Emkay anticipates that Tejas Networks, driven by the BSNL and BharatNet projects, will execute orders valued at least ₹29,200 crore over FY24–28 and produce revenue and EBITDA exceeding ₹30,000 crore and ₹6,000 crore, respectively.
Emkay Global, a domestic brokerage, has started covering Tejas Networks with a ‘Buy’ rating and a target price of ₹1,050 a share. This indicates a possible upside of 22% over the company’s Tuesday closing price of ₹857, which is considered odd.
For this Tata Group company, Emkay has forecast a significant revenue increase that would peak in the fiscal year 2025. In addition, the brokerage anticipates Tejas Network’s revenue to stabilize at five times the level of the 2024 fiscal year.
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In a research report, Emkay stated, “We see revenue peaking in FY25 and settling at 5 times of FY24 levels.” With the help of the BSNL and Bharat Net projects, the brokerage anticipates that Tejas will execute orders worth at least ₹29,200 crore over FY24–28 and produce revenue and EBITDA above ₹30,000 crore and ₹6,000 crore, respectively.
Tejas ordered a book
As of Q2 FY24 end, Tejas had an order book of ₹9,270 crore, which included ₹700 crore for BSNL’s MAAN project; ₹7,490 crore for a purchase order (PO) from TCS for BSNL’s 4G deployment; and ₹230 crore backlog from overseas projects.
Emkay also projects that Tejas will win a number of other POs over the next two years, such as an ITI PO for 23,633 BSNL 4G sites (₹2,300 crore), an upgrade from 4G to 5G from BSNL (₹750 crore), BSNL’s pan-India 5G project (estimated at ₹9,000 crore), BharatNet-3 (estimated at ₹7,000 crore), and an upgrade from Kavach to LTE-R on the Railways (estimated at ₹15 crore).
“Over the course of FY24–28E, Tejas is expected to execute orders valued at least ₹29,200 crore. Revenue for FY24–28E might be higher since, according to the PO estimate, “(i) project AMCs and (ii) run-rate revenue from private and international projects in India are excluded.”
Several growth levers to help with scaling up
Emkay noted that Tejas may benefit from the government’s emphasis on domestic manufacturing and the PLI scheme; large investments in BSNL, BharatNet, and the Railways; increasing demand in critical infrastructure and the India private sector; and a global push to replace Chinese telecom equipment.
Tejas can also gain from cost-competitive R&D versus peers, Saankhya Labs’ acquisition for wireless solutions, new connections likely to be supplied by CEO Anand Athrey’s 35-year US work experience, and new reference opportunities from Tata Group companies (TCS, TCom), according to the brokerage.
According to the firm, Tata Group’s semiconductor venture might provide an additional boost. Tejas Networks Ltd. shares climbed 3.5% to a day high of $887.95 on the NSE on Wednesday. The Tata Group stock has gained 43% so far this year and 50% in the last year.
Frequently asked questions
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Natarajan Chandrasekaran is the Chairman of the Board of Tata Sons, the holding company and promoter of over 100 Tata operating companies with annual revenues in excess of US $100 billion.
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At the age of 33, Avani Davda created history by becoming the youngest CEO of a Tata Group entity. She is a Mumbai native who attended the elite H.R. College of Commerce and Economics.
Who is the youngest CEO of Tata?
Avani Davda, fresh out of college, took her first steps into the corporate world in 2002, when she applied to the prestigious Tata Administrative Services (TAS). She had no idea that this was just the beginning of a spectacular career that would eventually lead her to become the Tata Group’s youngest CEO.
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