Tejas Networks, a leading telecom and networking products company, has reported a record-breaking revenue for FY25, crossing the USD 1 billion (~INR 8,433 crore) mark in annual revenues for the first time in its 25-year history. However, beneath the celebratory tone lies a more complex financial picture involving substantial write-offs, working capital pressures, and an anticipated slowdown in revenue momentum for FY26. Notably, ace investor Vijay Kedia’s firm holds 18,00,000 shares (1.02% stake of the company) worth INR 124.9 crore.
Historic Year in Revenues, Driven by BSNL Mega Project
CEO Anand Athreya announced that the company clocked INR 8,923 crore in revenues for the FY25, a staggering 3.6x growth year-on-year, largely propelled by the execution of the BSNL 4G rollout — one of the largest single-vendor RAN network deployments globally.
In Q4 alone, Tejas Networks reported revenues of INR 1,907 crore, up 1.4x YoY. The company marked the milestone of delivering 1,00,000 BSNL sites, calling it a “record time” achievement and a culmination of its collaboration with TCS, C-DoT, and BSNL.
Yet, the celebratory figures come with caveats.
Profitability Hit by Inventory and R&D Write-Offs
Despite robust topline growth, the company posted a Q4 PAT loss of INR 72 crore, pulled down by inventory obsolescence provisions and intangible asset write-offs totaling INR 140 crore. For the full year, PAT stood at INR 447 crore — still positive, but lower than potential given the revenue base.
Sumit Dhingra, CFO, clarified that these write-offs are part of an “ongoing evaluation” and tied to Tejas Networks’s position as a deep-tech, hardware-focused R&D company. The provisions are considered one-off in nature, although similar albeit smaller charges could recur as part of regular quarterly assessments.
Operating Metrics Reflect Execution Risk and Liquidity Pressure
Tejas closed the year with inventory of INR 2,367 crore and receivables of INR 4,884 crore, indicating a substantial working capital lock-up — not unusual for project-based businesses, but a red flag in terms of cash conversion. Net debt stood at INR 2,442 crore.
Cash collections of INR 1,900 crore during Q4 were seen as a positive, though future collections hinge heavily on milestone-based payments from BSNL and other public sector contracts.
FY26: A Transition Year with Mixed Visibility
The management made it clear that FY26 would not replicate the scale of FY25, terming it a “different kind of revenue structure.” With the large BSNL 4G rollout now substantially completed, Tejas will depend on smaller but strategic wins — both domestically and internationally.
Key projects in the pipeline include:
- BSNL 4G Add-On Orders & 5G Upgrades: Discussions are in advanced stages. Some 5G upgrades may fall under existing contract scope, but new band deployments (e.g., 3.5 GHz) may require fresh tenders.
- Vodafone Idea: Initial deployments completed; ongoing expansions expected in FY26.
- BharatNet (Phase III): Discussions with system integrators underway; several hundred to thousand crore opportunity.
- Railway Kavach: POC completed; tender delay noted.
- International Market Push: Through its strategic technology collaboration with NEC Japan, Tejas expects to gain access to new customers and joint go-to-market prospects in wireless RAN and core technologies.
While Arnob Roy, COO, declined to provide specific revenue guidance, he hinted at “several hundred crore to INT 1,000+ crore” scale opportunities for each major project, reinforcing confidence in the company’s expanding addressable market.
NEC Partnership and R&D Investments: Medium-Term Growth Catalysts
The tie-up with NEC Japan, announced earlier in the year, is expected to be transformative. It gives Tejas access to proven 4G/5G mobile core technologies and advanced Massive MIMO radios, alongside co-branding and sales support for global markets.
Roy confirmed that the NEC-related capex has not yet been fully recorded and will show up as intangible assets in future quarters, implying ongoing R&D capitalization. For FY25, employee cost capitalization stood at INR 289 crore — higher than the INR 250 crore in FY24 — indicating sustained investment in engineering talent and innovation.
Dividend, PLI, and Strategic Wins Highlight Corporate Maturity
Reflecting its milestone year, Tejas’s board recommended a 25% dividend (INR 2.5 per share), its first meaningful dividend in years. It also received INR 123 crore in PLI incentives for FY24 and a first tranche of INR 189 crore for FY25, providing a non-trivial margin buffer.
Challenges Ahead
While Tejas is justifiably proud of FY25, the outlook is nuanced:
- Revenue normalization is expected in FY26, given the absence of a mega anchor project like BSNL 4G.
- Working capital stress and execution risk on public sector projects remain a concern.
- Global tariff uncertainties (particularly with the U.S.) could dampen customer capex, although the impact is expected to be symmetrical across competitors.
- High employee and R&D costs, including ESOP expenses (~INR 80 crore in FY25), will pressure margins unless matched with steady revenue scale-up.
Tejas Networks Post-IPO Performance
Tejas Networks went public on 27th June 2017. The issue was a mix of fresh issue (~INR 450.00 crore) and offer for sale (~INR 326.69 crore). On listing day, Tejas IPO gave a return of 5.44% on investment. But soon the IPO turned into a multibagger and went up over 4000% from all-time low of INR 28.90 in 2020 to INR 1,485 in June 2024.
Conclusion
Tejas Networks stands at an interesting inflection point. Having proven its capability to deliver at scale, the next phase will test its ability to scale sustainably, diversify internationally, and drive recurring profitability without the crutch of a single mega contract.
The investments in NEC partnership, expanded product suite (including 800Gbps–1.2Tbps DWDM systems and 10G-PON platforms), and global sales network expansion signal ambition. But execution — not technology — will be the deciding factor in the next leg of Tejas’s growth story.