# 1. Financial Performance ## A. Key Figures * **EBIT:** **-₹232 Cr** (negative) * **PBT:** **-₹297 Cr** (negative) * **PAT:** **-₹194 Cr** (net loss) * **Cash Position:** **₹545 Cr** (end of Q1) · **Borrowings:** **₹3,990 Cr** ## B. Revenue Decline * **Sharp Revenue Drop:** Significant QoQ decline driven by **delays in purchase orders, inventory arrivals, and shipment clearances**, disrupting normal supply chain execution. * **PLI Recognition Timing:** INR122 Cr PLI incentive recognized in Q3 FY'25, not contributing to current quarter performance. ## C. Net Loss & EBIT * **Loss Widens on Fixed Cost Leverage:** EBIT and PAT reflect severe pressure from low revenue base against high fixed costs, despite **improved material margins and lower variable costs**. * **Finance Costs Weigh on PBT:** INR75 Cr in finance costs explain the gap between EBIT and PBT, highlighting elevated carrying costs. * **Payroll Provision Reversals:** QoQ decline in employee costs attributed to **reversals linked to exits and variable pay adjustments**, not structural cost reductions. ## D. Cash Position * **Borrowings Surge for Working Capital & Capex:** Sharp increase in debt tied to operational funding needs and capital investments, despite stable cash balance. ## E. Working Capital * **High Receivables Offset by Advances:** Elevated trade receivables are mitigated by **INR1,460 Cr in advances** under other liabilities, resulting in a more favorable net working capital position. --- # 2. Order Book & Demand ## A. Key Figures * **Order Book:** **₹1,241 Cr** (Q1 FY26, excludes BSNL) * **BSNL Order Value:** **~₹1,500 Cr** (18,000+ sites, not yet in order book) ## B. Current Order Book * **Strong Domestic Backlog:** Order book growth reflects robust wireline demand and selective wireless wins, with **92% of orders from India** underscoring home-market dominance. * **Pipeline Diversification:** Absent another mega-order, growth is now driven by **multiple smaller 4G/5G opportunities** across Indian and global operators. ## C. BSNL 18,000-Site Order * **Near-Term Revenue Catalyst:** BSNL RAN order worth ~₹1,500 Cr formally intimated, with execution expected **within current fiscal year**; TCS APO confirms project launch. * **Execution Clarity:** Despite absence from current book, management expects full award and deployment over **next couple of quarters**, providing visibility. ## D. New Customer Wins * **Expanding Footprint:** New wins in government and private sectors expected to scale this year, including **initial router orders under BharatNet**. * **Win Contextualization:** System integrators’ broader project announcements include non-equipment components, explaining discrepancy with Tejas’ narrower product supply role. ## E. Government & Private Mix * **Geographic Concentration:** Despite halting granular revenue disclosure, order book remains **overwhelmingly domestic**, aligned with national digital infrastructure push. * **Classification Challenge:** Discontinuation of govt/private revenue split due to **blurred customer-end user lines**, particularly in government-mandated private deployments. --- # 3. Product & Segment Performance ## A. Key Figures * **4G Sites Deployed:** **Over 90,000** operational sites with satisfactory performance ## B. 5G & RAN Solutions * **Global Expansion Momentum:** Initiated multiple POCs and engagements with domestic and international operators, signaling growing traction in 4G/5G radio markets. * **Portfolio Depth:** Significant expansion of product portfolio in FY’25 and Q1 FY’26, enhancing addressable market via in-house and **NEC-partnered 5G Massive MIMO radios**, licensed 4G/5G core, and expanded IP/MPLS router family. ## C. Optical & IP Portfolio * **BharatNet Breakthrough:** Secured first order for BharatNet Phase-III through an SI partner for IP routers, with active discussions across additional circles; also supplied GPON equipment for Gujarat’s Last Mile project. * **Tier 1 Backhaul Demand:** Winning run-rate orders from Tier 1 Indian telcos for DWDM equipment to support 4G/5G backhaul capacity expansion. * **Technology Leadership:** Launched **2 terabit per wavelength DWDM solution** at Bharat Telecom, now offering 800G and 2T DWDM systems and 10-gig PON products. ## D. Private 5G Entry * **Strategic Market Entry:** Secured first private 5G order under BSNL’s CNPN initiative for a utility customer, marking entry into industrial-grade private networks despite small initial size. * **Standardized Scalable Model:** Private 5G solutions leverage standard products for industrial, mining, and campus use; operate on operator-leased spectrum as dedicated auctions are pending. ## E. Critical Infrastructure Wins * **Diversified Sector Penetration:** Won tenders in railways, oil & gas, and defense, demonstrating cross-sector demand for secure wireline and optical solutions. * **Defense Engagement Pipeline:** Actively pursuing defense opportunities with ongoing discussions for multiple applications, building on prior supply experience. --- # 4. Strategic Partnerships ## A. Rakuten Open RAN * **Integrated 5G Solution Development:** Partnership with **Rakuten Symphony** advancing integrated Open RAN offerings, combining Tejas’ radio units with Rakuten’s CU/DU stack. * **Global POC Momentum:** Active **4G/5G proof of concepts** underway with private customers globally, leveraging NEC and Rakuten alliances for market entry. * **Established Deployment Footprint:** Rakuten’s existing equipment presence in **Japan and Europe** provides a foundation for joint solution scaling. ## B. Intel & Device Tie-Ups * **Direct-to-Mobile Ecosystem Build:** Collaboration with **Intel, Lava, and HMD** integrates SL-3000 D2M chipsets into laptops and smartphones, enabling commercial device availability. ## C. Global GTM Expansion * **International Order Growth:** Secured network expansion orders from existing customers in **Africa and Europe** for DWDM and GPON solutions. * **Sales Footprint Buildout:** Strategic investments in global partnerships and sales capacity driving momentum in overseas markets. --- # 5. Manufacturing & Supply Chain ## A. Key Figures * **Inventory:** **₹2,537 Cr** (quarter-end) ## B. Inventory Build-Up * **Strategic Stocking:** Inventory buildup reflects proactive procurement ahead of expected order inflows and supply chain contingencies. * **Order-Specific Positioning:** Significant inventory already secured for BSNL 18,000-site order, with potential for further near-term investment. --- # 6. Risks & Execution Factors ## A. Key Figures * **Receivables:** **₹4,500 Cr** primarily from BSNL 4G project * **Expected Credit Loss Allowance:** **₹18 Cr** applied across entire customer base ## B. PO Timing Risk * **Near-Term Revenue Impact:** Q1 shortfall attributed to delayed POs and shipment of ~18,000 BSNL 4G sites originally expected in Q1. * **Railways Tender Delay:** Captive network tender postponed but remains active; company positioned as strong contender upon release. ## C. Milestone Collections * **Collection Progression:** Receivables recovery tied to BSNL project milestones—delivery, installation, commissioning, and rollout—with expectation of meaningful reduction over the next few quarters. * **Near-Term Cash Flow Outlook:** Majority of legacy BSNL receivables anticipated to be collected within current fiscal year, limited spill into next year based on milestone achievement. --- # 7. Guidance & Outlook ## A. Revenue Recovery * **Strong Market Tailwinds:** Growth underpinned by rising data consumption and global investments in fixed/mobile networking, with key demand drivers in AI data centers, 5G rollouts, and digital infrastructure. * **Pipeline Momentum:** New 4G/5G deals expected within the year, supported by advanced discussions with multiple global operators. * **Strategic Investment:** Company remains bullish on long-term growth, actively expanding R&D and go-to-market capabilities to capture evolving opportunities. ## B. Capex Increase * **Elevated Spending Ahead:** Capex set to rise moderately from **INR 650 Cr** last year, driven by R&D, supply chain scaling, and technology collaboration with NEC. * **Cost Expansion:** Employee costs to increase in line with strategic investments in R&D and international sales footprint.