and what the future might hold for the rest of 2024.

#1 Robust Q4 Results

Shares of the telecom equipment major, Tejas Networks, traded with significant gains after the company's good Q4 show. The company posted its highest-ever quarterly and annual revenue and profitability.

The company's Q4 revenue soared 343% to Rs 13.3 billion (bn) from Rs 2.9 bn in the previous year.

FY24 net revenue also showed strong growth at Rs 24.7 bn, reflecting a 168% increase, showed the company's call highlights.

The company also achieved profitability, with Q4 net profit at Rs 1.5 bn and FY24 profit after tax at Rs 630 m.

In the corresponding quarter last year, Tejas Networks posted a net loss of Rs 115 m.

Order book stood at Rs 82.2 bn by the end of Q4. The India order book made up Rs 79.6 bn while international business consisted of Rs 2.6 bn.

In Q4, Tejas Networks witnessed an increase in inventory, which surged to Rs 37.4 bn.

This rise was attributed to acquiring crucial long-lead components to expedite the delivery of several critical large orders, notably for BSNL 4G RAN.

Moreover, the company reported trade receivables amounting to Rs 14.6 bn, with Rs 6.5 bn successfully collected during the same quarter. As a result, the working capital saw a notable increase of Rs 15.2 bn.

Tejas Networks maintained a cash position of Rs 6.4 bn by the end of Q4.

However, to support its working capital requirements, the company resorted to borrowings, accumulating Rs 17.4 bn in liabilities by the end of the quarter.

#2 Partnerships, Products, and Patents Driving Growth

In March 2024, the company agreed with Telecom Egypt, the Information Technology Industry Development Agency, and the National Telecom Institute to replicate its success in implementing BharatNet and NKN projects in Egypt.

The company secured strategic wins for DWDM and switching and routing products in the critical infrastructure sector during the quarter.

The company received Rs 326.6 m as incentives for FY23 under the PLI (Production-Linked Incentive) Scheme for telecom and networking products. Saankhya Labs is approved under the Semiconductor DLI scheme.

Tejas and its subsidiaries were granted 22 patents in Q4 of FY24, a total count of 335.

#3 Strong Growth Prospects

The company anticipates further business from BSNL's 4G/5G expansion, private telcos' 4G/5G investments, and BharatNet Phase 3 rollout.

Further, it is well-positioned to capitalise on broadband deployments by private telcos and ISPs.

Also, the company is actively exploring opportunities in the US, Europe, Africa, and Asia for rural broadband expansion, network deployments, and utility modernisation projects.

However, concerns faced by the company include a significant increase in working capital due to the BSNL 4G project, which is expected to normalise as project execution progresses.

Also, the company acknowledges the competitive landscape, emphasising cost competitiveness and technological differentiation.

Further, In the latest video, Research Analyst, Tanushree Banerjee talks about why this Tata Stock outran Tata Elxsi.

Tune in to find out more.

How Shares of Tejas Networks have Performed Recently

Over the last one month, the share price of Tejas network has gained 61%. In 2024 so far, the stock is trading higher by 24%.

In the past one year, Tejas Networks' share price is up by 70%.

The company touched its 52-week high of Rs 1,088 on 23 April 2024 and its 52-week low of Rs 618 on 5 May 2023.

About Tejas Networks

Tejas Networks is among the earliest telecom product companies that have built homegrown technology products in networking and optical backhaul crucial for high-speed broadband.

It was incorporated in the year 2000. The company designs and manufactures optical transmission products, which find application in cellular backhaul, high-speed broadband, and backbone network of telecom service providers for transportation of data and voice over optical fibre.

The company's products are also used in defence communication networks and by utility companies.

Tejas Networks successfully completed its IPO in June 2017 and is a listed company.

To know more, check out Tejas Networks' company fact sheet and quarterly results.

For a sector overview, read our telecom sector report.

you can also compare Tejas Networks with its peers.

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