Tejas Networks shares fell over 12 percent after the company reported a Rs 196 crore loss in Q3. | Photo credit: IANS
Mumbai: Shares of Tejas Networks fell sharply by more than 12 percent on Monday, January 12, after the company announced weak results for the December quarter. The stock touched a low of Rs 364.25 on the NSE as investors reacted negatively to the numbers released after market hours on Friday.
Tejas Networks is part of the Tata Group and makes telecom and data networking equipment.
Company Reports Second Straight Quarterly Loss
For the October–December quarter, Tejas Networks reported a consolidated loss of Rs 196.55 crore. This is the second consecutive quarter in which the company has posted a loss. In the same quarter last year, the company had reported a profit of Rs 165.67 crore.
The main reason for the loss was a sharp fall in sales, especially due to delays in orders from state-owned telecom company BSNL.
Revenue Drops Nearly 88 percent in Q3
The company’s revenue from operations fell steeply by around 88 percent to Rs 306.79 crore in the December quarter. In comparison, revenue in the same quarter last year stood at about Rs 2,642 crore.
A major reason behind this fall was the delay of a large purchase order from BSNL worth Rs 1,526 crore. This order was meant for setting up 18,000 telecom sites and is part of BSNL’s 4G network rollout.
Heavy Dependence on Domestic Market
Tejas Networks gets most of its business from India. During the quarter, around 85 percent of its revenue came from the domestic market, while only 15 percent came from international markets.
The company said it currently holds inventory worth Rs 2,363 crore, which will be converted into finished products and shipped in the coming months.
Losses Continue for Nine Months
For the nine-month period ending December 31, Tejas Networks reported a total loss of Rs 697.55 crore. Revenue for this period also dropped sharply by 89 percent to Rs 793.69 crore.
However, the company reported cash reserves of Rs 537 crore during the quarter, which provides some financial comfort.
Some Positive Developments Ahead
Despite weak results, the company said it has won new orders for private 5G networks in sectors like ports and mines. It has also been selected for a 5G pilot project for Indian Railways on the Delhi–Mumbai route.
Tejas Networks also received Rs 84.95 crore under the government’s PLI scheme during the quarter, taking total incentives received to Rs 397 crore.
