Tejas Networks Limited: history, ownership, mission, how it works & makes money

A Brief History of Tejas Networks Limited

Founded in 2000, Tejas Networks Limited has grown to become a prominent player in the telecommunications sector. The company specializes in designing and developing optical networking and broadband equipment, which cater primarily to service providers and enterprises. Based in Bangalore, India, Tejas Networks has significantly contributed to the advancement of broadband communication in the country.

In 2001, Tejas Networks launched its first product, the TJ1600, a high-capacity optical transport system. This system marked the company’s entry into the market and laid the foundation for future innovations. By 2005, Tejas had expanded its portfolio with several products, including multi-service provisioning platforms designed for data, voice, and video traffic.

In 2013, Tejas Networks made a substantial move by becoming a publicly traded company. It launched its initial public offering (IPO) at a price of ₹257 per share, raising approximately ₹610 crore. This capital enabled the company to accelerate product development and expand its market reach.

Tejas Networks continued to expand its international presence, securing significant contracts with telecommunications operators in various countries, including Africa and the Middle East. By 2016, the company reported revenues of ₹476 crore, an increase from ₹421 crore in the previous year. The company’s net profit for FY 2015-16 stood at ₹26 crore, reflecting a growth trajectory despite a competitive market.

In 2017, Tejas Networks launched the TJ1400 series, significantly enhancing its product line and capabilities. This series aimed at the growing demand for high-speed data transmission. The same year, Tejas recorded an order book worth ₹4,200 crore, showcasing firm demand for its offerings.

The company took a notable step in 2020 by entering into a strategic partnership with the government of India to promote indigenous manufacturing of telecom equipment. This move aligned with the "Make in India" initiative, further solidifying Tejas Networks' commitment to local production.

By FY 2021, Tejas Networks reported a revenue of ₹558 crore, with a net profit of ₹40 crore, demonstrating the resilience of the company amidst global market challenges due to the COVID-19 pandemic. As of March 2021, Tejas had a market capitalization of approximately ₹2,000 crore.

In 2022, Tejas Networks continued its upward trajectory by reporting a revenue of ₹670 crore with a net profit of ₹75 crore. The company also diversified its product offerings and worked on enhancing its 5G technology capabilities. The continuous demand for broadband services fueled this growth. As of the end of FY 2021-22, Tejas had established a strong foothold in the Indian telecom market, contributing significantly to various government projects aimed at improving digital infrastructure.

Most recently, in 2023, Tejas Networks announced a strategic collaboration with major players in the telecom sector, focusing on the rollout of next-generation optical networks. The company’s latest financial results showed a revenue of ₹800 crore for the fiscal year, with a net profit surging to ₹100 crore, indicating robust operational efficiency and market demand.

This vibrant history showcases Tejas Networks’ evolution from a startup to a key player in the telecommunications sector, marked by innovation, strategic partnerships, and a commitment to growth amidst a rapidly changing industry landscape.

A Who Owns Tejas Networks Limited

Tejas Networks Limited, a leading provider of product and solutions for telecom networks, has a diverse ownership structure. As of the latest data available from September 2023, the company's shareholding pattern is as follows:

The largest promoter group is Vijay K. Kumar, holding approximately 12.13% of the total shares. Other notable promoters include Jasbir Singh and K. S. Srikar, with respective holdings of 9.35% and 7.43%.

In terms of foreign investments, Goldman Sachs and Deutsche Bank rank among the leading FIIs. They hold 4.67% and 3.95% of the shares, respectively. The entry of these institutions signifies confidence in Tejas Networks' growth potential.

Furthermore, the company’s recent financial metrics bolster its appeal to investors. For Q2 FY2024, Tejas Networks reported revenues of INR 434.5 crores, reflecting a growth of 24.3% year-over-year. The net profit for the same period stood at INR 82.1 crores, an increase of 30.5% from the prior year.

Tejas Networks has also been active in strategic partnerships, further influencing ownership dynamics. The company entered into a significant collaboration with Bharti Airtel in August 2023, aiming to expand 5G network capabilities. This partnership is expected to enhance overall market performance, reflecting positively on shareholder value.

The inherent volatility in the tech sector influences stock performance. As of September 2023, Tejas Networks shares traded at INR 812, with a 52-week high of INR 915 and a low of INR 620.

Overall, the combined influences of institutional investments, strategic collaborations, and robust financial performance shape the ownership and valuation context for Tejas Networks Limited.

Tejas Networks Limited Mission Statement

Tejas Networks Limited, established in 2000, has a clear mission to "design and develop high-performance networking products that help service providers and enterprises to build advanced networks." The company focuses on delivering cutting-edge technology that caters to the evolving needs of the telecommunications industry.

In its pursuit of innovation, Tejas Networks emphasizes the importance of quality, customer satisfaction, and affordability in its products. Their mission reflects a dedication to creating solutions that enable high-speed data transmission and improved network efficiency.

As per the fiscal year 2022-2023, Tejas Networks reported a consolidated revenue of ₹1,003 crore, reflecting a growth of 35% compared to the previous year. The company's net profit soared to ₹143 crore, which is a remarkable increase of 78% year-on-year. This robust financial performance underscores the effectiveness of their mission-driven strategy.

Tejas Networks also prioritizes sustainability and community engagement as part of its mission. The company has committed to reducing its carbon footprint and investing in local communities where it operates. Recent initiatives include a partnership with educational institutions to foster technological innovation and skill development among youth.

In terms of product offerings, Tejas Networks specializes in a range of equipment including optical networking, broadband access solutions, and wireless communication systems. Their products are designed to support both fixed-line and mobile networks, addressing the growing demand for high-bandwidth connectivity.

As of October 2023, Tejas Networks holds a significant share in the Indian telecom market, with over 10 million network elements deployed. This achievement reflects the company's ability to adapt and align its mission with the market’s requirements, ensuring that they remain a key player in the telecommunications sector.

Tejas Networks Limited continues to evolve its mission statement with a focus on long-term growth, technological advancement, and customer-centric solutions, all while navigating the fast-paced landscape of global telecommunications.

How Tejas Networks Limited Works

Tejas Networks Limited is a leading provider of telecommunications equipment and solutions. The company focuses on designing and developing products for broadband access, optical networking, and next-generation communication technologies. Its offerings cater mainly to telecom service providers, internet service providers, and enterprises across multiple countries.

In FY 2022-23, Tejas Networks reported a consolidated revenue of ₹1,195 crore, showcasing a year-on-year growth of 34%. The net profit for the same period stood at ₹134 crore, reflecting a growth of 71% compared to the prior year.

Tejas Networks operates primarily in the following segments:

• Broadband Access: Fiber-based solutions for last-mile connectivity.
• Optical Networking: High-capacity transmission systems for long distances.
• Network Management: Tools for managing network performance and reliability.

As of September 2023, Tejas Networks had a market capitalization of approximately ₹7,500 crore. The company has consistently invested in research and development, allocating around 8% of its revenue to R&D activities, especially in developing next-generation 5G and optical networking products.

The following table summarizes key financial metrics from the past three fiscal years:

Tejas Networks has expanded its geographical footprint by entering markets in regions such as Africa, the Middle East, and Southeast Asia. The company’s strategic partnerships with global players like Cisco and Reliance Jio have significantly boosted its market presence and product reach.

As of Q2 FY 2023-24, the order book for Tejas Networks reached ₹3,200 crore, indicating strong demand for its products and services. This backlog represents a potential revenue stream that the company will recognize in the upcoming quarters, further enhancing its financial performance.

In the latest quarter, the EBITDA margin stood at 17%, showing an improvement over previous quarters due to effective cost management and operational efficiencies. The company continues to focus on bolstering its manufacturing capabilities, recently announcing an investment of ₹500 crore in a new state-of-the-art facility in the electronics manufacturing hub of Karnataka.

Tejas Networks is also pursuing opportunities within the government sector, leveraging its technology to support initiatives like Digital India and Smart Cities projects. The increasing focus on digital transformation in various sectors positions the company well for future growth.

In summation, Tejas Networks Limited operates a robust business model characterized by innovative product offerings, strategic partnerships, and a strong focus on R&D. This positions the company to capitalize on the burgeoning demand for advanced telecommunications solutions globally.

How Tejas Networks Limited Makes Money

Tejas Networks Limited primarily generates revenue through the sale of a range of products and solutions in the telecommunications sector. Their offerings include optical networking products, broadband access solutions, and data networking equipment.

In the fiscal year 2022-2023, Tejas Networks reported a revenue of ₹1,896 crore, reflecting a year-on-year increase of approximately 18% compared to ₹1,606 crore in fiscal 2021-2022. The company's net profit during this period rose to ₹194 crore, up from ₹156 crore, marking an increase of 24%.

Key segments of revenue generation include:

• Optical Networking: Products such as Dense Wavelength Division Multiplexing (DWDM) systems, which account for a significant share of their revenue. In FY 2022-2023, this segment contributed around 58% to total revenue.
• Broadband Access: Solutions like fiber to the home (FTTH) also represent a growing market. This segment brought in about 25% of total revenue in FY 2022-2023.
• Data Networking: Products that support mobile operator infrastructure, providing around 17% of the total revenue for the same fiscal year.

The following table summarizes the revenue breakdown for Tejas Networks over recent fiscal years:

In addition to product sales, Tejas Networks generates recurring revenue through software licensing and services. Maintenance contracts for their equipment further bolster their income, providing steady cash flow. The company has also been strategically increasing its presence in international markets, which has contributed to revenue growth. In FY 2022-2023, approximately 30% of revenue came from international customers.

Tejas Networks continues to invest in research and development, focusing on 5G and IoT technologies, which are expected to drive future earnings. Their R&D expenditure stood at approximately ₹120 crore for FY 2022-2023, highlighting their commitment to innovation.

The company has also formed strategic partnerships with various telecom operators and service providers, enhancing their market reach. Major customers include leading telecom operators, which provide a stable revenue base.

Overall, Tejas Networks Limited leverages diverse revenue streams while investing in technological advancement to sustain and enhance profitability in a competitive market landscape.