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Tejas Networks
Our verdict on Tejas Networks isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
Inventory levels have slightly increased to INR 2,537 crores (from ~INR 2,367 Cr) as the company prepares for the execution of expected large orders like the BSNL expansion. (4 in progress, 1 met across 5 tracked commitments)
“Inventory of INR 2,537 Cr during Q1FY26 (vs 2,367 Cr in Q4FY25) – Will be converted to finished goods and shipped in upcoming months”
Inventory levels actually increased to INR 2,537 Cr due to delayed shipments and PO receipts, though management maintains the intent to convert and ship in upcoming months. (3 in progress across 3 tracked commitments)
“I think most of the opportunities that I talked about, we do expect them to close and a large part of them getting executed in FY '26.”
Receivables saw a substantial reduction of approximately 18.4% in a single quarter. (1 met, 4 revised across 5 tracked commitments)
“So, in summary, in Q2, one of the reasons for the smaller revenue and bookings was the delay in the receipt of BSNL 4G add-on PO of Rs. 1,500 crores for 18k sites... we are expecting them in this financial year.”
While the company reported a loss (PAT -501 Cr) for H1FY26 due to inventory provisions and order delays, the historical gross margin for FY25 was 22%, which is within the guided 20-30% range. (1 met, 1 exceeded, 3 missed across 5 tracked commitments)
“So depending on the - well, not giving the exact number, but depending on the margins that you assume, which is basically between 20% to 30% range, that could give you the implied revenue required to be recovering the fixed cost that we have.”
Management expects multiple ongoing wireless product trials in India and international markets to close in the coming months. (+4 more commitments)
“Many of them started in Q2 and many of them have progressed to the commercial negotiation stage and are expected to close in the coming months.”
See the full cited Management analysis of Tejas Networks
How durable is the business?
India continues to be the dominant geographic segment, increasing its share of the closing order book to 92%, driven by government infrastructure projects and private telco expansions. (1 expanding)
“Closing Order Book Mix India: 92%”
Wireless products have transitioned from a transition phase to a massive revenue driver, having shipped over 100,000 sites for the BSNL 4G/5G project, representing a record-breaking single-vendor RAN delivery. (5 expanding)
“we shipped 100,000 sites on the BSNL 4G project... This is one of the largest single-vendor RAN network in the world ever delivered in record time.”
The segment remains a core driver with new wins in Bharatnet Phase-III and critical infrastructure (railways, oil & gas), though overall revenue saw a sharp quarterly dip due to shipment delays. (1 stable, 2 expanding across 1 engine)
“Quarter revenue driven largely by sale of Wireline products to India Pvt and International customers”
International revenue share increased to 19% this quarter, led by shipments to customers in Africa and Europe. (4 expanding, 1 contracting)
“Revenue broadly comprises from Indian customers about 85% and international about 15%.”
India remains the overwhelming revenue driver, with the 'India Private' segment (which includes the BSNL project via TCS) holding the dominant share of the record INR 8,923 crore annual revenue. (2 expanding, 2 shifted, 1 stable)
“India Private grew significantly and had the dominant share... our BSNL 4G shipments through TCS is considered as part of the India Private business.”
See the full cited Business Model analysis of Tejas Networks
Where does growth come from?
PLI incentive inflows are accelerating as the company hits production milestones, providing significant cash flow support. (3 accelerating, 2 steady across 5 signals)
“We received INR85 crores as PLI incentives for Q4FY25 and cumulatively INR397 crores of PLI for FY25.”
International growth is steady but remains a small portion of the total mix; however, the new NEC partnership is a new strategic catalyst for global expansion. (2 new trend across 2 signals, 2 leading indicators)
“Won a DWDM backbone network buildout order from a broadband ISP in Africa; Won a network transformation application for our MPLS-TP products for a power sector company in SE Asia”
Tejas is diversifying its revenue streams by entering the specialized railway safety market, a new trend for their 5G RAN equipment. (1 new trend across 1 signal)
“We have been selected as a 5G RAN supplier on a section of the Delhi-Mumbai railway corridor for a pilot on the Kavach project”
Inventory levels remain high but are steady as the company prepares to convert these stocks into shipments for upcoming quarters following the peak BSNL shipping phase. (5 steady across 5 signals, 3 leading indicators)
“Inventory of INR 2,363 Cr during Q3FY26 (vs 2,383 Cr in Q2FY26) – Will be converted to finished goods and shipped in upcoming months”
The order book has significantly expanded to INR 2,767 Cr (INR 1,241 Cr current + INR 1,526 Cr expected BSNL order), representing a massive acceleration compared to the previous quarter's INR 1,019 Cr. (1 accelerating, 4 reversing across 5 signals)
“Order book at end of Q3: INR 1,329 Cr (1,204 Cr in Q2FY26)”
See the full cited Future Growth analysis of Tejas Networks
What could break the thesis?
The risk remains high and is intensifying in the short term as the delay in receiving the Purchase Order (PO) and shipping for the 18k BSNL sites directly caused the massive revenue slump this quarter. (4 intensifying, 1 easing, 2 high-severity)
“Delay in receipt of BSNL 4G add-on PO of 1,526 Cr for shipment of 18k sites”
The risk is intensifying as net debt has increased to approximately INR 2,442 crores (Borrowings of INR 3,269 Cr vs Cash of INR 827 Cr), driven by high working capital needs for the BSNL project. (5 intensifying, 4 high-severity)
“Net Debt of 3,349 Cr vs 3,738 Cr in Q2FY26 mainly due to lower working capital, partly offset by capex; Gross Debt of 3,885 Cr and cash of 537 Cr”
The risk is intensifying as the order book concentration in India increased from 85% revenue mix to 92% of the closing order book. (1 intensifying, 4 stable, 2 high-severity)
“Closing Order Book Mix • India: 92%”
The risk is intensifying as the net loss widened to Rs. 307 crores in Q2 FY26 from Rs. 194 crores in Q1 FY26, driven by massive one-time provisions. (4 intensifying, 1 easing)
“because of the size and the ARPU challenges, it's a very, very competitive market. So, the price levels in India are quite different and quite challenging as compared to international markets.”
While revenue grew 17% compared to the previous quarter, it is significantly lower than the levels seen in the same period last year, suggesting a potential slowdown in large-scale deployments. [DEMAND]
“Revenue from Operations: 2,642 (Q3 FY25) vs 307 (Q3 FY26)”
See the full cited Risk analysis of Tejas Networks
Tejas Networks analysis by filing period
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