Tejas Networks is intensifying its global expansion strategy as several international 4G and 5G proof-of-concept engagements advance to commercial negotiations. The Tata Group telecom equipment manufacturer expects to finalize multiple deals in upcoming quarters, even as delayed domestic orders continue to impact financial performance.

Q3 Financial Performance Hit by Order Delays

The company reported challenging third-quarter results, with financial performance significantly affected by delayed purchase orders from BSNL. The much-awaited BSNL 4G add-on purchase order for expanding 18,000 sites remains pending despite extended preparation periods.

Chief Operating Officer Arnob Roy attributed the loss primarily to lower sales and the deferment of the BSNL purchase order. The company maintains higher inventory levels in anticipation of this order, with partner Tata Consultancy Services already receiving advance purchase orders and letters of intent for the project.

International Market Expansion Gains Momentum

Despite domestic challenges, Tejas Networks is witnessing increased international engagement across multiple regions. The company has secured several significant contracts and is pursuing additional opportunities in emerging markets.

Recent International Wins

Roy emphasized that multiple ongoing proof-of-concept engagements have progressed to commercial negotiation stages, with expectations of deal closures over the next few months. The company is leveraging partnerships with NEC and Rakuten to expand its international presence.

Domestic Market Achievements

Despite BSNL order delays, Tejas Networks achieved notable success in India's domestic market during Q3. The company secured multiple packages under the BharatNet programme, establishing itself as one of the largest suppliers of IPMPLS routers by package count.

Key Domestic Wins

• Multiple private 5G deployment contracts, particularly for ports and mining applications
• Expansion orders from leading private telecom operators for wavelength division multiplexing and packet equipment
• First win in fronthaul and data centre networking applications for switching products
• Strategic expansion beyond traditional data centre interconnect business

Future Growth Strategy and Market Outlook

The company's leadership remains optimistic about future prospects, citing strong demand drivers across multiple segments. Roy highlighted several key growth catalysts supporting the company's expansion strategy.

Growth Drivers

• AI-driven traffic growth creating increased infrastructure demand
• Continued 4G network expansion in emerging markets
• Fresh 5G deployments across international markets
• Rising investments in AI data centres requiring advanced networking solutions

The path to profitability involves scaling operations both internationally and domestically, driven by wireless and wireline product portfolios. The company aims to reach critical size to support existing investments and drive sustainable growth.

Leadership and Operational Updates

Tejas Networks' board is actively working on appointing a new chief executive officer, with Roy indicating an announcement expected soon. The absence of a permanent CEO is not impacting daily operations, according to company leadership.

Operational performance during the quarter was driven by shipments across wireless and wireline product categories, with the company successfully executing multiple projects despite challenging market conditions. The elevated inventory levels are strategically maintained for rapid utilization once BSNL order execution begins, reflecting confidence in eventual order materialization.

Tejas Networks shares fell 8% in Monday's trading session following the release of weak Q3FY26 financial results. The stock declined to a low of ₹381.55 from its previous close of ₹416.70, reflecting investor concerns over the company's underperforming quarterly numbers. With a market capitalization of ₹6,849.53 crores, the telecom equipment manufacturer faced significant selling pressure after announcing disappointing financial metrics.

Financial Performance Overview

The company's Q3FY26 results revealed substantial challenges in revenue generation and profitability. The financial performance showed mixed signals with severe year-over-year declines but some quarter-over-quarter improvements.

The earnings per share for the quarterly period stood at minus ₹11.09, compared to ₹9.44 in the previous year's quarter, highlighting the significant impact on shareholder returns.

Operational Efficiency Metrics

Despite the challenging quarterly results, Tejas Networks demonstrated solid underlying financial fundamentals. The company maintains a decent return on capital employed (ROCE) of 15.50% and return on equity (ROE) of 12.80%, indicating efficient use of capital and shareholders' funds.

The company has achieved strong historical performance with a median sales growth of 34.80% over the last 10 years, reflecting robust business expansion capabilities. Additionally, working capital efficiency has improved significantly, with requirements reducing from 251 days to 55.7 days, highlighting better operational management and cash flow discipline.

Revenue Segmentation and Order Book

The company's revenue composition during the reported quarter showed strong domestic focus, with approximately 85% of revenue mix coming from the domestic market and the remaining 15% contributed by international operations.

At the end of Q3FY26, the order book stood at ₹1,329 crores, reflecting a healthy increase from ₹1,204 crores in Q2FY26. The closing order book remained predominantly domestic-focused, with India contributing 92% of the total.

Company Profile and Market Position

Tejas Networks operates as a key vendor for BSNL's 4G rollout under the CDOT–TCS consortium and has positioned itself as one of the largest suppliers of network routers. The company specializes in designing, developing, and manufacturing high-performance wireline and wireless networking products for building telecom networks, serving service providers, utilities, defense, and government entities.

The company provides an end-to-end networking portfolio spanning fixed and wireless access, optical aggregation, metro core and backbone, packet transport, satellite communication, D2M broadcast, and network management solutions. Its technologies power 500+ networks across 75+ countries and are trusted by global industry leaders, including three of the world's largest mobile operators, Africa's top wholesale bandwidth providers, most of India's utility networks, and the world's largest rural broadband network.