Tejas Networks faced significant financial challenges in the third quarter, with the telecommunications equipment manufacturer reporting a sharp decline in revenue and a widened net loss compared to the same period in the previous year.

Financial Performance Overview

The company's financial metrics for the third quarter present a mixed picture of operational performance:

Revenue Performance Analysis

The most striking aspect of Tejas Networks' Q3 results was the dramatic revenue decline of 88.45%, with quarterly revenue falling to ₹305.00 crores from ₹2,642.00 crores in the corresponding quarter of the previous year. This substantial decrease represents a significant contraction in the company's business operations during the quarter.

Profitability Metrics

Despite the revenue challenges, the company showed improvement in operational efficiency. The net loss increased to ₹197.00 crores from ₹165.00 crores year-on-year, representing a 19.39% deterioration in bottom-line performance. However, the EBITDA loss showed substantial improvement, decreasing by 64.86% to ₹130.00 crores from ₹370.00 crores in the previous year's third quarter.

Operational Efficiency Indicators

The significant improvement in EBITDA loss suggests that while Tejas Networks faced revenue headwinds, the company managed to control its operational expenses more effectively. The reduction in EBITDA loss from ₹370.00 crores to ₹130.00 crores indicates better cost management and operational discipline during the quarter.

The Q3 results reflect the challenging operating environment for Tejas Networks, with the substantial revenue decline being partially offset by improved operational efficiency as evidenced by the reduced EBITDA loss.

Tejas Networks reported significant financial challenges in its Q3 FY25 results, with consolidated losses widening substantially compared to the previous year. The domestic telecom gear manufacturer faced headwinds primarily due to deferred orders from state-owned BSNL and reduced sales volumes.

Financial Performance Overview

The company's quarterly performance showed a stark contrast to the previous year, with key metrics reflecting the operational challenges faced during the period.

Revenue Composition and Market Presence

During the reported quarter, Tejas Networks maintained its focus on both domestic and international markets. The company's revenue mix, excluding operating revenue, comprised approximately 85% from the domestic market and 15% from international operations. This distribution highlights the company's continued dependence on the Indian telecom infrastructure market.

The company has been a key vendor for BSNL's 4G network deployment as part of the CDOT-TCS consortium and positions itself as the largest supplier of network routers in the domestic market. However, the quarter witnessed significant disruption due to the deferment of a substantial purchase order worth ₹1,526.00 crore from BSNL for 18,000 sites.

Inventory and Cash Position

Despite the revenue challenges, Tejas Networks maintained substantial inventory levels and cash reserves to support future operations.

The company indicated that its inventory of ₹2,363.00 crore maintained during the December quarter will be converted to finished goods and shipped in the upcoming months, suggesting potential revenue recognition in future quarters.

Business Development and Government Incentives

Tejas Networks achieved several strategic wins during the quarter, particularly in the emerging 5G segment. The company secured multiple contracts for private 5G deployments in India, focusing on specialized applications in ports and mining operations. Additionally, the company was selected as the 5G radio network supplier for a section of the Delhi-Mumbai railway corridor as part of Indian Railways' Kavach pilot project.

The company also benefited from government support through the Production Linked Incentive (PLI) scheme, receiving ₹84.95 crore during the quarter. This brought the total PLI incentives received by the company to ₹397.00 crore, demonstrating continued government backing for domestic telecom equipment manufacturing.

Outlook Considerations

The company's performance reflects the cyclical nature of telecom infrastructure spending and the impact of order timing on quarterly results. With substantial inventory levels and cash reserves, along with the deferred BSNL orders, the company appears positioned to navigate the current challenges while capitalizing on emerging opportunities in 5G and specialized network deployments.