Tejas Networks Limited Q1 FY27 Earnings Call Summary

Event Participants

Executives

5
Arnab Roy (MD & CEO), AVS Prasad (CFO), Dr. Kumar N. Sivarajan (CTO), Pritam (COO), Sanjay Malik (Chief Strategy & Business Officer)

Analysts

8
Janice Chayda (Kempen Family Office), Pratap Maliwal (Mount Indra Finance), Raja Kumar (RK Investment), Rajvir Singh (Vivek Investment Managers), Shailesh (InvestYadnya), Sugandhi (Individual Investor), Tushar Khurana (Peace Wealth), Vijay (Shubham Ventures)

Financials & KPIs

Geographic & Segment Commentary

India: Contributed ~50% of Q1 revenue and 93% of closing order book. Expanded FTTx footprint with a tier 1 telco for pan-India residential broadband; supplied 100G/400G DWDM equipment to two other tier 1 operators for 5G backhaul, enterprise services, and hyperscaler data center connectivity. Won communication network modernization contract from a large power utility (TDM→IP migration). BSNL 4G expansion order (26,000 additional sites) in final award stage, expected to conclude in Q2 FY27.

International: Contributed ~50% of Q1 revenue but only 7% of order book. Shipped 5G Massive MIMO radios to a European customer under the NEC partnership; won first commercial end-to-end 5G network deployment (radios + baseband + core) in South America; selected by a global tier 1 telco for a joint 5G R&D project expected to lead to future product shipments. Sold additional 100G/400G coherent DWDM equipment to an existing African wholesale bandwidth provider for network expansion.

Wireless: International traction accelerating via NEC preferred-partner arrangement (radios for NEC's vRAN-based 5G solutions). BSNL 4G network performance serves as key reference for product scalability and reliability in customer conversations.

Wireline: Steady growth driven by data center connectivity, enterprise bandwidth upgrades, residential broadband (FTTx), and utility network modernization; strong incumbency in Indian private telcos with expanding market share.

Company-Specific & Strategic Commentary

NEC Partnership: Tejas positioned as NEC's preferred partner for 5G radios (current and future generations, plus some 4G), with Tejas handling radio development and manufacturing while NEC focuses on vRAN/software. Targeting NEC's significant Japan and Europe markets; partnership extends beyond radios into deep co-development.

D2M Broadcast Solution: Completed extensive field trials with Prasar Bharati and FreeStream; management states Tejas is uniquely positioned as the only vendor with proven D2M equipment post-POC. Revenue path depends on Prasar Bharati tender issuance and SI partnership selection; nationwide rollout TAM estimated at close to ₹1 billion.

AI-Driven Portfolio Evolution: CTO outlined AI's 20x traffic impact driving data center interconnect and edge inferencing network build-out. Product roadmap includes: 50G PON (from 10G), 800G business access, 1.2T/1.6T core wavelengths, and C+L+S WDM bands (S-band expected within 2-3 years). TJ1600-D3 data center interconnect product named global top-3 finalist at Leading Lights Awards 2026, endorsing R&D capability.

R&D & Innovation Ecosystem: Filed 46 patents in Q1 (722 cumulative, 380 granted); signed MOUs with IIT Gandhinagar and MahaIT for next-generation telecom innovation; won Bangalore Chamber of Industry and Commerce manufacturing excellence award.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

BSNL Expansion Order & Receivables

• Question: With the 26,000-site expansion order in final stages, should BSNL receivables improve given pending acceptance tests? (Tushar Khurana, Peace Wealth)
• Answer: Yes — acceptance tests and pending feature completions are at an advanced stage and coming to closure; expect substantial BSNL receivables clearance during Q2 FY27 as the expansion project moves forward. (Arnab Roy)
• Question: Is the TCS news about the BSNL expansion the same order Tejas is referencing? (Shailesh, InvestYadnya)
• Answer: Yes, it is the same expansion order for the 26,000 additional sites; final T&Cs are being discussed with SI partners. (Arnab Roy)

NEC Partnership Structure

• Question: Given NEC's 5G RAN restructuring, is Tejas the exclusive partner for NEC's radio needs going forward? (Tushar Khurana, Peace Wealth)
• Answer: Tejas is NEC's "preferred partner" for 5G radios (current, future, and some 4G), with Tejas handling development and manufacturing while NEC focuses on vRAN software. NEC has significant business in Japan and Europe; management could not quantify NEC's total RAN market size. (Arnab Roy)

International Order Terms

• Question: Do international orders carry performance-linked payment conditions like BSNL? (Janice Chayda, Kempen Family Office)
• Answer: No — international orders came after extensive POCs proving the products; no performance-linked payments. Standard payment cycles of 60-90 days apply. (Arnab Roy)

Path to Profitability & Working Capital

• Question: What is the path and timeline to profitability, and why did receivables rise ₹325 crores despite only ₹402 crores of revenue? (Raja Kumar, RK Investment)
• Answer: Path includes revenue growth, OEM partnerships (NEC), OpEx optimization, cost engineering, and working capital reduction as BSNL inventory/receivables normalize — 12-18 months is a reasonable timeline for positive EBITDA/EBIT, then PAT. Receivables rose because increased Q1 shipments converted to receivables; collections were offset by higher shipment volumes. (Arnab Roy)

Warranty Provisions & AMC Revenue

• Question: What drives the elevated warranty provisions, and what is the AMC revenue outlook? (Sugandhi, Individual Investor; Pratap Maliwal, Mount Indra Finance)
• Answer: Warranty provisions are driven by cumulative installed base and expected fault rates — elevated due to the large BSNL rollout and will normalize as field experience matures. BSNL add-on order economics are in line with the original contract. AMC revenue has not started yet; it begins after site acceptance and warranty periods lapse (next few quarters), is recognized over 8 years, comes as circle-by-circle multi-year POs, and carries materially higher margins. (Arnab Roy)

D2M Opportunity

• Question: What is the revenue path for D2M after the field trials? (Shailesh, InvestYadnya)
• Answer: Awaiting the Prasar Bharati tender; Tejas will partner with an SI participant (e.g., FreeStream). Tejas is uniquely positioned as the only vendor with D2M equipment proven via POC trials. Nationwide rollout TAM estimated at close to ₹1 billion; site count will be lower than the BSNL network. (Pritam, COO; Arnab Roy)

R&D Commercialization & Competitive Positioning

• Question: Which R&D investments are closest to commercialization, and where does Tejas hold a technological edge over Nokia/Ericsson/Huawei? (Rajvir Singh, Vivek Investment Managers)
• Answer: R&D is a continuous evolution — 5G investments over the last 24 months are now beginning commercialization, while 5G-Advanced/6G investments have started. Competitive edge: high-performance, efficient macro radios proven on the BSNL network; integrated BBU with transport; converged access portfolio (FTTx + enterprise + low-latency services in one product); and state-of-the-art optical products in power, density, and capacity (DCI product finalist at Leading Lights). (Arnab Roy)

AI Demand & Technology Roadmap

• Question: Will existing products benefit from accelerating AI infrastructure spend without additional R&D investment? (Rajvir Singh, Vivek Investment Managers)
• Answer: Yes — AI-driven bandwidth growth (20x traffic increase per CTO) benefits current optical/access product sales, but higher-capacity products are also needed. Investments will shift from central data centers to edge and last-mile access as AI adoption mainstreams, which is where 50G PON and 5G-Advanced/6G products come into play. (Arnab Roy)
• Question: When will 6G, 256T/256R Massive MIMO, and C+L+S band WDM become reality? (Vijay, Shubham Ventures)
• Answer: 6G product launch is expected in 2029 with commercialization around 2030, dependent on 3GPP standards finalization and 7 GHz spectrum allocation; technology demonstrations start next year. Current WDM products already support up to 1.6T per channel (deployed at 400G/800G as per network needs); S-band addition expected in 2-3 years as capacity crunch intensifies with 6G-era traffic. (Dr. Kumar N. Sivarajan)

Revenue Growth Consistency FY27-FY31

• Question: Should investors expect consistent progressive revenue growth from FY27 through FY31? (Vijay, Shubham Ventures)
• Answer: Yes — given R&D investments and product relevance to AI, 5G emerging markets, and wireline expansion, management expects consistent business growth and profitable growth over the coming years. (Arnab Roy)

Key Takeaway

Tejas Networks delivered Q1 FY27 revenue of ₹402 crores (+20% QoQ), evenly split between India and international, with the order book rising 16% to ₹1,529 crores (93% domestic). The PBT loss narrowed to -₹271 crores. Strategic momentum centered on international 5G: first 5G Massive MIMO radio shipments to a European customer under the NEC preferred-partner arrangement, a first commercial end-to-end 5G network win in South America, and a joint R&D project with a global tier 1 telco. The BSNL 26,000-site expansion order, expected imminently in Q2 FY27, is positioned to unlock working capital by clearing inventory (₹2,358 crores) and receivables (₹2,232 crores). Management targets positive EBITDA/EBIT within 12-18 months, supported by higher-margin AMC revenues (8-year recognition), flat employee costs, and international growth. Key watch items include net debt of ₹4,277 crores, warranty provision normalization, and D2M tender timing.