Tejas Networks shares hit a 26‑month low near ₹627, plunging ~10% on Q1 FY26 results: net loss of ₹194 Cr vs ₹77 Cr profit YoY, and revenue decline of 87% to ₹202 Cr. Here’s what investors need to know—including order book, partnerships, and risks.
📉 Q1 FY26 Snapshot
- Net Loss: ₹194 Cr compared to ₹77 Cr profit in Q1 FY25—a drastic reversal
- Revenue: Declined 87% to ₹202 Cr from ₹1,563 Cr YoY
- EBITDA Loss: ₹136 Cr vs ₹230 Cr YoY
- Order Book: ₹1,241 Cr (22% QoQ growth), with new orders for BharatNet Phase‑3 and partnerships (Rakuten Symphony, Intel)
Investor Reaction:
Shares plunged ~10%, reaching a new 52-week (26-month) low of ₹627.45, wiping out 45–54% of its YTD/12-month value .
🧭 Reasons Behind the Slump
- Severe Revenue Drop – Supply-chain delays (POs, shipments) hit revenues hard mint+1Upstox – Online Stock and Share Trading+1.
- Profitability Gone – Transitioned from profit to deep losses due to mismatch between high fixed costs and low sales volume.
- Weak Market Sentiment – Falling below ₹628 triggered technical panic—volume surged, RSI hit oversold levels .
- Tata Affiliation Not Enough – Parent Tata Sons backing provides comfort, but results overshadow this support .
📊 Stock Analysis
- Current Levels: ₹628–655; down from ₹1,468 peak (June 2024)—a 56% collapse .
- Valuation Data:
- P/E: ~66×, rich vs sector average ~12× Screener+1Moneycontrol+1
- P/B: ~3.2×; Book Value ~₹218/share TradingView.
- Key Support: ₹600–630 (recent price floor)
- Resistance: ₹800–850 (50-day SMA region)
- Volume Signal: High turnover; may indicate capitulation and possible bottoming Groww+3NDTV Profit+3Moneycontrol+3.
Should You Invest?
🚨 For Short-Term Traders:
- Watch ₹600–630. A bounce from here could lead to a rally toward ₹800 if broader sentiment improves.
- But caution: tech and infra sectors may remain under pressure until order flows normalize.
📈 For Long-Term Investors:
- Pros: Strong order book, strategic partnerships, backing by Tata—potential for recovery once POs resume.
- Cons: Earnings volatility, high valuation vs profits, supply-chain blameable pattern.
- Outlook: Wait for signs of revenue restart (e.g., order fulfillment on BharatNet, PLI receipts) before averaging down.
What to Monitor
| Catalyst | What to Watch |
|---|---|
| Purchase Orders | New POs from BSNL/TCS, Rakuten, Intel-related deal execution |
| Revenue Recovery | Q2 growth vs Q1’s ₹202 Cr baseline |
| Cost Control | EBITDA trend vs cost reductions |
| Stock Support | If ₹600–630 holds, it may stabilize; a drop below ₹550 is bearish |
❓ FAQs – Tejas Networks
Q1. Why such a sharp revenue drop?
A: Q1 saw delayed POs and shipment clearances, causing revenue to drop 87% YoY from ₹1,563 Cr to ₹202 Cr.
Q2. Is Tata backing relevant here?
A: Yes, it provides financial stability, but execution issues hurt near-term results.
Q3. Will profits return soon?
A: With a ₹1,241 Cr order book and new gigs, Q2–Q3 may see recovery, but profitability hinges on volume and margins.
Q4. Should I buy at current price?
A: For conservative investors, wait for clear revenue uptick and margins. Traders may buy dips around ₹600 with tight stops.
Q5. How risky is valuation now?
A: P/E ~66× is steep amid losses; valuation is justified only if recovery is strong and sustainable.
⚠️ Disclaimer
This content is for informational purposes only and does not constitute financial advice. Stock markets involve risk—consult a SEBI-registered advisor before deciding.
🏁 Final Take
Tejas Networks has hit a rough patch—steep revenue fall, heavy losses, and a stock down over 50% from peak. However, its strong order book, government/international contracts, and Tata backing offer a rebound path. A near-term bounce could come off ₹600–630, but for longer-term hold, look for revenue normalization and earnings improvement first.
