Tejas stays loss-making at ₹202 Cr, but consolidated revenue nearly doubles YoY to ₹402 Cr
PAT -4.32% YoY · revenue +99.11% · margins expanding
₹402.16 Cr
+99.11% YoY
₹-202.24 Cr
-4.32% YoY
-49.19%
+42.5pp YoY
₹-11.37
Tejas Networks reported a Q1FY27 consolidated net loss of ₹202.24 Cr — its fifth straight loss-making quarter — even as revenue from operations nearly doubled year-on-year to ₹402.16 Cr (+99.1% from ₹201.98 Cr) and rose 20.9% sequentially from ₹332.69 Cr. The loss was marginally narrower than the ₹211.34 Cr posted last quarter but slightly wider than the ₹193.87 Cr year-ago loss, so the headline remains red despite a clear topline recovery. Net loss margin, however, compressed sharply to -50.3% from -91.7% a year ago and -61.6% last quarter, showing the operating leverage as volumes return. Standalone numbers mirror the group (revenue ₹401.95 Cr, net loss ₹202.24 Cr, EPS -₹11.37), the ₹0.86 Cr of subsidiary revenue being immaterial.
Q1 FY-2027 vs prior quarters
The recovery is a volume story — the sharp fall in cost of materials consumed to ₹132.09 Cr (from ₹297.07 Cr last quarter) tracks the shift back to normal order execution after the BSNL-driven collapse of the prior year. But the print is still deeply unprofitable at the operating line: pre-tax loss was ₹270.81 Cr, weighed down by fixed costs that dwarf current revenue — finance costs of ₹85.07 Cr and depreciation of ₹94.35 Cr together consume ~45% of quarterly revenue. A ₹68.57 Cr deferred-tax benefit (no current tax) trimmed the after-tax loss. There are no exceptional or one-off items on either comparison side, so the YoY move is fully underlying: revenue roughly doubled while the absolute loss barely changed.
The stock went into the print at ₹513.05, down 17.6% over the past month of trading.
What the summary numbers don't show
Unaudited results (limited review, clean) — board approved July 27, 2026; telecom/data networking is the sole reportable segment.
Management provided no quantitative guidance for FY27, citing company policy, but expressed a very positive qualitative outlook, framing the past year as one of transition and investment. They expect 'much better financial results' driven by a strong order book, new product traction in wireless and optical, and strateg
Against management's own framing, this is a partial validation. On the Q4FY26 call the board gave no quantitative guidance (citing company policy) but promised 'much better financial results' and a rapid return to profitability driven by BSNL receivable collection, a strong order book and new wireless/optical traction. The revenue rebound to near ₹400 Cr delivers the 'much better topline' half of that; the profitability half is not yet visible — the company remains loss-making at every level. No sell-side consensus for this specific quarter surfaced (coverage is thin and estimates volatile), and no management press release was extracted with this filing, so vsStreet is unknown. The only concurrent corporate development of note this quarter was a telecom-training partnership with MahaIT (May 21), which is not financially material.
W1
Return to profitability: PBT still -₹270.81 Cr despite revenue doubling; watch whether the ~₹400 Cr run-rate plus BSNL receivable collection can turn the operating result positive next quarter, as management guided.
W2
Absorbing fixed cost: finance ₹85.07 Cr + depreciation ₹94.35 Cr per quarter (~₹180 Cr) means revenue must scale well beyond ₹400 Cr to reach breakeven — track the margin trajectory.
W3
Order-book conversion and BSNL receivable realisation that management flagged on the Q4 call as the route to the promised 'much better' results.
Clean digital PDF, unambiguous headers; unaudited/limited-reviewed. Tax is a deferred-tax BENEFIT of ₹68.57 Cr (all deferred, current tax nil). No exceptional/one-off items on either side (only ordinary-course ₹3.10 Cr inventory-provision reversal and ₹35.11 Cr warranty provision within opex), so adjusted growth ≈ raw. Consolidated and standalone near-identical (subsidiaries immaterial: ₹0.86 Cr revenue, ~nil net). Arithmetic ties on both statements.
Strong R&D momentum masked by severe cash burn and unmet profitability claims
The verdict, the claims that held up, the sharpest analyst exchanges, and the risks — the earnings call, decoded from the transcript.
Hold
confidence 6/10
Grade C
FY26 call promised 'much better results' and 'rapid profitability'; Q1 delivered -₹202 Cr loss. BSNL expansion order still pending.
Cautiously Optimistic
next 1–2 quarters
Optimistic
multi-year
Real but early international 5G traction and credible multi-year roadmap are offset by a ₹202 Cr Q1 loss, worsening receivables (₹2.2B), high debt (₹4.3B), and profitability claims resting on an unconfirmed BSNL expansion order and future AMC revenues 3-4 quarters away. Near-term cash burn is the binding risk.
₹402.2 Cr
Revenue · +99.1% YoY₹-202.2 Cr
Reported PAT · −4.3% YoYCompressing
Margins · vs guidance: OverstatedDid the claims hold up?
Profit after tax improved slightly
OVERSTATEDPAT -₹202 Cr, worsened 4.3% YoY, still deeply negative
Positive trajectory on revenue, PBT, inventory
METRevenue +21% QoQ (verified), PBT -271 Cr (vs -281, marginal 10 Cr improvement), inventory down 80 Cr
First significant 5G international customer wins
METEurope 5G radios, South America end-to-end, NEC partnership confirmed but all early-stage pilots
BSNL receivables will get cleared during quarter as acceptance tests complete
MISSNet receivables jumped ₹327 Cr to ₹2,232 Cr; no clearing evident, opposite of claim
Order book saw small growth
MET₹1,529 Cr vs ₹1,514 Cr (+₹15 Cr, +1% growth)
Earnings quality
What changed since the last call
International 5G wins materialized
UpgradeFirst Europe 5G customer, South America end-to-end deployment, NEC preferred partner announced—moves from 100% domestic to 7% international order book. But all early-stage pilots; sizes unconfirmed.
Profitability recovery delayed
DowngradeFY26 call promised 'much better results' and 'rapid profitability'; Q1 still -₹202 Cr loss. Now claims 12-18 months to EBITDA (vs earlier 'rapid'), pushing recovery to likely H2 FY28.
Receivables become sticky
DowngradeMoved ₹1,905 Cr (Q4) to ₹2,232 Cr (Q1) despite no new large order awarded. Analyst noted non-BSNL segment also showing sticky collections, not just BSNL.
Order book near-flat
Neutral₹1,529 Cr vs ₹1,514 Cr (+1% growth). Domestic wins offset some international; growth minimal despite bullish talk.
The Q&A
Analysts pressed hard on receivables stickiness, profitability bridge, and BSNL-dependent economics. Management held firm on strategy but avoided quantifying BSNL margins ('same as original' but no number), AMC value, or exact path to EBITDA. Tone shifted defensive when confronted with receivable surge; no data given to validate 12-18-month timeline.
BSNL receivables and acceptance tests — Tushar Khurana, Peace Wealth
AnsweredYes, acceptance tests near closure, pending features being delivered. Expect BSNL receivables to clear during quarter as expansion project moves along.
International 5G order details — Tushar Khurana, Peace Wealth
PartialAll for TSPs (mobile network services). Cannot quantify sites due to customer confidentiality; emphasis on reference value and expansion potential.
NEC partnership scope and exclusivity — Tushar Khurana, Peace Wealth
PartialPreferred partner (not exclusive) for 5G radios and beyond. Do not have NEC market size numbers; they have significant business in Japan and Europe.
International payment terms vs BSNL — Jainis Chheda, Kemfin Family Office
AnsweredNo performance linkage; products already proven in extensive POC. Standard 60-90 day payment terms, same as other customers.
Path to profitability — Rajakumar, RK Invest
PartialGrow business, leverage OEM partnerships (NEC), optimize OpEx. First target: positive EBITDA/EBIT, then PAT. Yes, 12-18 months is reasonable.
Receivables increase despite flat order growth — Rajakumar, RK Invest
PartialNon-BSNL also had collections. Increased shipments of this quarter went into receivables, that is the reason.
Warranty provision drivers — Sugandhi Sud, BTH Capital
PartialWarranty due to large BSNL deployment (fault rates, cumulative installed base). Will normalize as field experience matures. BSNL is strategic POC for 5G reference.
Order book composition and BSNL expansion — Sugandhi Sud, BTH Capital
Answered₹1,529 Cr (vs ₹1,514 Cr Q4). 93% domestic, 7% international. Expansion order NOT in backlog yet. Includes service revenue aims and existing POs.
D2M broadcast radio trajectory — Shailesh, InvestYadnya
PartialWaiting for Prasar Bharati tender. Will partner with SI (FreeStream or others). TAM could be ~$1B if nationwide rollout. Only our equipment completed POC trials.
AMC revenue size and timing — Pratap Maliwal, Mount Intra Finance
PartialAMC revenues recognized over 8 years when they start. Haven't shared AMC numbers (will share when materialized). Yes, higher margins, will help profitability in next few quarters.
R&D commercialization timeline — Rajveer Singh, Vivek Investment Managers
PartialContinuous evolution: 4G to 5G (now commercializing with initial wins) to 5G-Advanced/6G to next iteration. Not one-off product; ongoing process.
Competitive edge vs global vendors — Rajveer Singh, Vivek Investment Managers
AnsweredWireless: efficient high-performing radios, integrated BBU. Wireline: strong access (FTTx), state-of-art optical (power/density), DCI Leading Lights finalist. Differentiators built-in.
AI impact on existing Tejas products — Rajveer Singh, Vivek Investment Managers
AnsweredNo; current sales will improve but also need higher-capacity products (access and core) as networks scale for AI-driven traffic.
1.6T DWDM trials and end-to-end solutions — Vijay Sarthy, Subhkam Ventures
Partial1.6T already supported in deployed products (customers test at peak performance). DCI TJ1600-D3 at initial customer engagements, field trials through FY27, deployment end FY27 or early FY28.
6G and AI+DWDM roadmap — Vijay Sarthy, Subhkam Ventures
Answered6G commercial ~2030, product 2029. 256 TR massive MIMO first; spectrum and standards needed. S-band DWDM 2029-30. Roughly 2029-30 for major upgrades.
Edge router and AI accelerator; revenue growth FY27-31 — Vijay Sarthy, Subhkam Ventures
PartialEdge router is routing product (no AI engine), for edge network scalability and AI inferencing infrastructure connectivity (high BW, low latency). Expected consistent revenue growth FY27-30/31 as R&D pays off.
Guidance
No FY27 revenue target (company policy)
N/AManagement stated no quantitative guidance for FY27. Qualitative: expect revenue growth from new wins and BSNL expansion.
Path to positive EBITDA/EBIT in 12-18 months
LowNo quantified bridge. Depends on BSNL expansion, international ramp, cost control, and AMC revenue start (next few quarters). Highly contingent.
AMC revenues will be higher margin (vs equipment sales)
MediumQualitatively confirmed but no specific margin target disclosed. AMC size and start timeline also unquantified.
Continued investments in R&D capex for 5G-Advanced, 6G, and optical portfolio evolution
MediumEmployee costs flat for 'some more time'; capex ongoing but quantum unspecified. Strategic commitment but no capex budget given.
Risks the call surfaced
Working capital and receivables
HighNet receivables jumped ₹327 Cr to ₹2,232 Cr on only ₹402 Cr quarterly revenue (111 DaysOutstanding). Even non-BSNL segments showing sticky collections. Inventory remains ₹2,358 Cr despite supposed unwinding. High leverage and negative earnings make this unsustainable.
BSNL dependency and order uncertainty
HighBSNL 4G expansion (26,000 sites, ~₹1 Lakh) is critical to inventory unwind and receivables recovery. Order is in 'final stages' and expected 'very soon, probably in this quarter' but NOT YET AWARDED. Any delay extends profitability recovery. No guaranteed economics disclosed.
Profitability path unproven
HighManagement claims path to positive EBITDA/EBIT in 12-18 months (end H2 FY28). No quantified bridge provided. Current PAT is -₹202 Cr with -49% NPM. Achieving profitability requires (i) BSNL order award, (ii) margin improvement, (iii) international volume ramp, AND (iv) AMC revenue start (won't begin for several quarters). Any slip extends profitability further.
Inventory obsolescence and write-down risk
MediumInventory at ₹2,358 Cr (down ₹80 Cr QoQ) attributed to advance procurement for BSNL expansion and customer orders. If expansion is delayed/cancelled or if older-gen products (4G radios, earlier optical specs) become obsolete due to 5G/6G acceleration, inventory could face write-downs or forced discount sales.
International wins at early stage
MediumSouth America end-to-end order is 'initial order' post-POC; operators build networks in phases. Europe 5G customer is 'first significant' win but volume unconfirmed. NEC is 'preferred partner' (not exclusive). All are early-stage pilots. International order book only 7% of total (₹107 Cr of ₹1,529 Cr). Volume and margin visibility low.
High debt and finance cost drag
MediumNet debt ₹4,277 Cr, gross borrowings ₹4,866 Cr on a loss-making balance sheet. Finance costs are a drag on path to profitability. Negative cash earnings and high leverage increase refinancing risk if credit markets tighten or if profitability recovery is delayed.
R&D spend at risk if profitability delays
LowCompany investing heavily in R&D (6G, 5G-Advanced, DWDM evolution) while loss-making. If profitability is further delayed, pressure to cut R&D could arise, delaying next-gen product launches (6G 2029, S-band 2029-30). However, management signaled commitment to continue R&D spend and kept employee costs flat.
Management
Score 6/10. Transparent on strategy and product roadmap; evasive on near-term financial specifics. Admitted no FY27 numeric guidance (citing company policy). Provided unquantified profitability timeline (12-18 months) with no detailed bridge. Mixed: delivered on revenue growth (20.9% QoQ, 99% YoY) and international product wins (South America, Europe, NEC). Missed on profitability recovery (PAT still -₹202 Cr) and receivables management (up ₹327 Cr). BSNL expansion order still pending; no visibility on margin improvements.
1 · Q1-Q2 FY27
BSNL 4G expansion order award (26,000 sites) to unwind inventory
2 · Q2-Q3 FY27
Receivables collection as BSNL acceptance tests complete
3 · Q2-Q4 FY27
AMC revenue recognition starts (circle-by-circle, 8-year high-margin contract)
Near-term cash burn is the binding risk.
Revenue double, PAT halved: The profitability promise cracks
Tejas delivered 99% revenue growth year-on-year and landed first international 5G wins. Yet the quarter saw a ₹202 crore loss worsen YoY, receivables explode ₹327 crore, and the path to profitability stretch to 12–18 months with no quantified bridge. The market's day-1 -3.65% selloff was the right read.
₹402.2 Cr
YoY: +99.1%, QoQ: +20.9%
-₹202.2 Cr
YoY: -4.3% (worsened), NPM: -49.2%
₹2,232 Cr
QoQ: +₹327 Cr, 111 DOS
₹1,529 Cr
93% domestic, 7% international
The headline reads like a growth story: Tejas delivered 99% YoY revenue growth to ₹402 crore and closed three flagship international 5G wins (South America end-to-end, Europe Tier-1, and a preferred partnership with NEC for Japan/Europe). Yet beneath the headline lies a deeply unprofitable quarter that contradicts management's profitability narrative. Net profit fell ₹202 crore—worsened 4.3% YoY despite the revenue doubling. More alarming: receivables jumped ₹327 crore to ₹2,232 crore on just ₹402 crore of quarterly revenue (111 days sales outstanding), and even non-BSNL segments show collection stickiness. The market's day-1 reaction of -3.65% was not a surprise reversion; it was an honest verdict on a cash-burn quarter masquerading as growth.
The profitability gap: what management claimed vs. what the quarter delivered
PAT improved slightly
PAT is -₹202 Cr, worsened 4.3% YoY; deeply negative NPM of -49.2%
Overstated
Positive trajectory on revenue, PBT, and inventory
Revenue +21% QoQ confirmed; PBT -₹271 Cr (vs -₹281 Cr, marginal 10 Cr improvement); inventory down ₹80 Cr but remains ₹2,358 Cr
Partially supported
BSNL receivables will clear during the quarter as acceptance tests complete
Net receivables jumped ₹327 Cr to ₹2,232 Cr; no clearing evident. Collections stuck even in non-BSNL segment
Contradicted
First significant 5G international customer wins
Europe 5G radios, South America end-to-end, NEC partnership confirmed. All early-stage pilots; volumes unconfirmed; international order book only 7% of total
Supported (scale unclear)
Order book saw small growth
₹1,529 Cr vs ₹1,514 Cr (+₹15 Cr, +1%)
Technically supported but negligible
The disconnect is stark. Management framed Q1 as a turning point—revenue doubling, international traction, path to profitability. On the call, management claimed PAT 'improved slightly' and emphasized a 'positive trajectory.' The numbers tell a different story. The -₹202 crore loss is worse than last year despite 99% revenue growth. Operating profit margin collapsed to -25.0%. Net margin is -49.2%—meaning the company loses nearly 50 paise on every rupee of revenue. Even the order book, touted as growing, expanded by just ₹15 crore (1%) despite all the bullish international chatter. And receivables—the critical working-capital metric—went backwards, spiking ₹327 crore.
When pressed by analysts on receivables stickiness and the path to profitability, management's tone shifted defensive. The company admitted no FY-2027 quantitative revenue or margin guidance (citing company policy) and sidestepped questions on BSNL margin specifics and AMC revenue size. The profitability timeline was pushed to 12–18 months from now, versus the prior-year call's promise of 'rapid return to profitability.' No bridge was given; no numbers were disclosed.
What changed on this call
International 5G wins materialized—but order book barely moved. Three flagship wins (South America end-to-end deployment, Europe Tier-1 radios, NEC preferred partnership for Japan/Europe) are real and validate the 5G R&D roadmap. However, international order book is only 7% of total (₹107 Cr of ₹1,529 Cr). All are early-stage pilots with no committed volume ramp. Management could not quantify site counts due to 'customer confidentiality.' Expansion depends on customer budgets and performance—real upside, but no certainty.
Profitability recovery delayed by 6–12 months. Prior year's call promised 'much better financial results' and 'rapid profitability.' Q1 FY-2027 delivered a -₹202 crore loss. Management now claims positive EBITDA/EBIT in 12–18 months, then PAT. No quantified bridge given. This pushes break-even profitability to likely H2 FY-2028, a multi-quarter slip.
Receivables became sticky across the customer base. Q4 showed ₹1,905 crore receivables; Q1 jumped to ₹2,232 crore despite no major new order awarded. Analysts noted that even non-BSNL customers are showing collection delays. Management's explanation—'increased shipments went into receivables'—is insufficient; it implies credit or dispute risk beyond BSNL's performance-linked payment terms. Days sales outstanding of 111 is untenable for a loss-making company.
The bull-bear ledger
International 5G/6G roadmap credible; products validated (Leading Lights finalist for DCI, first customers live)
Revenue growth real: +99% YoY, +21% QoQ, driven by BSNL shipments and early international pilots
R&D momentum: 46 patents filed Q1, 722 total (380 granted); strong IP position for 6G (targeted 2029–2030)
Strategic partnerships: NEC (Japan/Europe 5G), global Tier-1 telco R&D, FreeStream (D2M SI) diversify path
Reported PAT is -₹202 Cr (deep loss), worsened 4.3% YoY, with -49.2% net margin
Receivables explosion (₹327 Cr QoQ) signals working-capital crisis; stuck even outside BSNL
Inventory ₹2,358 Cr remains elevated; unwind depends on unawarded BSNL order
Order book grew only 1% (₹15 Cr); 93% still domestic. International traction real but early-stage pilots
Net debt ₹4,277 Cr on a loss-making balance sheet; refinancing risk if profitability slips
Profitability claims rest on three unproven catalysts: BSNL order award (pending), receivables recovery (stuck), AMC revenue (3–4 quarters away)
Risks, ranked by holder concern
BSNL expansion order delayed or downsized
HighOrder is critical to inventory unwind (₹2.4B at risk) and receivables recovery (₹2.2B stuck). Delay pushes profitability recovery into FY-2029. Any scale-back erodes the profitability bridge. Not yet awarded despite being expected 'very soon.'
Working capital exhaustion and refinancing risk
HighReceivables at 111 DOS (₹2.2B), inventory at ₹2.4B, net debt ₹4.3B on a loss-making balance sheet. If collections don't improve, negative cash earnings force equity raise or restructuring. High leverage + negative earnings = refinancing risk.
Profitability recovery timeline slips further (extends beyond H2 FY-2028)
HighCurrent 12–18-month timeline is unquantified and contingent. FY-2026 call promised 'rapid profitability'; Q1 shows the opposite. Each quarter of continued losses erodes credibility and burns cash. Sustained losses force dividend cut or balance sheet restructuring.
International 5G pilots stall or fail to ramp
MediumSouth America end-to-end, Europe, and NEC partnership are all early-stage. No committed volumes. If customers delay budget cycles or performance isn't sustained, international order book stays at 7%. Domestic concentration risk remains.
Inventory obsolescence or forced mark-down
MediumInventory at ₹2.4B (5.9x annualized revenue) is procured for BSNL expansion (pending) and customer orders. If BSNL delays, older 4G radios may obsolete as 5G ramps. Forced discount sales or write-downs compress margins further.
Warranty costs and BSNL margin compression
MediumLarge BSNL deployment is driving elevated warranty provisions and cost drag. Management claims margins will normalize 'as field experience matures'—but no margin guidance given. BSNL economics may be worse than prior order if warranty carries forward.
How the market is positioned
The market's day-1 reaction was -3.65% (with 36.7% delivery), settling to -1.16% by day 3. This is not noise; it is a negative verdict on the earnings delivery and forward outlook. The stock is trading at ₹513 (as of Jul 31), down 20.4% from its all-time high and below both the 20-day and 50-day moving averages, signaling weak technical momentum. RSI of 36.9 suggests downside bias persists.
Institutional flows confirm the negative view. FII ownership has declined 65 basis points QoQ to 5.29%, while DII trimmed 44 basis points to 4.32%. Promoters remain steady at 53.40%, suggesting no insider selling near highs—but FII/DII mutual trimming is a red flag for institutional confidence. The bulk/block deals in recent months show no concentrated insider-linked selling, but trading volumes and spreads suggest weak institutional demand for Tejas shares.
The disconnect between the stock's 20% drawdown from ATH and management's 'rapid profitability' messaging is telling. The market is pricing in execution risk—specifically, that BSNL order delays, working capital stress, or further profitability pushbacks are more likely than the base case. At current valuation, downside from cash burn and missed catalysts outweighs upside from international 5G pilots.
The debate
What to watch next
1 · BSNL 4G expansion order award (Q2 FY-2027)
Expected timing: 'very soon, probably this quarter' (still unconfirmed). Award size: ~₹1 lakh crore, same economics as prior order. Impact: Unlocks ₹80–100+ crore inventory unwind and signals receivables recovery via acceptance tests and warranty expiry. Absence or delay extends cash burn into H2 FY-2027+.
2 · Receivables and collections recovery (Q2–Q3 FY-2027)
Track: Outstanding receivables, days sales outstanding, collection trends in non-BSNL segments. Management claimed BSNL acceptance tests were 'near closure'; watch for actual clearance. If receivables remain sticky (> 100 DOS) into Q3, working-capital crisis risk rises sharply.
3 · AMC revenue recognition start (Q2–Q4 FY-2027)
Management said AMC (8-year, high-margin service contracts) revenues will begin 'in next few quarters' post-site acceptance and warranty expiry. Track quarterly recognition and margin profile—this is the profitability lever. If delayed or margins disappoint, the 12–18-month profitability timeline is at risk.
Tejas Networks delivered a quarter that reads as growth but hides cash burn. Revenue doubling and international 5G wins are real; profitability recovery and working-capital management are not. The market's -3.65% day-1 selloff was the correct read. Hold with a negative near-term bias. Rating: Hold. The binding variable is BSNL order timing and receivables recovery; the number to track is operating cash flow and adjusted EBITDA, not revenue. Until management proves profitability or receivables clear, the equity is a binary bet on three contingent catalysts, all with execution risk.