Tejas Networks has reported significant financial losses despite its major deployment success with BSNL, as delayed orders continue to impact the telecom equipment manufacturer's profitability. The Tata group-backed company, which deployed a 4G network across approximately 100,000 sites for Bharat Sanchar Nigam Ltd (BSNL) in 2024-25, is now grappling with prolonged financial struggles due to order execution delays.

Financial Performance Deteriorates

The Bengaluru-based firm's financial results showed a marked deterioration in the December quarter. The company has been forced to maintain sticky inventory levels exceeding ₹2,300 crore for four consecutive quarters, resulting in quarterly losses driven by severe revenue constraints.

*Calculated based on 88% decline
**Nine-month period comparison

BSNL Order Delays Create Inventory Burden

For nearly a year, Tejas Networks has been waiting for BSNL's ₹1,526 crore "add-on" order for 18,685 additional sites. The company first discussed being in advanced stages of discussions with BSNL for the add-on offer in April 2025 during an earnings call. On May 21, 2025, it informed stock exchanges that it had received an add-on advance purchase order from BSNL for the supply, deployment, and maintenance of a 4G mobile network at 18,685 sites, with an order value pegged at ₹1,526 crore. However, the final order has not been received yet.

According to Arnob Roy, executive director and chief operating officer, the delay stems from BSNL's lack of operational readiness for rolling out the network. "Earlier, a lot of this inventory had actually been procured for executing on the BSNL 4G add-on order, for which our partner Tata Consultancy Services Ltd (TCS) has received an APO (advanced purchase order)," Roy explained during the December-quarter earnings call on January 9.

Market Impact and Investor Concerns

The weak financial results significantly impacted the company's share performance. Tejas Networks' shares closed 8.9% lower on Monday at ₹380 on the National Stock Exchange (NSE). The stock has declined 61.7% in 2025 from ₹1,185.70.

During the earnings call, investors and analysts raised concerns about the company's financial model, noting that inventory levels are currently double the order book size of ₹1,329 crore. This has created an extended working capital cycle that has yet to yield returns for shareholders. Questions also mounted about the company's cash runway, given recurring EBITDA losses of approximately ₹150 crore.

Business Diversification and Future Outlook

Despite the BSNL dependency, Tejas Networks is working to diversify its customer base. In December 2024, the company announced a three-year contract with Vodafone Idea Ltd to supply products for the telecom operator's backhaul capacity and improve network performance.

Roy emphasized that BSNL projects serve as a platform rather than a lifeline for the company. "The plan for the company is really to take this global, to take it to private telecom operators, to international operators," he stated. The company is seeing increased international engagements for its 4G/5G radio access network (RAN) equipment, including multiple ongoing proofs-of-concept and commercial negotiations across Asia Pacific, Latin America, Africa, and Europe.

Leadership and Strategic Challenges

The company continues to operate without a CEO, a position that has been vacant for approximately three quarters since Anand Athreya's resignation. Roy assured that regular business operations remain unaffected, with the board actively working on the appointment.

Faisal Kawoosa, chief analyst at Techarc, highlighted the company's heavy dependency on BSNL as a concern. "The company's success story is limited, given that major private telecom operators have not been using their equipment. The company needs to focus more on research and development to leapfrog innovation," Kawoosa noted. He also pointed to higher competition in the global telecom gear market, particularly from Chinese players, as a potential complication for international expansion plans.

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.