Tejas Networks Ltd Q4 FY24 Earnings Conference Call Insights

Key highlights from Tejas Networks Ltd (TEJASNET) Q4 FY24 Earnings Concall

• Financial Performance
  • Achieved best ever quarter and year in company’s history.
  • Q4 FY24 revenue at INR 1,327 crore, PAT INR 147 crore.
  • FY24 revenue INR 2,471 crore, PAT INR 63 crore.
  • Ended year with strong order book of over INR 8,200 crore.
• Major Projects/Wins
  • Shipped over 10,000 sites for BSNL 4G/5G RAN deployment.
  • Completed supply of ~50,000 IP/MPLS routers for BSNL 4G/5G backhaul.
  • Strategic wins for WDM and switching products in critical infra sector.
  • Partnership for FTTH GPON equipment, manufacturing and training.
• Product Portfolio Update
  • Multiple ongoing PoCs with potential customers for RAN products.
  • Progress on wireline business – BSNL IP/MPLS, FTTH wins.
  • 22 new patents granted in Q4, total 335 approved patents.
  • Recognized as representative vendor by industry analysts.
• Corporate Updates
  • Received award for IP/MPLS products supplied to BSNL.
  • Merger process with Saankhya Labs progressing well.
  • Management changes – Arnob Roy appointed ED & COO.
  • Subsidiaries received incentives under PLI and semiconductor schemes.
• Market Opportunity
  • Strong growth expected in addressable wireless and wireline markets over next 5 years.
  • Large opportunities in India – BSNL 4G/5G, private telco capex, BharatNet, broadband rollouts.
  • Globally – $100 bn+ broadband investments in US/Europe, 4G/5G deployments in emerging markets, $8 bn+ utility network modernization.
• Major Projects/Wins
  • Shipped over 10,000 sites for BSNL 4G/5G RAN deployment.
  • Supplied ~50,000 IP/MPLS routers for BSNL 4G/5G backhaul network.
  • Strategic wins for WDM, switching products in critical infrastructure sector.
  • Partnership for local manufacturing, training for FTTH GPON equipment.
• Product Portfolio
  • End-to-end portfolio spanning wireless/wireline access, metro/core, management software.
  • Serves 4G/5G mobile, broadband, enterprise data, critical infrastructure networks.
  • 22 new patents granted in Q4, total 335 approved patents.
• BSNL 4G/5G Project
  • Expects to complete supply and majority of deployment/commissioning in FY25.
  • News of delays clarified – RAN being integrated with existing core where C-DoT core not ready.
  • Once C-DoT core deployed, RAN will be parented to it in those zones.
• International Business Opportunities
  • Increasing focus and investments in international markets like US, Europe, emerging economies.
  • Several ongoing projects and opportunities being pursued actively.
  • Key areas – broadband, 4G/5G deployments, utility network modernization.
• Working Capital Cycle
  • Significant increase in Q4 due to BSNL 4G project execution prep.
  • Working capital expected to taper down over next few quarters as project progresses.
  • To be seen in context of this large Rs 7,700 cr project.
• Private Telcos Opportunity
  • Engaged in multiple Proof-of-Concepts (POCs) with private telcos for RAN deployments.
  • $3 billion+ capex potential for RAN rollouts by private telcos in India.
  • Exploring international opportunities as well.
• Manufacturing Capacity
  • Invested in scaling up manufacturing capacity to meet BSNL project timelines.
  • Established capability to execute large-scale projects within stringent deadlines.
• Working Capital Management
  • Working capital tied up in component procurement for manufacturing pipeline.
  • Temporary phenomenon as inventory gets converted to finished goods and revenue realized.
  • Working capital expected to reduce as project execution progresses and collections increase.
• Profitability Improvement
  • Margin improvement in current quarter after lower-margin network equipment deployment in previous quarter.
  • Overall margins a blend of wireless and wireline product mix.
  • Trajectory expected to improve further based on product mix.
• Strategic Partnership
  • Long-standing strategic partnership with Valiant Communications for utility market.
  • Valiant’s teleprotection technology integrated with Tata’s transmission products.
  • Provides optimized solution for utility and critical infrastructure customers.
  • Partnership helps explore opportunities in India and globally.