Written by EduInvesting Team | August 01, 2025
At a Glance
Tejas Networks, the Tata-backed telecom equipment maker, is a walking paradox. On one hand, it’s bagging fat orders (₹1,525 Cr BSNL 4G contract), PLI incentives, and global 5G collaborations. On the other hand, Q1 FY26 delivered a whopping ₹194 Cr loss, revenue collapse of -87% YoY, and an OPM of -67% – numbers that would make even auditors spill their chai. Stock price? ₹576, barely clinging to support after a 60% slide from its ₹1,460 high. Investors love the Tata tag, but at a P/E of 58, the only thing growing faster than its orders is its losses.
Introduction
Once upon a time, Tejas Networks was the bright, nerdy kid in the telecom class – all R&D, innovation, and no drama. Then Tata Sons adopted it, injected money, and placed it at the center of India’s telecom revival dream. Fast forward to 2025: the company is riding the 5G/Open RAN hype train but burning cash like it’s at a bonfire party.
Every quarter is a seesaw. FY25 was a blockbuster with ₹447 Cr PAT, then Q1 FY26 comes in like a wrecking ball with losses bigger than some peers’ annual profits. Market sentiment? Confused. Is this the next Tata Elxsi or another ITI – government orders today, delays tomorrow?
Business Model (WTF Do They Even Do?)
Tejas designs and manufactures telecom gear – optical networking, wireless broadband, routers, switches – the works. Their products power telecom operators (BSNL, Airtel, Vi), utilities, defence networks, and international clients in 75+ countries.
The company thrives on large government contracts, PLI subsidies, and tech collaborations (recently with NEC, Rakuten Symphony). But here’s the kicker: these contracts often come with razor-thin margins, unpredictable payments, and execution delays. While R&D-driven products give them an edge, scaling profits in a cutthroat market is like building a 5G tower in a storm – looks promising, but dangerous.
Financials Overview
Q1 FY26:
- Revenue: ₹202 Cr (-87% YoY)
- EBITDA: ₹-136 Cr (vs ₹122 Cr profit YoY)
- Net Profit: ₹-194 Cr (ouch)
- EPS: ₹-10.98
FY25:
- Revenue: ₹7,562 Cr (+206% YoY)
- PAT: ₹175 Cr (-61% YoY from FY24’s ₹447 Cr)
- OPM: 12%
- ROE: 12.8%
Commentary: This company’s financials have more mood swings than a teenager. One quarter boom, next quarter bust.
Valuation
- P/E Method
- EPS (TTM) ≈ ₹10.45 → P/E ≈ 55.1x.
- With Q1 losses, forward EPS could turn negative → P/E meaningless if losses persist.
- EV/EBITDA
- EV ≈ ₹11,000 Cr
- EBITDA (FY25) ≈ ₹892 Cr
- EV/EBITDA ≈ 12.3x (reasonable if growth resumes, risky if margins shrink).
- DCF
- Aggressive growth assumptions (20% CAGR) → fair value ~₹450-550.
- Conservative assumptions → ₹350-400.
Fair Value Range: ₹400 – ₹550 (Current price is barely hanging in range).
What’s Cooking – News, Triggers, Drama
- BSNL 4G Order (₹1,525 Cr) – Big order, execution risk high.
- PLI Incentives (₹189 Cr) – Boosts cash but won’t save margins.
- CEO Exit (June 2025) – Anand Athreya out, Arnob Roy interim CEO; leadership shake-up mid-execution is risky.
- Global 5G Partnerships – Collaborations with NEC, Rakuten could open new markets.
- Tata Branding – The Tata halo keeps investors hopeful.
Balance Sheet
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Assets | 3,602 | 8,203 | 10,462 |
| Liabilities | 801 | 3,220 | 3,479 |
| Net Worth | 2,973 | 2,976 | 3,667 |
| Borrowings | 50 | 1,884 | 3,407 |
Remark: Assets ballooned, debt skyrocketed. The Tata name may comfort, but leverage levels scream caution.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Ops | -380 | -2,036 | -491 |
| Investing | -581 | 430 | -655 |
| Financing | 999 | 1,713 | 1,286 |
Remark: Negative operating cash flows = burning cash faster than they can raise it. Financing keeps them afloat.
Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 12.8% |
| ROCE | 15.5% |
| P/E | 58 |
| PAT Margin | 2.3% |
| D/E | 0.93 |
Remark: Ratios are a mixed bag – looks sexy on ROCE, but stressy on cash flows.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 922 | 2,471 | 7,562 |
| EBITDA | 16 | 269 | 892 |
| PAT | -36 | 63 | 175 |
Remark: Revenue exploded post-BSNL orders, but PAT remains fragile.
Peer Comparison
| Company | Rev (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| ITI Ltd | 3,616 | -268 | NA |
| Tejas Networks | 7,562 | 175 | 58 |
| Sterlite Tech | 4,483 | -13 | NA |
| Optiemus Infra | 1,890 | 63 | 82 |
Remark: Tejas is the biggest in revenue among peers but bleeds profits in bad quarters like a drama queen.
Miscellaneous – Shareholding, Promoters
- Promoters (Tata Sons via Panatone): 53.73%
- FIIs: 6.14% (dropping)
- DIIs: 4.72%
- Public: 34.94%
Promoters stable, FIIs slowly exiting, public loading up – risky cocktail.
EduInvesting Verdict™
Tejas Networks is a high-tech play with the Tata seal, strong order book, and cutting-edge products. However, it’s also a rollercoaster of losses, negative cash flows, and execution risks. The ₹194 Cr Q1 loss shows how volatile this ride can be.
SWOT Snapshot
- Strengths: Tata backing, 5G/Open RAN leadership, strong order pipeline.
- Weaknesses: Execution delays, negative cash flows, leadership turnover.
- Opportunities: Global expansion, PLI incentives, government digital push.
- Threats: Order delays, margin erosion, rising debt.
Conclusion: Tejas Networks is like a rocket – can either soar to the moon or explode on the launchpad. For investors, it’s not a sip of chai; it’s a double espresso – high risk, high buzz, and maybe a crash later.
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