AI-generated · cited to primary sources · not investment advice
Tejas Networks (540595) May 2025 Filing Analysis
Does management do what it says?
The company successfully claimed and received a significant incentive of INR 312 Cr for FY25, demonstrating strong execution of the PLI roadmap. (1 exceeded across 1 tracked commitment)
“Till FY27... Current scheme is for five years, so it will end in FY27.”
The company received a significant portion of PLI incentives during the quarter for the Q3FY25 period. (1 in progress, 2 met across 3 tracked commitments)
“considering there is reasonable assurance that the Company will comply with the conditions attached to the PLI scheme and that the remaining grant amount of Rs. 278.78 crore will be received.”
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.”
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.”
Tejas Networks expects to expand its business with Vodafone Idea (VIL) in FY26 as their networks expand.
“And that business is expanding and we hope to expand that business going forward in FY26 as well, as their networks expand.”
See the full cited Management analysis of Tejas Networks
How durable is the business?
The company successfully monetized its PLI status, receiving substantial cash incentives for FY24 and FY25, validating the regulatory moat. (5 expanding)
“We also received around INR123 crores of PLI incentives for FY24 and the first tranche of INR189 crores for FY25.”
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.”
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.”
Wireline business continues to grow within the India Private segment among mobile operators, while the overall product portfolio expanded to include 800Gbps and 1.2Tbps DWDM systems. (1 expanding, 2 contracting)
“we saw a good amount of growth of our wireline business in the India Private segment among the private mobile operators... We enhanced our optical portfolio from 400Gbps to 800Gbps and 1.2Tbps per channel DWDM systems.”
See the full cited Business Model analysis of Tejas Networks
What could break the thesis?
The risk remains high and intensifying in terms of revenue mix. For FY25, the India Private segment (which includes BSNL shipments via TCS) was the dominant share, while International business remained small at only 3% of overall business. (1 intensifying)
“International business had a year-over-year increase of 18%. In the overall scheme of things, it's still a small number. It was like 3% of our overall business.”
See the full cited Risk analysis of Tejas Networks
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