Can 5G Deals Turn Around Tejas Networks Stock?
The telescopin’ down of Tejas Networks’ stock price is a topic of much discussion in the tech world, with the company’s value plummeting over 40% in the past six months. As the stock trades near its 52-week low, investors are wondering if deals aimed at bolstering the company’s 5G capabilities are enough to turn its fortunes around.
In this article, we’ll dive into the company’s financials, business strategy, and future prospects to help you make an informed decision on whether Tejas Networks is a good investment opportunity.
Tejas Networks’ Financials: A Mixed Bag
Tejas reported Q3 FY25 revenue of ₹26 billion, marking a 4.7% year-on-year increase. However, profitability has been a concern, with the company’s operating profit declining over 30% sequentially, and net profit falling more than 40%. The company is facing challenges related to working capital management, with trade receivables surging to ₹47 billion and inventory levels rising to ₹31.2 billion due to delayed collections and stock buildup from ongoing project execution.
R&amacE and Future Growth
With a workforce of over 2,350 employees, with over 60% dedicated to R&D, Tejas is committed to innovation. The company has maintained its ₹6 billion R&D budget, even if revenue growth slows in FY26 due to delayed orders. This highlights its long-term strategy to build differentiated telecom solutions.
Outlook for FY26
Tejas remains confident about stronger revenue conversion in Q4 FY25 and FY26, driven by anticipated BSNL 5G orders, Vodafone Idea’s network expansion, and international deals spanning the US, Middle East, Africa, and Latin America. The company is also investing in private 5G solutions, high-speed fiber upgrades, and artificial intelligence (AI)-driven networking, strategic bets aimed at long-term growth.
Strengthening Leadership and Global Expansion
To accelerate global traction, Tejas has expanded its leadership team, bringing in former Nokia India head Sanjay Malik and strengthening its sales force. The company is also expanding in key international markets, including Indonesia, Malaysia, the Middle East, North America, and Latin America, by leveraging local partnerships for in-country presence, language support, and customer relationships.
Conclusion
Tejas Networks has made significant strides, with strong revenue growth and a solid order book. However, the real test lies in execution. Over the next three years, success will depend on how well the company converts orders into revenue, manages cash flow, and sustains profitability. If the BSNL 5G rollout, private sector 5G expansion, and global deals play out as expected, Tejas could see a significant re-rating. However, working capital pressures, execution delays, and prolonged margin strain remain risks. The opportunity is big, but so are the challenges.
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