Tejas Networks: Brokers Initiate Coverage, Share Prices Rise

Tejas Networks: Brokers Initiate Coverage, Share Prices Rise

VoM News Desk | December 27, 2023 | 12:17 PM IST | Breaking News | Follow on Google News

Tejas Networks: Brokers Initiate Coverage, Share Prices Rise/

Tejas Networks: Brokers Initiate Coverage, Share Prices Rise

Tejas Networks observed a surge of over 3% in its share price following Emkay Global Financial Services’ initiation of coverage on the stock. Tejas Networks’ shares climbed by 3.78% to ₹887.95 on the BSE.

Emkay Global, initiating coverage on Tejas Networks, recommended a ‘Buy’ rating with a target price of ₹1,050 per share based on the discounted cash flow (DCF) method, suggesting a 14.3x Price-to-Earnings ratio (Dec-24E). Being India’s largest R&D-focused telecom equipment firm, Tejas Networks specializes in designing and producing wireline/wireless networking products.

“The company is poised to benefit from the Indian government’s focus on domestic manufacturing, PLI schemes, substantial investments in BSNL, BharatNet, and Railway projects, alongside increased demand from critical infrastructure projects and the Indian private sector. Additionally, the global shift to replace Chinese telecom equipment is a notable advantage,” stated Emkay Global in its report.

As of Q2FY24, Tejas Networks holds an order book of ₹9,270 crore, and Emkay Global anticipates the acquisition of further purchase orders (POs) within the next two years. It forecasts Tejas Networks executing orders worth a minimum of ₹29,200 crore during FY24-28E, projecting revenues and EBITDA exceeding ₹30,000 crore and ₹6,000 crore, respectively, driven by BSNL and BharatNet projects.

The brokerage foresees revenues peaking at approximately ₹10,000 crore in FY25E, maintaining elevated levels nearly five times higher than FY24.

Emkay Global anticipates Tejas Networks reaping the benefits of cost-competitive R&D, an asset-light model with EMS partners, the acquisition of Saankhya Labs for wireless solutions, CEO Anand Athrey’s extensive 35 years of US-based work experience, and potential opportunities arising from Tata Group’s semiconductor ventures.

While Tejas Networks shares have gained around 7% in the last month and soared by 51% YTD, the stock’s multibagger returns exceed 571% over the past three years. At 12:05 pm, Tejas Networks shares were trading 1.85% higher at ₹871.40 on the BSE.

VoM News Desk

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