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.