kashinath2013

I have been following Tejas Networks company for last 6-7 years. Here, I will present my business understanding about the company. The company Tejas Networks builds optical networking products like, switches and routers. These products are designed and developed in India. Six years back itself, it had customers in India, Mexico, Brazil, south east Asian countries, Africa and were getting into Middle east. This showed that their products are capable to meet ISP customer requirements. They had supplied switches/routers to BSNL and for Bharat Broadband project during 2G/3G era. In the year around 2010s, the entire telecom sector went down due to 2G corruption scam. All the vendors’ business got impacted including Tejas Networks.

Tejas Networks, launched IPO in the year 2017 at Rs. 257/-. It went upto 350-360 levels. But due to bad condition of telecom sector, business was down and this resulted in shares going down badly. There was no change in business fundamentals of the company for the share price to go down. In 2017-18, I started investing in Tejas Networks – “I always wanted to start a business, but didn’t have capital. Here, was a company doing everything which I would have done, if I had the capital. Hence, I started purchasing their shares and became part of their business.”

In the year around 2020-2021, Indian government decided to get rid of Chinese telecom equipment from the Telecom networks. With the political will at the center, which wanted to promote Indian companies and become competitive in the international market, helped Tejas Networks in a big way. Since, it had all the expertise and product to support BSNL to move to Indigenous technology. But to support a Big client like BSNL, it needed Big brand name and deep pockets for funding. Hence, Tejas Networks approached Tata’s to support in this endeavor.

Tatas took 54.5% stake in Tejas Networks for 1.8k Cr valuation and added another 1.8k Cr leading to total market cap of 3.6k Cr in 2021 Aug at Share price Rs.258. Tatas also acquired Saankhya Labs which specializes in semiconductor chip design, wireless communication technology and became subsidiary of Tejas Netoworks. TCS along with Tejas Network won the tender to upgrade 3G network to 4G network for BSNL. Total Deal value is 15k Cr. Out of which 7.5k Cr will go to Tejas network To supply 4G RANs for 1,00,000 sites and TCS will do the overall Integration and Data Center. In the meantime, Further deals are expected from BSNL for Tejas Network include, 5G upgrade and support and maintenance for next 8 years. Also, new Bharat broadband network deals are expected from BSNL. Other than this with the help of TCS, Tejas Network is trying to win tenders in international market for wired and wireless business.
From Rs.258 to Rs.1300 share price today (16th June 2024) it has been a phenomenal growth of 4X. There is a hope that it can become a big Telecom equipment vendor from India for the world. Hence, holding the Tejas Network shares for the long term. One more thing which gives confidence is the Tata brand name. They are considered to be one of the most ethical companies in India.

There are initial hiccups and delay in delivering the order. This is very natural when a small company needs to execute the order of this scale. To smoothen the supply of RAN equipment, they have collaborated with few vendors and streamlined the process. 4G core is implemented by CDOT – I am a bit hesitant, how reliable will that be, but hope TCS, Tejas might have thought about contingency. Till April 2024, they have supplied 9,000 4G RAN equipment. In next 1 year they are supposed to complete the BSNL order of installation of 1,00,000 4G sites. Keeping the fingers crossed.

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Update: 12 March 2025

Today the share price of Tejas Networks share is Rs. 676/-. That is an almost 50% correction from share price 9 month back (1300). Did I sell the shares in fear? No. The story behind the investment in the company remains the same. There are no changes in the business fundamentals. The company aims to be a world class vendor (OEM) for telecom products.

Update: 1st Sept 2025

The company has completed delivery of 1 lac 4G RAN equipment and BSNL has installed them. BSNL is currently in the process of stabilizing the 4G services. Today the share price of Tejas Networks share is Rs. 586/-. That is 55% correction from share price 1 year back (1300). Did I sell the shares in fear? No. The story behind the investment in the company remains the same. There are no changes in the business fundamentals. The company aims to be a world class vendor (OEM) for telecom products.