Buy Tejas Networks; target of Rs 1025: Emkay Global Financial

Emkay Global Financial is bullish on Tejas Networks has recommended buy rating on the stock with a target price of Rs 1025 in its research report dated January 21, 2024.

Broker Research

January 22, 2024 / 15:41 IST

Buy

26 Aug, 2025 12:21

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Emkay Global Financial's research report on Tejas Networks

Tejas Networks reported broadly in-line revenue growth of 41% QoQ, led by BSNL’s 4G project execution. But margins disappointed, as Tejas shipped primarily low-margin products in Q3; this is likely to improve from Q4, though. We see Tejas benefits chiefly from: 1) GoI emphasis on domestic manufacturing and the PLI scheme; 2) large spends on BSNL, BharatNet, and the Railways; 3) references from TCom and TCS, thus adding new clients; and 4) global move towards replacing Chinese telecom equipment.

Outlook

We cut our EBITDA margin by 100-300bps, as Tejas missed Q3 margin estimates on mix change, though we expect this to marginally reverse in coming quarters. Based on DCF valuation (WACC: 10.5%; terminal growth rate: 6%) we revise down our TP to Rs1,025 (19% upside, implying Dec-24E P/E of 21x) from Rs1,050 earlier; retain BUY.

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