Tejas Networks Slips as IT-Hardware Sector Struggles with Market Headwinds
Business and Industry Overview:
Tejas Networks is an Indian company that makes equipment for telecom and internet companies. It started in 2000. The company helps these companies provide fast and reliable internet. Tejas Networks works in over 75 countries, including places like Southeast Asia and Africa. One of its major projects is BharatNet. This project is focused on bringing high-speed internet to rural areas in India. Tejas Networks has helped connect over 40,000 villages in India. This has allowed millions of people in small towns and villages to use the internet. Tejas Networks also works with big companies like Tata and BSNL. They supply equipment for 4G and 5G networks. These products help make the internet faster and improve mobile services. The company has invented many new technologies and holds patents for them. Besides India, Tejas Networks is also working in other countries. For example, in Egypt, they are helping build better internet networks. The Indian government supports the company through a scheme that helps produce more local telecom equipment. Tejas Networks is growing fast, with help from investors like Tata Sons. They are working on big projects to improve India’s telecom networks, including 4G and 5G services. Tejas Networks is helping shape the future of telecom, both in India and around the world.
India’s telecom industry has grown rapidly in recent years. As of May 2024, there are 1,203.69 million phone subscribers. Of these, 59.59% live in rural areas. This shows that more people in the countryside are using phones. India is also a huge user of data. The amount of data used has increased by over ten times in the last few years. In 2014, each person used just 61.66 MB of data each month. But by December 2023, this increased to 19.47 GB per month. This shows a big jump in data usage. India is one of the biggest data users in the world. The country’s wireless data usage is growing fast. The volume of data used reached 47,629 petabytes in 2024. In the future, India is expected to keep growing in mobile technology. By 2026, it is predicted that 350 million people will use 5G networks. This will make up 27% of all mobile subscriptions in India. The export of mobile phones from India is also increasing. In FY24, India exported US$ 15.6 billion worth of phones, a 42% rise. This shows how much demand there is for Indian-made phones. India’s telecom industry also needs skilled workers. By 2025, the country will need about 22 million skilled workers. These workers will need knowledge in fields like Artificial Intelligence, robotics, and cloud computing. India is also doing well in global internet traffic. The country ranks second in international mobile broadband traffic and internet bandwidth. This shows that India is a leader in global internet use. The government is supporting the telecom industry. In 2024-25, the government allocated Rs. 116,342 crore (US$ 13.98 billion) for telecom improvements. The government also approved Rs. 4,115 crore (US$ 502.95 million) for 42 companies to help grow the sector. There has been a lot of foreign investment in India’s telecom industry. From 2000 to 2024, foreign companies invested US$ 39.32 billion in the sector. This has helped the industry grow even more. Telecom companies like Jio, Airtel, and Vodafone Idea are expanding their services. They are especially focused on providing better service to rural areas. The government is working on projects to improve internet and mobile services. One of these projects is BharatNet, which is helping provide broadband to remote areas. The government is also planning to develop 6G technology. This will help India stay ahead in the telecom industry. In conclusion, India’s telecom sector is growing rapidly. The future looks bright with more people using mobile phones, more data usage, and government support. Competitive positioning is how a company makes itself stand out from others. It tells customers why they should choose that company over others. Companies do this in many ways. Some focus on having the lowest prices. This attracts customers who want to save money. Other companies focus on quality. They offer better products to attract people who want high-end items. Some companies offer unique features. For example, a phone company may have a special camera that other phones don’t have. Certain companies target specific groups. A luxury brand may focus on wealthy customers who want expensive items. A budget brand, on the other hand, may offer cheaper products for people with limited money. Some companies keep creating new things. They focus on innovation to stay ahead of competitors. They offer the newest products and ideas. This helps attract customers who like new trends. In simple terms, competitive positioning is about showing customers why they should pick one company over another. It’s about offering something special that others don’t. This could be price, quality, unique features, or innovation.
Latest Stock News:
Tejas Networks, a Tata Group company, has made big progress in the telecom industry. In October 2024, the company shared its financial results for Q2 of FY25. They showed great growth. The company’s revenue increased by six times, reaching ₹2,811 crore. This was much higher than ₹396 crore in the same period last year. They also made a profit of ₹275 crore. This is a big change from the ₹13 crore loss in Q2 of FY24. The growth happened because Tejas Networks sent a lot of 4G/5G equipment to BSNL. BSNL is expanding its network across India. Tejas delivered equipment to over 58,000 sites and got more orders to improve 4G sites in some areas.
In August 2024, Tejas Networks got a big order worth ₹7,492 crore from Tata Consultancy Services (TCS). The order is to supply 4G/5G equipment to about 100,000 BSNL sites. This is part of a larger contract to provide, support, and maintain Radio Access Network (RAN) equipment for BSNL’s 4G/5G network across India. This order has helped Tejas Networks become stronger in the telecom market.
Because of these good results, Tejas Networks’ stock price went up. After they announced strong results in October 2024, the stock price increased by 20%. It reached ₹1,427.55, which was the highest in the last three months. Over the last four years, the stock has grown a lot. It increased by 1,421%, going from ₹90 per share to ₹1,369.
On March 22, 2025, Tejas Networks told the stock exchanges (NSE and BSE) that they gave 2,62,854 equity shares to their employees. These shares were part of the company’s Stock Option Plans. Employees who exercised their stock options got these shares. Here is the breakdown of the shares:
Tejas Networks Limited Employees Stock Option Plan 2014: 1,500 shares
Tejas Networks Limited Employees Stock Option Plan 2014 – A: 52,426 shares
Tejas Networks Limited Employees Stock Option Plan 2016: 83,337 shares
Tejas Networks Limited Employees Stock Option Plan 2016: 7,500 shares
Tejas Restricted Stock Unit Plan 2017: 68,430 shares
Tejas Restricted Stock Unit Plan 2022: 49,661 shares
Because of this, the company’s paid-up share capital increased. It is now ₹1,76,32,24,400. This is divided into 17,63,22,440 equity shares of ₹10 each. Before the allotment, the paid-up share capital was ₹1,76,05,95,860, divided into 17,60,59,586 shares of ₹10 each.
Also, on March 12, 2025, Tejas Networks received ₹123.45 crore from the Ministry of Communications. This amount is an incentive under the Production Linked Incentive (PLI) scheme for Telecom and Networking Products. The PLI scheme is a government program to encourage the production of telecom products in India. The incentive is for the financial year 2023-24. This will help Tejas Networks grow more in the Indian telecom market.
Potentials:
Tejas Networks has plans to grow and improve. They will spend more money on research to make better products. This will help them stay ahead of other companies. They want to focus on new technologies for 5G and 6G networks, which will be important in the future. The company wants to expand into new countries where people need more telecom services. This will help them get more customers and sell more products. They also want to improve their wireless products, like 4G and 5 G. Better wireless technology will help telecom companies give faster and more reliable services. Tejas Networks may work with other companies to get stronger. Working together will help them make better products and enter new markets. They also want to keep providing services to the government and defence sectors. These contracts can give them a stable income over time. Finally, Tejas Networks wants to make its products more eco-friendly. They aim to make products that use less energy and cause less harm to the environment. This will help them attract customers who care about the environment.
Analyst Insights:
- Market capitalisation: ₹ 13,670 Cr.
- Current Price: ₹ 777
- 52-Week High/Low: ₹ 1,495 / 647
- Stock P/E: 20.6
- Dividend Yield: 0.00%
- Return on Capital Employed (ROCE): 3.68%
- Return on Equity (ROE): 2.06%
Tejas Networks is currently facing several challenges that may concern investors. One key issue is its low return on equity (ROE) and return on capital employed (ROCE), which indicates that the company is not generating strong returns from the capital it is using. ROE is only 2.06%, and ROCE is 3.68%, which are both relatively low compared to industry standards. This suggests that the company is not using its money efficiently to generate profits. Another issue is the company’s long debtor days (208 days), meaning it takes a long time to collect payments from its customers. This can put a strain on its cash flow, making it harder for the company to fund operations or invest in growth. The stock is currently trading at a price that is 3.67 times its book value, which is a bit high for a company that is not showing strong profits. This could indicate that the stock is overvalued, especially since the company is not generating good returns. Additionally, Tejas Networks has been reporting negative cash flow from operations, which is another red flag. Negative cash flow means that the company is spending more money than it is earning, which could eventually lead to financial problems if it continues over time. Lastly, the promoters’ holding in the company has decreased by 1.41% in the last quarter, which could signal a lack of confidence in the company’s future performance. Given these concerns—low returns, high stock price, long collection times, and negative cash flow—it may be risky to invest in Tejas Networks at this time.