Tejas Networks shares experienced a sharp decline, falling 7.81% to hit a fresh 52-week low of ₹384.15 following the release of disappointing third-quarter results. The Tata Group telecom equipment manufacturer's stock performance reflected sustained investor concerns over the company's financial deterioration. At 9:30 AM trading, the stock was down 6.65% at ₹389.00 per share on the BSE, with continued selling pressure throughout the morning session. The stock's decline to a 52-week low underscores the challenges facing the domestic telecom gear manufacturing sector and highlights the significant impact of delayed government orders on company performance.
Tejas Networks, a Tata Group telecom equipment manufacturer, reported a ₹196.55 crore consolidated loss for the October-December quarter, marking the second consecutive quarterly loss. This represents a significant deterioration from the ₹165.67 crore profit recorded in the same quarter last year. The company's revenue from operations plunged by 88% to ₹306.79 crore during Q3 FY26, compared to approximately ₹2,642 crore in the previous December quarter. Despite the dramatic year-on-year decline, the company showed sequential improvement with the Q3 loss narrower than the previous quarter's ₹307 crore loss, indicating some stabilization in operational performance.
The primary factor behind the poor performance was the deferment of purchase orders from state-owned BSNL. A purchase order worth ₹1,526 crore from BSNL for 18,000 sites was delayed during the quarter under review, significantly impacting revenue recognition. Tejas Networks serves as a key vendor for BSNL's 4G network as part of the CDOT-TCS consortium and claims to be the biggest supplier of network routers to the state-owned telecom operator. The substantial revenue contraction primarily stemmed from lower sales volumes directly linked to these delayed government orders.
During the reported quarter, 85% of Tejas Networks' revenue mix came from the domestic market while 15% was from international markets, excluding operating revenue. The company has maintained an inventory of ₹2,363 crore in the December quarter, which management expects to convert to finished goods and ship in upcoming months. The company also reported cash reserves of ₹537 crore for the December quarter, providing financial flexibility despite operational challenges. Additionally, Tejas Networks received ₹84.95 crore as production-linked incentive (PLI) during the reporting period, bringing total PLI incentives received to ₹397 crore.
Despite current challenges, the company has secured multiple wins for private 5G deployments in India for applications in ports and mines. Additionally, Tejas Networks has been selected as the 5G radio network supplier for a section of the Delhi-Mumbai railway corridor as part of Indian Railways' Kavach pilot project. The company's substantial inventory position of ₹2,363 crore represents both an asset and a working capital consideration as management works to convert these holdings into revenue in subsequent quarters. Historical stock performance shows the stock down 11.83% in one day, 18.85% over five days, and 66.68% over one year, reflecting sustained pressure on the telecom equipment sector.
