Tejas Networks stock falls 4% despite strong Q1 results; shares up 60% YTD

Tejas Networks announced its Q1FY25 results on July 19, reporting a remarkable 696 percent increase in revenue at Rs 1,496 crore and a profit of Rs 77.48 crore.

Shares of Tejas Networks fell up to 4 percent on July 22 to hit an intraday low of Rs 1,310 apiece on NSE even after the company reported strong earnings for the first quarter of the current financial year(Q1FY25).

The company reported a net profit of Rs 77 crore as against a loss of Rs 26.29 crore in the year-ago period. Its revenue increased by 696 percent year-on-year to Rs 1,496 crore.

During the quarter, Tejas Networks saw its inventory rise significantly to Rs 3,853 crore. This increase is attributed to the ramping up of wireless shipments, which are expected to be converted into finished goods and shipped in the coming months.

Additionally, trade receivables stood at Rs 2,052 crore, reflecting the higher shipments made during Q1.

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During this period, the company managed to collect approximately Rs 1,170 crore. Its working capital also saw an increase in Q1. By the end of the quarter, Tejas Networks' cash position was at Rs 612 crore.

Tejas Networks is actively targeting several key opportunities to expand its market presence and business operations. These include the expansion of BSNL’s 4G and backhaul network, which will significantly enhance connectivity and network performance.

Another major opportunity is Bharatnet Phase 3, aimed at extending broadband connectivity across rural India.

The company is also involved in the Indian Railways' Kavach project, a Collision Avoidance System designed to improve railway safety. Additionally, Tejas Networks is looking to expand its network backbone within the utilities segment, addressing the increasing demand for robust infrastructure.

Internationally, the company is pursuing broadband deals with Tier 1 operators in the Middle East, as well as wireless and metro aggregation deals with a Tier 1 operator in South Asia, positioning itself as a key player in these growing markets.

At 10 am on July 22, Tejas Networks stock has recovered to trade half a percent lower at Rs 1,395.65 on the National Stock Exchange (NSE).

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So far this year, the stock has surged nearly 60 percent, beating benchmark Nifty's returns of 12 percent during this period. In the last one year, the stock has rallied nearly 80 percent.

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