Release Date: October 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Tejas Networks Ltd (BOM:540595, Financial) reported its highest-ever quarterly revenue of INR2,811 crore, with a profit after tax of INR275 crore.
- The company has significantly ramped up its wireless business, shipping over 30,000 sites this quarter and more than 58,000 sites cumulatively to BSNL networks.
- Tejas Networks Ltd (BOM:540595) has been selected for PTN and DWDM equipment by a Tier 1 telco in India for 4G and 5G network capacity expansion.
- The company is seeing good traction in international markets, with new customer wins in the Americas and Africa, and has received initial orders for network modernization in the US.
- Tejas Networks Ltd (BOM:540595) completed its merger with Saankhya Labs, potentially enhancing its product offerings and market reach.
Negative Points
- The company's working capital has increased by about INR100 crore, and its borrowing position stands at INR2,768 crore.
- International business saw a decline due to timing issues with shipments, contributing only 3% to overall revenues.
- The India government business declined by 4% of revenues year-over-year, mainly due to the tail end of contracts.
- The company faces challenges in securing private sector deals in India, as many operators prefer existing vendors for network upgrades.
- Tejas Networks Ltd (BOM:540595) does not provide specific revenue guidance, creating uncertainty about future financial performance.
Q & A Highlights
Q: Do you see the current level of execution sustaining in the upcoming quarters?
A: We don't provide revenue guidance, but our business pipeline and order book are strong, which should support continued execution.
Q: Can you provide an update on the BSNL 5G tender and any proof of concept activities?
A: We are conducting proof of concept for 5G upgrades in the 4G bands, but not yet for the 3.5 GHz band. The 5G upgrade is part of the current tender.
Q: How does the acquisition of radio frequency components by CG Power affect your partnership with Renaissance Electronics?
A: We use semiconductor components from Renaissance for our 4G, 5G RAN, but we are not involved in designing these components. Localization efforts are ongoing, but key semiconductors are still imported.
Q: What is the status of your international order pipeline?
A: This quarter was soft for international business, but we have won new strategic customers. We are expanding our footprint and see positive signs for future growth.
Q: Are you involved in the maintenance or OEM part of the network?
A: Maintenance and support are part of the tender, with a support agreement starting three years after deployment. This is not included in the current backlog.
Q: How does the company plan to accelerate international sales?
A: We are investing in sales channels and partnerships in targeted geographies like North America and Europe. We are also participating in trade shows to build our brand and win new customers.
Q: Can you share your thoughts on the enterprise side of the business?
A: We aim to build a portfolio serving both service providers and enterprises in wireline and wireless markets. We are focused on becoming a leading networking company from India.
Q: What is the expected timeline for the operations and maintenance contract to start?
A: The maintenance cycle begins three years after each deployment is commissioned, not at the end of the last deployment.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
