Tejas Networks Limited is an India-based optical, broadband, and data networking products company. It designs, develops, and sells high-performance products to telecommunications service providers, internet service providers, utilities, and government entities across more than 75 countries. The company's product portfolio includes both wireline and wireless equipment. The wireline business focuses on carrier-ethernet switching, routing products (IP/MPLS), and optical transmission (DWDM, GPON). These products are critical for building network backbones, as seen in their significant role as a supplier for India's national broadband project, Bharatnet. The wireless business is centered on developing 4G/5G Radio Access Network (RAN) equipment for public and private network deployments. Tejas Networks has a strong focus on research and development, evidenced by a substantial portfolio of global patents. The company is strategically positioned to capitalize on the global transition to next-generation telecommunication technologies, with a heavy concentration in the Indian market while actively pursuing international expansion.

Official Website: ir@tejasnetworks.com

• Revenue Performance:

• Revenue from Operations for Q3 FY26 stood at INR 307 Cr, representing a sequential growth of 17% from INR 262 Cr in Q2 FY26.

• For the nine months ended December 31, 2025 (9M FY26), revenue was INR 771 Cr, a significant decline from INR 7,016 Cr in the same period of the previous fiscal year (9M FY25).

• Profitability:

• The company reported a Profit After Tax (PAT) of INR -197 Cr for Q3 FY26. This is an improvement from a loss of INR -307 Cr in Q2 FY26 but a sharp reversal from a profit of INR 166 Cr in Q3 FY25.

• The loss before tax (PBT) for the quarter was INR -303 Cr.

• Expenses for the quarter were impacted by provisions for past service costs on employee benefits (INR 9.85 Cr) and warranty expenses (INR 24.35 Cr).

• Order Book:

• The closing order book at the end of Q3 FY26 was strong at INR 1,329 Cr, up from INR 1,204 Cr at the end of Q2 FY26.

• The order book is heavily concentrated in India, which accounts for 92% of the total, with the remaining 8% from international markets.

• Balance Sheet and Cash Flow:

• Working Capital: Net Working Capital decreased to INR 4,312 Cr from INR 4,906 Cr in the previous quarter. This was driven by a reduction in Trade Receivables to INR 3,284 Cr (from INR 4,026 Cr). Inventory remained high at INR 2,363 Cr.

• Debt: Net Debt was reduced to INR 3,349 Cr from INR 3,738 Cr in Q2 FY26. The reduction was attributed to lower working capital requirements, which was partially offset by capital expenditures. Gross debt stands at INR 3,885 Cr.

• Cash Position: Cash and cash equivalents improved to INR 537 Cr at the end of Q3 FY26, compared to INR 417 Cr at the end of Q2 FY26.

The company shows sequential revenue growth and narrowing losses, but profitability remains a challenge, and the balance sheet is characterized by high working capital and significant debt.

• Intellectual Property:

• The company has a strong focus on R&D and innovation, having filed 26 new patents in Q3 FY26 alone.

• Cumulatively, Tejas has filed 613 global patents, of which 370 have been granted, indicating a robust portfolio of proprietary technology.

• Product Innovation:

• The TJ1400 UCB product received the "Excellence Award for the Most Innovative Product/Service (Global)" at the Telecom Review Leaders’ Summit in December 2025, validating its technological capabilities on an international stage.

• Strategic Domestic Position:

• Tejas is positioned as the largest supplier of IP/MPLS Routers for Bharatnet Phase-III by the number of packages won (7 out of 12). This deep integration into India's critical national infrastructure projects provides a significant competitive moat in the domestic market.

The company's uniqueness stems from its strong, internally developed intellectual property and its strategic role as a key technology provider for India's critical telecom infrastructure projects.

• Key Market Drivers:

• The proliferation of Artificial Intelligence (AI) applications is expected to drive massive growth in data traffic, necessitating network upgrades.

• Significant investments in AI data centers are creating huge demand for high-speed connectivity solutions, a core area for Tejas's wireline products.

• Emerging markets continue to present opportunities with the ongoing expansion of 4G networks and new deployments of 5G technology.

• Company Outlook:

• The long-term outlook is viewed as positive, underpinned by these strong industry drivers and rapid technology transitions.

• The company anticipates increased traction for its new products in both India and international markets.

The industry outlook is favorable, driven by secular trends in AI, data center growth, and 5G deployment, which align directly with the company's product offerings.

• Geographic Expansion:

• While revenue is currently dominated by India (85% in Q3), the company is actively pursuing international growth.

• Strategic partnerships with NEC and Rakuten are being leveraged to increase international customer engagements for wireless products, particularly in Europe, LATAM, and Africa.

• Recent strategic wins for optical products in Europe, Africa, and Asia are providing momentum for further international expansion.

• Product-Led Growth:

• The quarter's revenue was primarily driven by the sale of wireline products to private customers in India and international clients.

• Wireless products are now beginning to lead international sales engagements, indicating a diversification of growth drivers.

• Customer Base Expansion:

• The company is seeing increasing adoption of its wireline products among leading private telecom operators in India.

• New customer wins include a broadband ISP in Africa, a power sector company in Southeast Asia, and a sovereign data center in India.

Growth is being driven by international expansion efforts, increasing adoption by private telcos, and the introduction of new wireless products into global markets.

• Wireless Business:

• International Markets: Multiple ongoing Points of Concept (POCs) and commercial negotiations are underway for 4G/5G RAN equipment in international markets.

• Private 5G Networks: The company has secured multiple wins for private 5G deployments in India for specialized applications in ports and mines.

• Critical Infrastructure: Tejas was selected as the 5G RAN supplier for a section of the Delhi-Mumbai railway corridor for a pilot project, opening a new vertical for growth.

• BSNL Order: A large add-on purchase order of INR 1,526 Cr for 18,000 sites from BSNL is anticipated, though currently delayed.

• Wireline Business:

• Bharatnet Phase-III: Having won 7 of the 12 packages announced, Tejas has a significant opportunity to supply IP/MPLS Routers for this national project.

• Private Telcos: The company is receiving expansion orders for its DWDM and GPON equipment from leading private telecom operators in India.

• International Wins: Secured an order for a DWDM backbone network in Africa and a network transformation deal in Southeast Asia.

• Data Centers: The company achieved its first win in a sovereign data center networking application in India, tapping into a high-growth segment.

The company has a diverse pipeline of opportunities across its wireless and wireline segments, spanning government projects, private enterprises, and international markets.

• Inventory Management:

• The company holds a significant inventory of INR 2,363 Cr.

• This inventory is slated to be converted into finished goods and shipped in the upcoming months, indicating that production capacity is being utilized to prepare for future deliveries against its order book.

• Capital Expenditure (Capex):

• While a specific capex number for the quarter was not provided, it was noted as a partial offset to the working capital-driven reduction in net debt. This implies ongoing investment in the business's operational capabilities.

The company is managing a large inventory level in preparation for future shipments and continues to invest in capex to support its operations.

• Order Execution: A primary focus is on converting the large inventory balance into finished goods to fulfill the existing order book of INR 1,329 Cr.

• Commercialization of Wireless Products: The company plans to conclude ongoing commercial negotiations for its wireless products in both Indian and international markets.

• International Expansion: Continue to leverage partnerships with NEC and Rakuten to deepen penetration in Europe, LATAM, and Africa.

• Securing Delayed Orders: A key near-term objective is to secure the receipt of the delayed INR 1,526 Cr add-on purchase order from BSNL for its 4G network.

Future plans are centered on executing the existing order book, securing new large-scale orders, and expanding the international business footprint for both wireless and wireline products.

• Operating and Net Margins:

• The company is currently operating at a loss. The EBIT (Earnings Before Interest and Taxes) for Q3 FY26 was INR -239 Cr.

• The PBT (Profit Before Tax) was INR -303 Cr, and the PAT (Profit After Tax) was INR -197 Cr for the quarter.

• While still negative, these figures represent an improvement from Q2 FY26, where the company posted an EBIT of INR -394 Cr and a PAT of INR -307 Cr.

• Margins were negatively impacted by specific provisions totaling INR 34.2 Cr for employee benefits and warranty expenses during the quarter.

The company's margins remain negative, reflecting its current phase of investment and operational challenges, though there is a sequential improvement in profitability.

• Forward-Looking Risks:

• The company's future growth is subject to its ability to successfully implement its strategy, manage technological changes, and navigate market risks and general economic and political conditions in India.

• Customer and Project Dependency:

• A significant operational risk is highlighted by the "Delay in receipt of BSNL 4G add-on PO of 1,526 Cr". This points to a high dependency on large, single-customer projects, which can introduce volatility into revenue and order flow.

• The order book is heavily skewed towards India (92%), indicating a concentration risk tied to the domestic market.

• Financial Risks:

• The balance sheet carries high levels of trade receivables (INR 3,284 Cr) and inventory (INR 2,363 Cr), indicating significant working capital requirements that could strain liquidity.

• The company has a substantial net debt position of INR 3,349 Cr, which poses a financial risk, particularly in a loss-making period.

Key risks include dependence on large government contracts, geographic concentration in India, and financial pressures from high working capital and significant debt.

• Government Incentives:

• The company received INR 84.95 crore from the Production-Linked Incentive (PLI) scheme for its performance in Q4-FY25.

• Cumulatively, Tejas has received INR 397 crore in PLI incentives for the fiscal year FY25.

The company is a beneficiary of government manufacturing incentives, which provides a supplementary source of cash flow.