Tejas Network zooms 20% to 52-week high on stellar Q4 score, Emkay raises target

In the Q4, Tejas Networks witnessed an increase in inventory, which surged to Rs 3,738 crore. This rise was attributed to acquiring crucial long-lead components to expedite the delivery of several critical large orders, notably for BSNL 4G RAN.

Shares of Tejas Networks zoomed 20 percent on April 23 to hit a 52-week high of Rs 1,088.25 on the NSE, a day after the company reported robust earnings for the quarter ended March 2024 with margins and revenue beating the Street estimates.

At 10:11 am, shares of Tejas Networks locked at the 20 percent upper circuit There were pending buy orders of 25,679 shares, with no sellers available. In the last one year, the stock has rallied around 65 percent, outperforming benchmark Nifty 50 which has risen 26 percent during this period.

The company's consolidated net profit came in at Rs 146.78 for the quarter, compared to a loss of Rs 11.47 crore a year ago period, led by BSNL’s 4G project execution. The telecom equipment company saw growth in all product segments led by the wireless business.

Tejas benefitted from the government push for local manufacturing and the PLI scheme, large spends on BSNL, BharatNet, and the railways. References from TCom and TCS too helped the company add new clients.

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The global move towards replacing Chinese telecom equipment also helped it deliver robust numbers in Q4FY24.

Analysts at Emkay Global expect Tejas Networks' FY25 revenue to be 4x FY24 revenue on BSNL and BharatNet execution. It increased the revenue forecast for FY25 and FY26 by 6 and 7 percent on account of the beat on revenue estimate. The brokerage also raised the EBITDA margin estimate by 150-10 bps on the margin beat in Q4.

Tejas Networks said it received Rs 32.66 crore incentive in FY23 under the PLI scheme for telecom and networking products. Its EBITA surged 669 percent on-year to Rs 248 crore in the January-March quarter and its order book stood at Rs 8,221 crore by the end of Q4.

Following the stellar Q4 show, Emkay retained its 'buy' rating on Tejas Networks with a revised target price of Rs 1,100 per share compared to Rs 975 earlier.

Also Read | Tejas Networks Q4 results: Company turns into black with net profit of Rs 147 crore

Tejas Network’s inventory increased to Rs 3,738 crore in the quarter from Rs 2,683 crore in the previous year. The company said it secured “key long-lead components for expediting delivery of several critical large orders–primarily BSNL 4G RAN”.

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