ValuePickr Forum

Tejas Networks - Product based IT business in a favored sector?

Locally, the company faces competition from Chinese players like Huawei. They give really high discounts for some products to strategically win orders which involves many products. It works for them because their portfolio is very wide.
Government business is lumpy and private capex hasnt picked up properly yet.

Internationally, Tejas used to earn good amount of revenue from OEMs but last year company decided to stop selling through OEM route and started selling with it’s own brand name. This resulted in drop on international revenues. Market is probably worried about uncertainty around this. However, I personally think this is a good step and can improve profitability in long run. In the USA, Indian companies have some advantage over chinese players because of recent woes around security.

Many employees who receive ESOPs sell them immediately and cash in. In previous correction when stock price had corrected to around 120 rs, the chairman and some more top members had bought significant amount of shares from the open market. This is around February this year which is not much far.

Invested and bought more on Friday


Agree with you their products are not comparable to Huawei and others who offer better solutions at competitive price.
Wonder what is the commercial viability of their patents. These patents may justly be marketing gimmicks nothing more. They are worthless unless they give some competitive or price advantage.

Exactly this is the main thing I am not able to understand. Promoters instead of buying in February (when they already know that this quarter is bad) could have done it later … I mean do they want to support stock price by showing their intent or they wanted retailers to buy seeing promoter buy…

They can definitely buy at lot cheaper as they say even next quarter they are not expecting government business.

I think they read the market reaction wrongly. Sanjay Nayak in every interview tells the market to not evaluate them on Q-o-Q basis but look at the financials yearly. They might have thought that the market would agree with them (?). Even on the investor day in May, they highlighted the same thing. So they were probably not expecting such a negative reaction from the market in my opinion. If you look at their sales before IPO also, it is similar due to dependence on government.

I think it is a good company run by people with high pedigree & even if it doesn’t become a multibagger due to lots of competition, it will not end up bankrupt / lose more value due to fraud etc. I am going to accumulate more on Monday.

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Apparently HDFC mutual fund has picked up a stake @ Rs ~84

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What is the source of information?

Trendlyne -

Even Reliance Nippon acquires 3L stocks

Tejas Networks Ltd - Disclosures under Reg. 29(2) of SEBI (SAST) Regulations, 2011

But SBI LifeInsurance has also sold a large chunck at 90 on Friday.
Source: Stockedge

Looks like there is lot of selling pressure in the stock which is providing very attractive entry points. But noone knows for how long the pain will continue.

It will require some good quarterly results to change the sentiments. I am surprised why insiders are not buying at these attractive levels.

Disclosure: Invested, accumulating with the falls

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Those ESOPs are hardly worth anything … ~1Cr and I guess it is good that they are giving it as they need to retain ppl … In campus even 10 yrs back they used to have a pretty good brand name for compensating employees well + learning was good for core E&C engineers

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Anyone knows any information on the ~250 Cr outstanding dues pending from BSNL? As per last Q&A, they were saying they should try to get it in September.
[If they get it, the cash position itself will be ~500 Cr while the Current m-cap is 720 Cr]

The company seems to have a pretty active FB page. Check this out -

Looks like the CEO was recently pitching in Rwanda & now the CTO is in Mexico. They seem to be at least trying their best to improve international sales

Hi Sarthak,

I am no expert on taxation. But my understanding for the low taxes is due to 2 reasons:

  1. Company is paying MAT
  2. Deferred Tax Assets accumulating from R&D Expenditure and Previous Year losses (FY15 and earlier)

Attaching excerpts from FY19 AR

The Group has recognised deferred tax assets on brought forward depreciation losses and accumulated 35 (2AB) expenditure. The Group has estimated that the deferred tax assets will be recoverable using the estimated future taxable profits. The unabsorbed depreciation and accumulated 35 (2AB) expenditure can be carried forward indefinitely as per Income tax law and the Group expects to recover these through future taxable profits


Despite the P&L showing negligible taxes, they have accounted a reasonable cash outflow for it on the Cash Flow Statement:



Just wanted to understand the investment case for Tejas Networks.

So the basic premise is that the government receivables are safe but long delayed and the international business will progressively replace most of the Bharatnet business. Is my understanding correct?

How long would you be willing to wait before the receivables start becoming iffy.


Tejas has entered South Africa in a JV with Tsiko Africa to provide rural connectivity. Looks like its a similar project like Bharatnet.


Thanks for the link @nityanandparab

On a lighter note, I was amused by following statement in article.

“SA’s ambitions broadband connectivity project – SA Connect – aims to deliver widespread broadband access to 90% of the country’s population by 2020, and 100% by 2030.”

I wonder why it would take only until 2020 to reach 90% and another 10 YEARS to reach 100%. Nevertheless, its good to see Tejas partnering with local companies in various countries. What is disappointing is that Tejas has not been doing well domestically apart from PSU based projects.

While Ciena, the biggest competitor of Tejas doubled its India revenue in last one year, Tejas did not show much growth. What it indicates is that products of Tejas are not being favored over Cienna and the later has not only been able to tape the Telecom infrastructure growth in India but also take market share from players like Tejas.

Following document talks about market share of telecom equipment companies in India. It’s a year old report, not sure about the current statistics.

Following document mentions that growth is expected to be more focused on WDM where Cienna is the leader while Tejas is leader in aggregation.

@sarthakkumar19_ Like you said, investment thesis for me is more based on growth expectations from USA and other countries. I still would like to understand more about why Tejas is not doing well in private sector domestically. What keeps me invested is the large addressable and growing market for Tejas and the fact that Tejas has just started working on Sales in many countries and for the kind of business they are in, it takes time for such efforts to show results. In USA, they have moved from being an OEM for some company to selling under their own brand name, this also takes time and might be very beneficial in future if executed well.



Since the South Africa project is somewhat similar to BharatNet, is it possible that they end up having receivables like BharatNet :slight_smile:

Easy to achieve it in urban and sem-urban densely populated areas where 90% population lives. For 10% needs vast geographic coverage and large investments.