Tejas Networks stock snaps 4-day losing streak, jumps over 4%. Here’s why

Shares of Tejas Networks, a Tata Group-backed company, surged 4.5% in early morning trade on Monday, March 17, to reach a three-month high of ₹689 apiece. Today's rise also ended the stock's four-day slide, which followed the company's announcement last week that it had received ₹123.45 crore from the Ministry of Communications, Department of Telecommunications (New Delhi) as an incentive for the financial year 2023-24 under the PLI (Production Linked Incentive) Scheme for Telecom and Networking Products.

Tejas Networks is a part of the Tata Group, with Panatone Finvest (a subsidiary of Tata Sons) as the majority shareholder. It designs and manufactures high-performance wireline and wireless networking products for telecommunications service providers, internet service providers, utilities, defense, and government entities across more than 75 countries.

Over the last few months, the company’s shares have remained under pressure amid a sharp correction in the broader market, causing the once high-flying Tejas Networks to lose significant market value.

In the past five months, the stock has shed 50% of its value and is down 54% from its recent peak of ₹1,495. However, in the long term, it is still trading with a 1,514% gain over the last five years.

Recent developments

During the December quarter, the company secured a three-year contract with Vodafone Idea to supply equipment for its pan-India 4G and 5G mobile backhaul network. Additionally, it was chosen as the broadband equipment supplier for Tamil Nadu's state-led BharatNet Last Mile Connectivity (LMC) project.

The company also successfully completed a proof of concept (PoC) and received initial purchase orders for a network modernization project in the United States. Furthermore, it received orders from an operator in Asia for the expansion of their mobile backhaul network, according to the company's Q3FY25 earnings' report. 

Looking ahead, the company is focusing on several key opportunities across both wireless and wireline segments. In the wireless sector, the company is poised to benefit from the expansion of BSNL’s 4G network and the subsequent upgrade to 5G.

Additionally, it is targeting projects such as the Indian Railways' Kavach system, a collision avoidance technology, and private 5G applications for large enterprises in India.

In the wireline segment, the company aims to capitalise on Bharatnet Phase 3 initiatives and the expansion of DWDM backbone networks in the utilities sector. Furthermore, the company is pursuing FTTH (Fiber to the Home) and network modernization contracts with various operators in the EMEA (Europe, the Middle East, and Africa) region and the Americas.

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