Tejas Networks a Tata Group company was founded in 2000 and headquartered in Bangalore (India). It is India’s premier indigenous developer and manufacturer of telecom and networking equipment, both wireless and wireline. It designs, develops, and manufactures high-performance and future-ready products for building high-speed communication networks that carry voice, data and video traffic from fixed line, mobile and broadband networks. The company's products are differentiated by a programmable, software-defined hardware architecture that provides flexibility, multi-generation support and a seamless software-enabled network transformation to its customers across different sectors such as Telecom Service providers, Utilities, Internet Service Providers, Defence and Government entities.

The Company's engineering and management teams have diverse experience in optical communication systems, networking protocols, Field Programmable Gate Array ('FPGA') design, embedded system software, application software, high-speed printed circuit board ('PCB') design, thermal and mechanical design, product management, quality and test engineering and reliability engineering.

It has presence in 75+ countries with a spanning network of 500+ and have shipped 75000+ systems. Company has more than 60% of its worksforce under R&D which has designed 350+ High-speed PCBs, 300+ Silicon Ips and 3M+ Software lines of code. For wireless 4G RAN equipment, the Company completed a Proof-of-Concept (PoC) trial in India or a large-scale 4G deployment project for a leading state-owned telecom company.

Recently, the company developed a comprehensive portfolio of end-to-end optical, GPON/XGS-PON and 4G/5G products, which are installed internationally. It has also expanded fiber broadband product portfolio by adding more ONT variants and a new compact and cost-effective 1RU 4-port GPON OLT. It also enhanced the OTN DXC portfolio by scaling tens of terabit non-blocking DXC capacities to address core and large metro applications.

Tejas Networks has recently launched its innovative, ultra-converged broadband access/edge product family which delivers wireline as well as wireless broadband services from a single integrated platform. The TJ1400 ultra-converged broadband product family provides an unmatched integration of multiple broadband access technologies: gigabit fiber broadband (GPON/NG-PON), fixed wireless broadband (4G/LTE eNodeB upgradable to 5G) and GE/10GE/100GE Business Ethernet services (CE2.0 certified) in highly compact, modular, and energy-efficient platforms.

Company’s current order book position stands at Rs. 8221 crores.

KEY HIGHLIGHTS:

• It is the largest supplier of GPON equipment for BharatNet, India’s national rural broadband network and already deployed GPON ONTs in nearly 100K villages and OLTs in ~3000 blocks for customers such as BBNL, TFIBER and Gujarat Fibergrid.
• It is India’s largest domestic supplier of optical (PTN, OTN/DWDM, MSPP) & home broadband (GPON) products.  Its products are deployed in all major public and private sector mobile networks and serves major clients such as BSNL, Airtel, Tata Comm. and Tata Teleservices.
• It has Built high-capacity optical backbones for railways, metro rail, power, oil & gas companies such as Power Grid, RailTel, Indian Railways, Indian Oil and GAIL.
• Company has supplied Ethernet switches for over 15 Smart and Safe City projects in India which are widely deployed in Bangalore, Delhi, J&K, Ahmedabad and Nirbhaya projects.
• It is Key domestic supplier of networking equipment to tri-services which are deployed in AFNET/MRSAM/MAFI, Army, CIDSS, Navy NFS networks.
• It has Lit up 10,000 kms of fiber across multiple countries with 100G/200G/400 services for Africa’s leading Carrier of Carrier. It also has Country-wide optical network for leading ISP in Italy; State-wide optical and fixed wireless network in Malaysia.

Fundamentals (FY24-25):

Financial Results:

Company’s Net Sales was at Rs 1,326.88 crore in March 2024 up 343.3% from Rs. 299.32 crore in March 2023. Its Quarterly Net Profit was at Rs. 146.78 crore in March 2024 up 1379.69% from Rs. 11.47 crore in March 2023. Company’s EBITDA stands at Rs. 318.79 crore in March 2024 up 2337.23% from Rs. 13.08 crore in March 2023. Tejas Networks EPS has increased to Rs. 8.61 in March 2024 from Rs. 0.70 in March 2023.

Key Updates:

1. Tejas Network has acquired 64.4% stake in Saankhya Labs Private Limited and its subsidiaries.
2. Company has also received a purchase order of Rs 336 crore from BSNL for expansion of BharatNet, the world's largest rural broadband project.
3. Recently the company received Rs 27.78 crore as incentives for the fiscal year 2022-'23 under the PLI (Production-Linked Incentive) Scheme for Telecom and Networking Products. The said amount accounts for 85% of the total claim for FY23 and the balance 15% is expected to be released subsequently in accordance with the PLI Scheme Guidelines. The company is eligible to receive design-linked PLI incentives for five years, starting with fiscal year 2022-'23, on meeting the minimum cumulative investment of Rs 750 crore committed during the scheme period.
4. FibreConnect, an innovative wholesale telecom infrastructure developer in Italy, has successfully launched its broadband services in the country using its state-of-the-art telecom and networking products. It is the sole supplier of optical networking and broadband access products for FibreConnect's country-wide FTTP (fiber-to-the-premise) rollout, ranging from DWDM/PTN/OTN for Core to xPON and Ethernet for Access. Tejas Networks has deployed its full-range of products including its versatile TJ1400UCB, integrating GPON/XGS-PON, Fixed LTE and PTN technologies for Access and Aggregation, multi-terabit TJ1600 OTN/DWDM systems for Metro and Backbone, and feature-rich TJ2100 series of ONTs for business and industrial premises.
5. Company has recently executed a Master Contract for supply, support and annual maintenance services of its Radio Access Network (the "RAN") equipment for BSNL's Pan-India 4G/5G network, with Tata Consultancy Services Limited for Rs 7,492 crore (approx. USD 900 million) as a part of which it will supply its latest 4G/5G RAN equipment for approximately 100,000 sites, which will be executed during the calendar years 2023 and 2024.
6. Company has also received an Advance Purchase Order of Rs 696 crores from BSNL (Bharat Sanchar Nigam Limited) for the upgradation of its pan-India IP-MPLS based Access and Aggregation Network (MAAN) using its stateof-the-art routers. It will supply, install and commission over 13,000 of its TJ1400 series of nextgeneration access and aggregation routers for realizing a converged multi-service packet network, being rolled out on a nationwide basis.
7. Recently the company successfully demonstrated 4G/5G network and applications on an end-to-end indigenous network, using its designed-and-made in India hardware and software products, in the presence of Hon'ble Prime Minister of India, Shri Narendra Modi, at the India Mobile Congress (IMC) being held at Pragati Maidan, New Delhi. It showed a full range of innovative wireless and wireline products from Tejas Networks and its subsidiary Saankhya Labs.
8. Company has also bagged a contract worth Rs 298 crores for the supply, installation, commissioning and support of its state-of-the-art optical networking equipment, for the augmentation of Power Grid, pan-India telecom backbone and access networks. As  part of the contract, Tejas will deploy a wide range of its versatile family of products including TJ1600 multi-terabit OTN cross-connects and 100G/200G DWDM systems with advanced Flex-grid ROADM functionality, TJ1400P series of MPLS-TP/Carrier Ethernet switches, along with TejNMS, its universal, multi-technology network management system to create a scalable and high-capacity network for PGCIL.
9. Tejas Network was selected by Bharti Airtel ("Airtel"), India's premier communications solutions provider has selected Tejas Networks to enhance its optical network capacity in key metropolitan markets. The company will supply, install and support its state-of-the-art TJ1600 DWDM/OTN products for extending Airtel's optical networks towards the edge, supporting 5G backhaul, B2B services and broadband applications.
10. GigNet, a leading digital infrastructure company in Mexico also has selected the company's optical networking and broadband access products for their state-of-the-art, high-capacity fiber optic network expansion in the Cancun region of Mexico.
11. TelOne, one of Zimbabwe's largest telecom entities and the most affordable internet service provider, has deployed Tejas' 100G/100G+ coherent DWDM solution. TelOne has the widest network coverage in Zimbabwe with connectivity across the country, anchored on its robust backbone infrastructure.
12. The company has signed a multi-year contract with Asia Consultancy Group (ACG), a leading independent private company providing Telecommunications infrastructure, managed & engineering services across Afghanistan. ACG with its headquarters in USA, is a full life-cycle managed network service provider in Afghanistan for last many years. As part of this contract, Tejas will supply its state-of-the-art 100G-600G capable DWDM/OTN and PTN products to establish a high-capacity national backbone and packet access network in Afghanistan.
13. The company has also received a purchase order of $13 million from a leading telecommunications service provider in South East Asia. As per the contract, Tejas will supply and install its award-winning TJ1400 ultra-converged broadband products (TJ1400UCB) to extend high-speed broadband services to underserved rural communities in the region.
14. C3ntro Telecom, a leading wholesale carrier based in Mexico, has expanded existing partnership with Tejas Networks for the upgrade of its high-speed Backbone and Broadband network. C3ntro will deploy Tejas' multi-terabit TJ1600 OTN/DWDM products to enhance bandwidth capacity on their optical backbone network to meet the massive surge in data center interconnect, broadband traffic from Work from Home (WFH), Video-on-Demand (VOD) and online learning.

Company has generated 467.07% return in 3 years compared to Sensex and Nifty in same period.

GOI has announced Rs 1.39 trillion budget to extend BharatNet to 640K villages by 2025 and almost 100 million homes are estimated to be fiberized by 2030 backed by Aggressive FTTx plans by telcos since ARPU is ~5x of mobile data services and all these will create opportunity for the company to grow further in upcoming years. Indian telcos augmenting Metro and Backbone networks to prepare for 5G, “Carrier of Carriers” upgrading optical networks to 200G/400G+ WDM/OTN , Enterprise digital transformation driving demand for multi-gigabit connections, Utilities focusing on network modernization projects (TDM to IP), Significant investments by Railways in safety systems and LTE-R in next 6-7 years and Rapid deployment of smart and safe cities in India are also some of the key prospects which will help the company to gain streamlined flow of income going ahead. Considering the launch of 5G by BSNL in the next 12 months, Investment of Rs.1.6 lac crores in 5G capex by Private telecoms, Gain of traction by Enterprise 5G use cases, good orderbook position, healthy financials and growth of Telecom and related industries in upcoming years one can invest in this Tata Group company for long term period with buy in dip strategy.

HET ZAVERI

info@smartinvestment.in

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