Synopsis:
Tejas Networks struggles with weak orders, cash flow issues, delayed payments, and losses, leading FIIs and Vijay Kedia to exit amid doubts over sustainable growth.
This company, once celebrated as a pioneer in India’s telecom equipment space, has been known for driving innovation and shaping the nation’s connectivity ambitions. Over the years, it attracted both institutional and well-known investors, delivering massive wealth creation and establishing itself as a key player in the industry.
However, recent developments paint a different picture. Foreign investors have cut their stake sharply, while well-known market veteran Vijay Kedia has also exited. With profitability under strain, cash flow pressures, delayed receivables, and a shrinking order book, this article explores why the stock has fallen from grace and whether it still holds potential for a revival.
Tejas Networks Limited’s stock, with a market capitalisation of Rs. 10,844 crores, fell to Rs. 608.20, hitting a low of up to 2.08 percent from its previous closing price of Rs. 621.15. However, the stock over the past year has given a negative return of 51.6 percent.
What happened?
In 2020, Tejas Networks was generating just Rs. 50–100 crore in quarterly revenues. As orders started pouring in from major clients like BSNL, quarterly sales surged, crossing Rs. 500 crore by late 2023 and touching an impressive Rs. 2,500 crore in the December 2024 quarter. The sharp turnaround fuelled strong investor optimism.
But by the close of FY25, cracks began to surface. Although profits had multiplied, cash flows failed to keep pace. Rising inventory levels strained the company’s cash conversion cycle, while a stagnant order book raised doubts about its growth pipeline.
The pressure culminated in the March 2025 quarter, when Tejas slipped back into losses. Even a PLI (Production Linked Incentive) scheme milestone wasn’t enough to calm investor nerves. Provisions and write-offs linked to obsolete inventory worth over Rs. 100 crore dragged the company into a Rs. 62 crore standalone loss. On the surface, revenue growth looked healthy at 38%, reaching Rs. 1,800 crore. But a closer look revealed the underlying weaknesses.
Revenue share
Although Tejas Networks’ official revenue split suggests that only 6% of its business comes from the government and exports, the reality is more nuanced. The bulk of its domestic sales are skewed towards quasi-government entities such as BSNL and large telecom operators like Vodafone, which behave very differently from private-sector clients.
This dependence brings with it structural issues such as delayed payments, inconsistent order inflows, and weak cash conversion. Compounding this is the company’s struggle with excess inventory, much of which has been written off or provisioned for due to rapid technological obsolescence.
These challenges have not only pushed Tejas back into losses but also meant that even during profitable phases, its operating cash flows remained under significant strain.
Adding to these concerns is the mismatch between Tejas Networks’ topline and its order visibility. While the firm reported revenues nearing Rs. 9,000 crore in FY25, its order book as of June 2025 stood at just about Rs. 1,200 crore, a steep gap that signals potential revenue volatility in the near future.
This weak order pipeline raises questions on the sustainability of recent growth and implies that investors need to set realistic expectations about the company’s ability to scale consistently. In essence, while headline revenues look impressive, the underlying picture reveals structural risks that could weigh heavily on future performance.
Also read: 1:10 Bonus Issue: Stock in focus after company reports net profit of ₹7.43 Cr
Changes in shareholdings
Once celebrated as a multibagger, the stock has recently lost its shine among investors. As per Trendlyne data, foreign institutional investors (FIIs) have cut their holdings from 11% to 6% over the past two years.
Veteran investor Vijay Kedia has also exited most of his position. After a steep 50% decline from last year’s peak, the stock now hovers around crucial support levels.
Q1 Financial Highlight
In Q1FY26, revenue stood at Rs. 202 crore, a sharp decline of 87% YoY from Rs. 1,563 crore in Q1FY25 and down 89% QoQ from Rs. 1,907 crore in Q4FY25. Profit performance also weakened, with a net loss of Rs. 194 crore compared to a profit of Rs. 77 crore in Q1FY25 and a loss of Rs. 72 crore in Q4FY25. This indicates significant pressure on both the topline and the bottom line sequentially as well as annually.
Despite the weak quarterly performance, long-term growth remains robust with a 3-year profit CAGR of 109%, sales CAGR of 153%, and ROE CAGR of 5%. While the recent contraction reflects near-term challenges, the strong multi-year trajectory highlights the company’s ability to scale revenue and profitability over time.
Written By Fazal Ul Vahab C H
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
