Tejas Networks Reports Rs 307 Crore Loss in Q2 Despite 30% Revenue Growth
Tejas Networks reported a 30% increase in Q2 revenue to Rs 262 crore, but also faced a loss of Rs 307 crore, up 58% from Q1. The loss included Rs 190 crore in provisions, mainly for inventory obsolescence and warranty expenses. The company played a crucial role in BSNL's 4G network launch, unveiled new products, and expanded internationally. Despite financial challenges, management remains optimistic about future growth opportunities in wireless and wireline segments.
*this image is generated using AI for illustrative purposes only.
Tejas Networks , a leading telecom equipment manufacturer, reported a mixed financial performance for the second quarter. While the company saw a significant increase in revenue, it also faced substantial losses due to various provisions and charges.
Financial Highlights
| Metric | Q2 | Q1 | QoQ Change |
|---|---|---|---|
| Revenue | 262.00 | 202.00 | 30.00% |
| Loss (PAT) | 307.00 | 194.00 | 58.00% |
| Order Book | 1,200.00 | 1,241.00 | -3.30% |
The company's revenue mix remained consistent with the previous quarter, with 79% coming from India and 21% from international markets. However, the order book composition showed a strong domestic focus, with 93% of orders from India and only 7% from international markets.
Key Developments
BSNL 4G Network: Tejas Networks played a crucial role in the launch of BSNL's nationwide 4G network, with 97,500 cell towers now running on Tejas' 4G RAN products. The network is carrying 4 petabytes of daily data traffic and serving 26 million active subscribers.
New Product Launches: At the Indian Mobile Congress, Tejas unveiled its new 64T64R massive MIMO radio and a state-of-the-art 1.2 Tbps DWDM transmission system.
International Expansion: The company won multiple 400-gig deployments for customers in India, Europe, Cambodia, Ghana, and Nigeria. It also deployed its first 10-gig CPON solution in Europe.
Board Addition: Dr. Randhir Thakur, CEO and MD of Tata Electronics, joined Tejas Networks' Board as a non-executive and non-independent Director, bringing over 40 years of semiconductor industry experience.
Innovation Recognition: Tejas was shortlisted as a finalist for the "2025 Network X Awards" in Paris for its "Intelligent Alien Wavelength Solution."
Financial Challenges
The quarter's loss of Rs 307 crore included Rs 190 crore in provisions, primarily consisting of:
- Rs 145 crore for inventory obsolescence and write-downs
- Rs 44 crore for warranty expenses
These provisions were attributed to contract manufacturing process losses, design changes, and potential fault rates in the field.
Balance Sheet Overview
| Item | Value |
|---|---|
| Inventory | 2,383.00 |
| Receivables | 4,026.00 |
| Payables | 355.00 |
| Borrowings | 4,166.00 |
The company collected Rs 700 crore in receivables during the quarter. The high level of receivables is largely due to the BSNL 4G order, with collections linked to specific milestones expected over the next 2-3 quarters.
Future Outlook
Despite the current financial challenges, Tejas Networks' management remains optimistic about the company's future. They cited ongoing technology transitions and expanding market opportunities in both wireless and wireline segments as key drivers for growth. The company continues to invest heavily in R&D and sales expansion, focusing on developing cutting-edge 5G and 6G technologies while also addressing the growing demand for high-bandwidth connectivity in data centers.
As Tejas Networks navigates through its current financial situation, the company's ability to capitalize on its technological advancements and expand its market presence will be crucial for its long-term success in the highly competitive telecom equipment industry.
Historical Stock Returns for Tejas Networks
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +8.42% | +1.38% | -7.41% | -21.81% | -57.73% | +508.14% |
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