Tejas Networks Share Price Surges After Robust Q2FY25 Performance: Key Takeaways

The share price of Tejas Networks surged to hit the 20% upper circuit at Rs 1,425.20 on the NSE during Monday’s early trading session. This significant rally pushed the stock to a fresh three-month high, driven by the company’s robust financial results for Q2FY25, released last Friday.

Strong Financial Performance in Q2FY25

Tejas Networks delivered a stellar performance in the second quarter of FY25, reporting a substantial increase in revenue and profitability:

On a consolidated basis, the company reported a 581.74% YoY increase in total income, from Rs 413.92 crore in Q2FY24 to Rs 2,821.87 crore in Q2FY25. Profit after tax (PAT) showed a remarkable recovery, moving from a net loss of Rs 12.64 crore in Q2FY24 to Rs 275.18 crore in Q2FY25. This significant boost in profitability highlights the company’s strong operational performance and growth potential.

BSNL Contract Boosts Revenue Growth

A significant portion of Tejas Networks’ Q2FY25 success can be attributed to the ramp-up of BSNL’s pan-India network. The company shipped equipment for over 58,000 sites during the September quarter. Additionally, Tejas Networks received further orders for 4G sites in a few circles, contributing to the sharp increase in revenue.

The company’s unexecuted order book as of September 30, 2024, stands at Rs 4,845 crore, reflecting a strong pipeline for future growth.

Future Growth Opportunities

Tejas Networks is well-positioned for continued expansion, with multiple upcoming opportunities, including:

• BSNL’s 4G and 5G upgrade contracts.
• Installation of the Kavach system for Indian Railways, a safety initiative.
• A private 5G application order for a large enterprise in India.
• Expansion of Bharatnet Phase 3, a key government initiative.

These contracts and projects offer a promising outlook for the company’s future revenue growth and market presence.

Company Overview

Tejas Networks, incorporated in 2000, designs and manufactures wireline and wireless networking products with a focus on technology innovation and R&D. The company’s carrier-class products are widely used by telecom service providers, utilities, government agencies, and defense networks in over 75 countries. It is a subsidiary of Panatone Finvest Limited, itself a subsidiary of Tata Sons Private Limited.

As of today, Tejas Networks boasts a market capitalisation of Rs 23,100 crore. The stock has been a strong performer, gaining 52% over the past year and 47% year-to-date (YTD).

Conclusion

The share price of Tejas Networks at Rs 1,425.20 reflects the company’s strong financial performance and bright future prospects. With multiple large-scale projects in the pipeline, including BSNL’s 5G upgrade and Bharatnet Phase 3, Tejas Networks is poised for sustained growth in the coming quarters.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.