Strategic partnership with BEL for domestic and external defense communication market. Received orders worth 60cr - Link
Defense communication can be a big opportunity with government support.
Disclosure: Invested
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If in a worse case scenario Vodafone Idea were to fail, customer options would dramatically shrink and the networks of the two remaining major carriers would be further overloaded, exacerbating patchy coverage and call drops common in India.
There’s bound to be more congestion, there is going to be further deterioration in quality," said T.V. Ramachandran, president of Broadband India Forum.
It would also represent a huge setback to India’s push to make government services accessible to hundreds of millions of Indians via the internet.
Any exit would hurt telecom gear makers such as Finland’s Nokia, Sweden’s Ericsson and China’s Huawei Technologies and ZTE Corp, industry executives said.
Bharti Airtel and Vodafone Idea use equipment and services from all of these vendors, unlike Reliance’s Jio, whose network has been built largely by a unit of South Korea’s Samsung Electronics.
If domestic players are relying on Huawei and Samsung, Who is using Products of Tejas? Can some one help me on this?
Source https://www.business-standard.com/article/companies/after-13-bn-agr-hit-future-of-india-s-tattered-telecom-hinges-on-govt-aid-119112800562_1.html
As per this report, BSNL has paid 1700 Cr out of 10000 Cr that they owe to creditors. How much of it has come to Tejas. No idea. Any link to the 10% rise in the share price today. Does anyone have a clue.
Q3 Results
https://www.bseindia.com/xml-data/corpfiling/AttachLive/6a2f51d1-d2c3-40b7-a2e5-158169a9315f.pdf
This is quite a disaster. Contrary to all the claims made by the management on CNBC and elsewhere about export business and recovery of the receivables etc., situation simply hasn’t changed. This can happen I guess to any business but what I find shocking is the expensing of about 98 Cr of erstwhile ‘Deferred Tax Assets’ in the PnL. So essentially the only place this company has rosy financials, i.e the PnL also is now compromised.
The reason is equally comedic. Buried deep in the Notes to Accounts is this gem
This has to be seen in conjunction with the IT (and also CESTAT) related Notes
I think there is perhaps more than business headwinds ailing this company.
Disc: Following out of curiosity. No holdings, never held.
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Apart from tax issues, Revenues became half of last year. This is disastrous. Means CEO assurances of healthy operations were far from reality.
Really bad results. For me, the biggest negative is the bullish management commentary last quarter of a turnaround in Q3/Q4.
It was a cyclical value play for me with a bet on international business. But they are not able to scale it up as clear from Q3 results.
Surprisingly, the stock hasn’t hit lower circuit which means there are buyers even after bad Q3 results. Probably because they have started receiving pending cash from BSNL.
Disclosure: Completely sold today with 20% gain. May revisit as a deep value buy in future if there is extreme selling pressure on the company
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Really bad results esp the loss reported due to tax reversal. On the sales front, I think they are making the right efforts.
Getting international business takes time and generally product of this nature will have quite long sales cycle. Winning order from carriers is time consuming.
But they are winning orders which is good sign, but they have to tone down their bullishness and give more realistic picture.
Just listened to the concall. Based on the management commentary, things should start improving for the company from next year (with this year as base) as international business will continue to grow.
But my biggest problem now is how to trust management commentary. I would like to see how things pan out during this quarter in terms of order book/execution.
“it is not probable that sufficient future profits will be available”
a.k.a. we are in deep-shit and will likely remain so!
A comedic gem alright!
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Vijay Kedia bought stake in the company this week with around 7.54 Lacs shares @ price 49.19 , valuing stake at about 3.7 Cr.
Disc: not invested
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5g opportunity around the corners requires ofc network to be expanded 5x as 5g can’t work with non ofc. Such huge network expansion is a major opportunity of company like Tejas. With Chinese players not standing chance to get into this space in India, there stands a immense oppourtunity for this company.
Disc: invested < 1% to start with to build conviction on the story with 5g as theme for next several years.
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Link to agm held last week.
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Latest investor presentation. Big improvement in financials and management is confident of maintaining the current runrate.
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New territory… slowly but definitely good going for Tejas
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Tejas Networks - AR Summary 2021- https://drive.google.com/file/d/1oGodIKCJx2fHlicxWARrFxY-TFKmDfzq/view?usp=sharing
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There’s little difference between 5G and LTE. You can just replace radios and everything will work with 5G. There is a mis-normer that capex will be driven by 5G, when it will be driven by improving cash flows and ARPUs. Key advantage 5G offers is mmwave, which could aid backhaul. I would be wary of 5G thesis driving capex.
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@vikas_sinha @arunjacob @fundoo @Pratik_Patel9 @Prash Looks like Tejas do have certain ASIC products. Check out their TJ1400P-M4 series switches. They use ASIC. https://www.tejasnetworks.com/main-control/download/1548768128.pdf. So I guess they are developing ASIC based products when feasible/needed.
Your point is right but the tower density for good 5g network quality is 3x (look at china tower corp tower expansion plans) of 4g at minimum so new backhaul (assuming will be OFC based) will create opportunity. But I think FTTH opportunity in India has so much upside and ARPU’s are much better with FTTH. But many risks(consistency of import/security policy in India, vendor approval of major telcos etc.) lay ahead in all of this working in favor of tejas.
Discl: small position (~1.5%)
There is huge over-capacity of fiber and other related assets in India after all the telecos other than 3 went bankrupt. This is especially the case for the middle mile. Dark fiber is available for cheap and is severely underutilised.
Your point is right but the tower density for good 5g network quality is 3x
Not true. There is nothing fundamentally different in 5G vs newer 4G tech(other than mmwave, whose usecase is limited).
(look at china tower corp tower expansion plans)
There are other reasons to do capex and deploy more towers. Most of it is incremental over time and largely driven by increase in revenues. In India telecos don’t have money to do more capex.
new backhaul (assuming will be OFC based)
5G mmwave increases P2P wireless link backhaul by a huge margin so there is more incentive to deploy these where fiber is too expensive to put, but there already is lots of fiber for middle mile available.
But I think FTTH opportunity in India has so much upside
Yes, the last mile fiber in India has lots of opportunities. A lot of it is done by LCOs, not by larger telecos/internet companies, because it is capex heavy and difficult business. Not to mention that a lot of last mile FTTH laid has questionable legality.
But many risks(consistency of import/security policy in India, vendor approval of major telcos etc.)
The biggest challenge for likes of Tejas is that Huawei has excellent products for a very cheap price for R&S. Ubiquiti, Mikroitk are also expanding footprint, not to mention likes of Juniper, Cisco. A lot of what they sell for passive GPON/GEPON FTTH deployments like ONUs/OLTs are dirt cheap to buy from China. Why would someone buy from Tejas? For telecos like Jio, they’ve done a big deal with Cisco. Tejas just isn’t big enough to do deals like that.
The only play I can see here is that if government somehow steps in to materially change something.
Couple of points here
Huawai is unofficially blacklisted.They can bid all they want, they wont get any biz nor will any supplier who uses their product.
Tejas network is already on Bharatnet contracts, so it’s switches will be used and their qtrly presentation has a few mention of overseas gov contracts too.
I disagree that dark fibre is unused, we seem to be underserved rather than unused. The likes of HFCL, Sterlite the biggest players who make OFC are up because Jio, GOI, Railtel is buying a few lakh KM of OFC. All of them need switches are different points of splitting and headend.
On a unrelated tangential note, both Juniper and Cisco switches wont be used in defence projects because the encryption key generation was found to be deliberately compromised allowing MITM attack with over 20% success rate. So, these facts tend to help a nominally Indian company