Tejas Network shares rally 40% in 2 days; should you buy, sell or hold this stock?

Tejas Network shares rally 40% in 2 days; should you buy, sell or hold this stock?

Tejas Network share price today: Shares of Tejas Network Ltd rallied 20 per cent on Monday to take their winning run to 40 per cent in two trading sessions, thanks to a strong set of quarterly results. Analysts said Tejas Networks Q4 results were a beat on revenue and margin estimates, led by BSNL’s 4G project execution.

Emkay Global said it sees Tejas Network to benefit from the government’s emphasis on domestic manufacturing and the PLI scheme and large spends on BSNL, BharatNet, and the railways. It is also likely to gain from a global move towards replacing Chinese telecom equipment and references from TCom and TCS, thus adding new clients;

This brokerage expects Tejas Network’s FY25E revenue to be 4 times FY24 revenue on BSNL and Bharatnet execution.

“We increase revenue by 6 per cent/7 per cent for FY25E/FY26E on account of the beat on our revenue estimate. We also raise our EBITDA margin by 150-10 bps on the margin beat. We revise our target price to Rs 1,100 per share against  Rs 975 earlier, based on DCF methodology. We retain our Buy rating,” it said.

Tejas Networks turned profitable in Q4, as it reported a profit of Rs 147 crore for the quarter against a loss of Rs 11.5 crore in the corresponding quarter last year. Revenue for this company jumped multi-fold to Rs 1,326.90 crore against Rs 299.30 crore YoY. Its order book stood at Rs 8,221 crore. The company said it has ramped up BSNL’s 4G/5G RAN shipments and delivered large volume of IP/MPLS routers for the backhaul network. The company was granted 22 patents in Q4.

Arihant Capital Markets said Tejas Network performed well, with growth coming in from across product segments, including wireless and wireline businesses.

“With an order book worth Rs 8,200 crore, the company is well-positioned to capitalise on upcoming opportunities such as BSNL’s 4G/5G rollout, Bharat Net Phase 3, private telco broadband expansions, and utility network upgrades in India and around the globe. Going forward the company’s long term goal is to maintain historical margins level over time,” the brokerage said.

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