Tejas Networks Limited — Q3 FY26 earnings call

Call held 9 Jan 2026

Management summary

Tejas Networks reported a 17% QoQ revenue growth to ₹307 crores in Q3 FY26, driven by wireline products and international customers. Despite an increase in order book to ₹1,329 crores and new strategic wins, the company posted significant losses of ₹197 crores, primarily due to delayed BSNL orders and ongoing investments. Management emphasized a positive long-term outlook, focusing on international expansion and new product monetization, while acknowledging current profitability challenges and high inventory levels.

Highlights

  • Revenue of ₹307 crores, up 17% QoQ from ₹262 crores in Q2 FY26.

  • Order book at ₹1,329 crores, showing a 10.38% QoQ growth from ₹1,204 crores.

  • Net debt reduced to ₹3,349 crores from ₹3,738 crores in Q2 FY26.

  • Secured multiple new wins including 5G RAN supplier for Delhi-Mumbai railway corridor pilot, private 5G deployments, and a first-time sovereign data center networking application.

  • Filed 26 patents in Q3, contributing to a cumulative 613 global patents filed (370 granted).

Concerns

  • Reported a negative Profit After Tax of ₹197 crores for the quarter.

  • EBIT remained negative at ₹239 crores, despite an improvement from negative ₹394 crores in Q2 FY26.

  • BSNL 4G add-on purchase order for 18,000 sites is delayed, impacting inventory utilization and revenue recognition.

  • High inventory level of ₹2,363 crores, largely held for the delayed BSNL order.

Key financials

  1. Revenue ₹307 Cr +17%QoQ
  2. Profit After Tax ₹-197 Cr
  3. Order Book ₹1,329 Cr +10.4%QoQ
  4. EBIT ₹-239 Cr +39.4%QoQ
  5. Inventory ₹2,363 Cr
  6. Trade Receivables ₹3,284 Cr -18.4%QoQ

What they filed

Q1 FY27: revenue up 99.0%, net profit down 4.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue2,811 2,642 1,907 202 262 −91%307 −88%333 −83%402 +99%
EBITDA535 372 122 -136 -294 −155%-134 −136%-118 −197%-100 +26%
Net profit275 166 -72 -194 -307 −212%-197 −219%-211 −193%-202 −4%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence

Total value

₹1,329 Cr

as of 2025-12-31 quantified

10.4% QoQ

Execution

BharatNet Phase 3 implementation over next two years. BSNL 4G add-on order execution in next financial year.

Composition

  • Indian customers (geography) 92%

Pipeline

deal pipeline tcv

BSNL 4G add-on order for 18,000 sites; BharatNet Phase 3 packages; wireless product trials moving to commercial negotiation.

Cancellations & deferrals

  • delayed: BSNL 4G add-on order for 18,000 sites delayed.
Order book is predominantly from India, with significant inventory held for a delayed BSNL order which is expected to come and execute in the next financial year.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed
    This has come down mainly due to lower working capital which gets partly offset by the capex during the quarter.
  • Debt Gross ₹3,885 Cr · Net ₹3,349 Cr
    Our net debt at the end of the quarter was INR3,349 crores versus INR3,738 crores in quarter two. And the gross debt is put at INR3,885 crores.

Guidance & targets

Business Growth

  • Wireless product commercial negotiations closure Business Growth · coming months · Medium confidence Expected to close
    Many of them started in Q2 and many of them have progressed to the commercial negotiation stage and are expected to close in the coming months.

    — Arnob Roy

Project Execution

  • BSNL 4G add-on PO execution Project Execution · next financial year · Medium confidence Will be executed
    So, this project, whenever that comes, is going to be executed in the next financial year.

    — Arnob Roy

  • BharatNet Phase 3 implementation period Project Execution · next two years · High confidence Over next two years
    So, this particular order is for BharatNet Phase 3 and for all the routing products. I would say implementation period is over next two years.

    — Sanjay Malik

Leadership

  • CEO appointment Leadership · at some point of time soon · Medium confidence Will be appointed
    I think the board is working actively on appointing a CEO going forward. And I think at some point of time soon, there will be a CEO appointment for the company.

    — Arnob Roy

What to watch in Q4 FY26

Wireless product commercial deal closures

next quarter
Current Trials ongoing, commercial negotiation stage
Target Announcement of commercial wins/orders

Why it matters

Key to international expansion and realizing returns on R&D investments, directly impacting future revenue growth.

Many of them started in Q2 and many of them have progressed to the commercial negotiation stage and are expected to close in the coming months.

Risks & concerns

  • Sustained losses and lack of cumulative profitability

    high

    Company has reported significant losses for the last two quarters and has not been cumulatively profitable over the last five years, raising concerns about the path to profitability.

    Analyst acknowledged

  • High inventory levels due to project delays

    high

    Inventory of ₹2,363 crores is almost twice the current order book, primarily held for the delayed BSNL 4G add-on order, leading to a long working capital cycle.

    Analyst acknowledged

  • Heavy dependence on a single government anchor customer (BSNL)

    medium

    The company's business has been significantly impacted by delays from BSNL, highlighting a concentration risk, though management is diversifying internationally.

    Analyst acknowledged

  • Need for fundraise given current burn rate

    medium

    Analyst questioned the need for a fundraise given the current EBITDA losses of approximately ₹150 crores and the gap to EBIT break-even.

    Analyst not addressed

Q&A highlights

4 direct, 1 evasive
Path to profitability given sustained losses Partial
As you can see from our financials over the year, we've made significant investments in growing our business, right from investments in our products in R&D and expanding our portfolio with a large set of wireless products. So all of that investment as well as our investments in supply chain and sales have been with the intent and with the expectation and anticipation of growth of our business internationally.

Analyst challenged management on the lack of profitability over several quarters, seeking a clear timeline or strategy for achieving it.

Asked by Rajakumar V.

High inventory levels and long working capital cycle Partial
So as we have spoken earlier, a lot of this inventory has actually been procured for executing on the BSNL 4G add-on order for which our partner, TCS has received an APO and they've also communicated the LOI to us for that project. And so a lot of this procurement really happened for that. That's why we are sitting on this large inventory.

Analyst questioned the rationale behind holding significant inventory relative to orders and the impact on working capital, which management attributed to the delayed BSNL order.

Asked by Rajakumar V.

Reaching FY24 revenue levels and patent strategy Direct
So, FY '24 levels this year, as you can see, our expectation was the execution of the add-on project from BSNL and while that happens we build on our international business for wireless. Since that order got delayed, and we have built the inventory for it, that's the reason why we would see that we have not been able to reach the level of FY '24 yet. ... So, while we file patents in both wireline and wireless areas, the majority of patents are related to 5G advanced and 6G technologies.

Analyst sought clarity on revenue recovery targets and the focus of the company's intellectual property development.

Asked by Pranav Kshatriya

Timeline for CEO appointment Evasive
I think the board is working actively on appointing a CEO going forward. And I think at some point of time soon, there will be a CEO appointment for the company. ... Yes, it's not in my place to answer that question right now.

Analyst pressed for a timeline on filling the CEO vacancy, which management acknowledged but did not specify a date.

Asked by Karan Raja

Reason for BSNL 4G project delay Direct
Yes, it is mainly to do with the operational readiness of BSNL for rolling out the network. They also had to be prepared with their sites, with site readiness and related aspects. So, that's what is basically holding up the rollout of this project.

Analyst sought clarification on the specific cause of the BSNL 4G project delay, which is a major factor impacting the company's financials.

Asked by Karan Raja

Market opportunity and targets for private 5G and data center applications Partial
So, our right to win is the products that we have. As you know, our current BSNL product is a 4G upgradable to 5G. So, both our review as well as radios are software and hardware are upgradable to 5G services. ... So, from that point of view, it gives us mileage, credibility, and visibility in this space. So, that's probably the largest benefit. And as I said, as of now, we don't have any target which says that we have to achieve these kind of numbers for using this particular application or the other one.

Analyst probed for quantitative targets and market share expectations for new growth areas, but management indicated it's too early for specific numbers.

Asked by Karan Raja

Necessity of fundraise and cost-cutting measures Direct
I think the evaluation of capital structure is a sort of an ongoing exercise. And right now there is no proposal of fundraise that we've discussed or that is in discussion at the Board level. ... Now, I won't say cost cutting, but a lot of cost optimization, cost rationalization efforts have happened through the year.

Analyst raised concerns about the company's burn rate and the need for a fundraise, which management denied was currently being discussed, while confirming cost optimization efforts.

Asked by Dhruv Shah

Gross margins for international wireless POCs versus BSNL business Direct
So, yes, in the international markets, wherever we are engaging and wherever we are in commercial discussions, the prices are at a much different level and the margins are also at a different level.

Analyst sought clarification on potential margin improvement from new international business compared to the highly competitive Indian market.

Asked by HT Desai

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Detailed narrative

Q3 FY26 Financial Performance Overview

Tejas Networks reported a revenue of INR 307 crores for Q3 FY26, marking a 17% sequential growth from INR 262 crores in the previous quarter. The revenue was primarily driven by sales of wireline products to Indian private operators and international customers. Despite the growth, the company recorded a negative Profit After Tax of INR 197 crores and a negative EBIT of INR 239 crores, although EBIT showed an improvement from negative INR 394 crores in Q2 FY26. Expenses for the quarter included provisions for past service costs related to gratuity and compensated absences, and INR 24 crores for warranty expenses.

Order Book and BSNL 4G Project Delays

The company's order book stood at INR 1,329 crores at the end of Q3 FY26, an increase from INR 1,204 crores in the prior quarter, with 92% originating from Indian customers. A significant portion of the inventory, valued at INR 2,363 crores, has been procured for the BSNL 4G add-on order for 18,000 sites. However, this order has been delayed due to BSNL's operational readiness, impacting inventory utilization. Management expects the order to be received at an appropriate time and its execution to commence in the next financial year, which should lead to rapid inventory depletion.

Strategic Wins and International Expansion

Tejas Networks achieved several key wins, including being selected as a 5G RAN supplier for a pilot on the Delhi-Mumbai railway corridor and securing multiple private 5G deployments in India for applications in ports and mines. The company also won additional BharatNet packages, becoming a major supplier of IP/MPLS routers. International wins included a WDM backbone network for a broadband ISP in Africa and an MPLS-TP project for a power sector company in Southeast Asia. Notably, Tejas secured its first win in a sovereign data center networking application in India for its switching products.

Product Development and Innovation

The company continues its focus on innovation, filing 26 new patents in Q3, bringing the cumulative global patents filed to 613, with 370 already granted. The majority of these new patents are related to 5G advanced and 6G technologies, aligning with upcoming standards. Tejas also received INR 85 crores in PLI incentives for Q4 FY25, contributing to a cumulative INR 397 crores for FY25, reflecting its commitment to domestic manufacturing and R&D.

Capital Structure and Profitability Outlook

Net debt decreased to INR 3,349 crores in Q3 FY26 from INR 3,738 crores in Q2 FY26, while gross debt was INR 3,885 crores. Management acknowledged the current losses and high working capital, stating that efforts are underway to improve working capital management. The path to profitability is expected to materialize as the business scales up, particularly with increased international business, which typically offers better margins and working capital cycles. No fundraise is currently being discussed at the board level.

Leadership and Long-Term Vision

The board is actively working on appointing a new CEO following the resignation of Mr. Anand Athreya, with an appointment expected 'at some point of time soon.' Management expressed a positive long-term outlook, driven by rapid technology transitions, increasing demand for data (especially from AI applications), and leveraging new products for international markets. The BSNL project is viewed as an excellent platform that helped mature products and scale operations, rather than being the sole lifeline for the company.

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