Tejas Networks Q2FY22 Conference Call Highlights

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  • In FY-22, India private will be the fastest growing business segment for the company.
  • In International market, Africa is doing very well for the company.
  • Semiconductor shortage impact likely to continue in the second half of the next year as well. Margin impact was 240 to 250 basis point in Q2 due to the shortage.
  • Won plenty of tenders from BSNL, Railways, fire, Utilities, etc but converting them into revenues will take time.
  • Seasonality: H2 (second half of the financial year) is better as compared to H1. 
  • Optical and broadband access: Globally competitive to reach out to much larger customer base.
  • R&D: Planning to invest in wireline, wireless side, 4G, 5G space. In the 4G and 5G space looking at both organic and inorganic investment opportunities.
  • Order book profile: India + International consists of 45% of the order book whereas Indian Government related orders is 55%.
  • Indian government orders are in the 3 categories: 1.) Critical Infrastructure like Railways, Power, Oil and Gas, Defense, Smart cities. 2.) BSNL/BBNL (Bharat Broadband Network Limited): Department of telecom related.
  • 3.) BSNL, at the company level.
  • Working capital cycle will get normalized to 130-140 days in the next few quarters.
  • BSNL credit is around 100 crores. Partly has been repaid and remaining will be paid in the coming quarters.
  • More color on the synergies with the tata group will be given in the next few weeks post the open offer decision given by the TATA Sons.
  • Large part of manufacturing is outsourced by the company. They mostly do assembly. Company has got the approval w.r.t the PLI (Production linked incentive) scheme for telecom equipment manufacturing.

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