Shares of Tejas Networks witnessed a sharp fall on Monday, April 28, 2025, after the company announced a net loss of ₹71.8 crore for the March quarter (Q4FY25), reversing from a profitable position a year ago. The poor bottom-line performance, despite a strong revenue surge, rattled investor sentiment and triggered heavy selling pressure on the counter.
Tejas Networks Share Price Movement: A Steep Drop
Tejas Networks’ stock tumbled 10.37% to ₹769.90 apiece on the National Stock Exchange (NSE) by 9:51 AM, reflecting the market’s disappointment over its quarterly results.
The steep intraday fall also erased a large chunk of the gains the stock had accumulated over the past few months, as expectations around new projects, particularly in 5G and optical networking segments, had kept investor optimism high.
Tejas Networks Q4FY25 Results: Net Loss Despite Revenue Growth
In a regulatory filing, Tejas Networks reported a consolidated net loss of ₹71.8 crore for the March 2025 quarter. This compares sharply with the net profit of ₹146.78 crore in the corresponding quarter of the previous financial year.
However, the company’s revenue from operations grew 42.4% year-on-year (YoY) to ₹1,906.98 crore in Q4FY25, up from ₹1,339.17 crore a year ago.
This shows that while top-line growth remains robust, higher expenses — especially related to research and development (R&D) — and inventory adjustments took a heavy toll on profitability.
Key Highlights of Q4FY25 Results:
- Revenue: ₹1,906.98 crore (+42.4% YoY)
- Net Loss: ₹71.8 crore vs Net Profit of ₹146.78 crore YoY
- Order Book: ₹1,019 crore
- Dividend: ₹2.5 per share recommended
Management Commentary: Focus Remains on Strategic Growth
Anand Athreya, Managing Director and Chief Executive Officer of Tejas Networks, provided important context around the performance.
“In Q4-FY25, we completed deliveries of over 100,000 sites for the BSNL 4G/5G network, making it one of the largest single-vendor RAN (Radio Access Network) deployments globally, delivered in record time,” he stated.
Athreya emphasized that the company achieved key wins across its optical, PTN (Packet Transport Network), and FTTx (Fiber to the X) product lines. These wins were largely in areas such as mobile backhaul, broadband services, and power utility networks.
Further strengthening its technological capabilities, Tejas Networks also entered into a technology collaboration agreement with NEC Corporation. This agreement is aimed at jointly developing and marketing advanced RAN technologies, positioning Tejas at the forefront of 5G innovations.
Financial Insights: R&D Expenses, Inventory Adjustments Drag Profits
Sumit Dhingra, Chief Financial Officer of Tejas Networks, shed more light on the bottom-line pressures.
He attributed the net loss primarily to:
- Increased investments in R&D, aimed at building next-generation products.
- One-time changes in inventory valuation, which impacted the quarter’s profitability.
Despite the Q4 setback, Dhingra pointed out that FY25 was a strong year overall for the company:
- Annual Revenue: ₹8,923 crore
- Annual Net Profit: ₹447 crore
This represents significant growth over FY24, indicating that while Q4 was challenging, the broader business trajectory remains positive.
“We ended FY25 on a high note in terms of revenue growth and a healthy order book,” Dhingra affirmed.
Dividend Announcement: Rs 2.5 Per Share
In a move that might offer some solace to shareholders, Tejas Networks’ board recommended a dividend of ₹2.5 per share for FY25. The dividend is subject to shareholder approval at the company’s upcoming Annual General Meeting (AGM) scheduled for June 27, 2025.
A steady dividend payout even during a challenging quarter reflects the company’s confidence in its future cash flows and its commitment to rewarding shareholders.
Stock Grant Update: RSUs to Key Management
Further aligning leadership interests with shareholders, the board approved the grant of 1,28,700 Restricted Stock Units (RSUs) to key management personnel under the Tejas Restricted Stock Unit Plans.
This move signals Tejas’ focus on retaining and incentivizing top talent as it embarks on its next phase of growth, especially in high-demand areas like 5G, optical networking, and global markets.
Market Reaction: Why Did Investors Panic?
While revenue growth was robust and operational wins were significant, the market’s sharp negative reaction was driven by:
- Negative surprise in profitability: Analysts had expected a modest profit or breakeven, not a substantial loss.
- Concerns over rising costs: Increased R&D and inventory-related expenses led to fears about margin pressures persisting into FY26.
- Cautious outlook amid global headwinds: With increasing competition in the networking equipment space and macroeconomic uncertainties, investors remain wary.
According to a senior market analyst at a Mumbai-based brokerage, “Investors are spooked not just by the loss but also by the sharp rise in expenses. While strategic investments are good for long-term growth, markets prefer a more gradual approach.”
Long-Term Outlook: Strategic Bets May Pay Off
Despite the disappointment in the latest quarter, the long-term outlook for Tejas Networks remains positive:
- Strong position in domestic telecom projects: Deliveries to BSNL and partnerships with major global companies like NEC position Tejas well for future 5G expansions.
- Expanding international presence: Joint go-to-market initiatives with NEC can open up large international opportunities.
- Continued product innovation: Heavy investments in R&D, though costly now, are expected to drive future revenue streams in cutting-edge technologies.
As India pushes ahead with its Digital India and 5G expansion goals, companies like Tejas Networks are likely to play a pivotal role. Investors willing to look beyond short-term volatility could still find value in the stock over a longer horizon.
Conclusion: Tejas Networks Faces a Bump, But the Road Ahead Remains Promising
Tejas Networks’ Q4FY25 results highlight the typical growing pains faced by technology companies making strategic investments for future growth. While the ₹71.8 crore net loss disappointed the market and led to a steep sell-off, strong revenue momentum, an impressive order book, and promising strategic initiatives suggest that the underlying business fundamentals remain strong.
Investors need to monitor how quickly Tejas can translate its R&D spending into profitable revenue streams while maintaining financial discipline. The dividend announcement and leadership stock grants reflect management’s confidence in the company’s medium-to-long-term prospects.
As the dust settles from the Q4 shock, long-term investors may find opportunities in Tejas Networks if the company continues to execute its strategic roadmap successfully.
Read more news on niftynews
